So, your boss has come to you (well, actually they sent an email), with this crazy idea that you need to set up Key Performance Indicators (KPIs) and SMART goals. Is this a passing trend and do you need to act upon it? After a quick internet search, you get the general idea, but the thought of sitting down and writing these out seems a little bit like too much hassle.
Don’t worry, we’re here for you
1 – What’s the big idea.
Actually, it’s a good one. Up until now, either your work has not been measured at all, it has been measured in a subjective manner or your measurement only comes in a negative way (i.e. you get reprimanded/complained-to if something is not done).
Good news, KPI’s are going to help. Oh, and in addition, do you ever get your boss coming to you and complaining in a subjective manner (it’s not what I had in mind… I ‘like’ it this way…) and does that conversation occasionally last a long time, when frankly you could be getting on with more work or doing something else far more productive (even if that involves Facebook)? Well KPIs help with this too.
So, KPI’s are a way of putting at a high level, what you think the top 4 or 5 achievements should be for yourself over the next (normally) quarter. By writing this out – each KPI as one sentence - you are indicating what is important, and your boss can then either agree or not, but once agreed to, both of you should be in agreement as to what is happening in the next quarter/time period.
2 – So, how do you work out what your KPIs should be?
These shouldn’t be plucked from thin air. In fact, you probably have access to a number of documents that can help you. See if you can get your hands on:
- Your job description
- The previous job reviews your boss has given you
- Vision, objectives or goals of your company or department
- Sales goals
- Important emails that your boss sent out about strategy or big projects
A typical KPI could be along the lines of:
- Delivering market-leading consulting services
- Ensuring we have the best team in the industry
- Addressing flaws in our delivery across North American operations
- Making sure we send out invoices and collect payments in a timely manner
3 – Now make them SMART
Next up we need to rationalize your KPIs. I am sure the KPI’s you came up with are awesome at the high level, but now we need to make these ‘real’. How are we going to measure success?
Each KPI needs one or a number of SMART goals.
What is a SMART goal?
SMART is an acronym for specific, measurable, attainable, relevant and time based. It is true that not all are in universal agreement, but if the letters stand for something else, it is generally with the same definition.
- Specific – target a specific area for improvement.
- Measurable – quantify or at least suggest an indicator of progress.
- Attainable/Assignable – is it really possible, and who’s doing this.
- Relevant/Realistic – is it relevant for the business and what results can realistically be achieved, given available resources.
- Time-based – specify when the result(s) can be achieved.
Let’s take an example. From our KPI above, “Making sure we send out invoices and collect payments in a timely manner” we need to set at least two SMART goals – one for invoices and one for the collection of payments. Let’s take the first one – invoicing in a timely manner
- Specific – Invoices
- Measurable – send out within 24-hours of order being fulfilled, in 98% of the cases over an average week.
- Attainable/Assignable – Brenda’s doing this, and as right now 70% of invoices are already sent out within 24-hours, so this does seem possible
- Relevant/Realistic – this is relevant for the business, as debtors pay invoices quicker if they receive the invoice closer to the order fulfillment, so if we achieve this realistic goal, we are making a sizable difference to the business
- Time-based – we’ll achieve this measurable goal by the end of this quarter
In summary, if your goal can be measured and you can define a timeline to hitting a desirable measure, then you’re getting the hang of this.
4 – Get them approved
Now you have SMART goals that represent your KPIs. You should show them to your manager, who needs to agree on them. They will be looking for three things:
- are the priorities of your job role addressed by the KPIs
- are they meaningful to the organization (will you be making a difference)
- are they SMART (now you’re an expert in this, it should be a breeze)
5 – Get on and do the work
Once you have agreed your KPIs and SMART goals with your manager, the easy stuff happens. You get on and do your job for the quarter.
You can expect that your manager (if they are any good) will be coming to you during the quarter to see how you’re doing. When they do, then reiterate your SMART goals, reaffirm if they are still achievable (according to the metrics and timeline), and if there is any doubt, speak to your manager about what they can do to help you hit the goal.
These can now be objective discussions. If you are halfway through the time period, and you are half way to your desired goal, then (all things being linear) you’re in a good place.
6 – What happens at the quarter end?
Firstly, you report back to your manager with the results for each SMART goal. If the goal was realistic, you are good at your job, and nothing unforeseen occurred, then the goal should be met and your manager should be very happy (as should you be). If the goal was not met, then you can expect to discuss this to work out where improvements can be made.
At this time, you’ll be also submitting your next goals. Some may be repeated, and some may be new – that all depends on your job role and responsibilities.
What we love about KPI’s and SMART goals is that they are simple, they are relevant for all organizations, are applicable for all level of workers, and they really do work to keep team members happier.