Wondering what is a KPI? Well, tune into this video because I'm going to share with you
what is a KPI, the characteristics of a really good KPI and some KPI examples. And if you
stick around to the end of this video, I'm going to share with you how you can get your
free guide on why projects fail, so you can ensure that your project KPIs are on track.
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is coming to you every Wednesday. Now, if you're excited as I am about KPIs, let's get to it.
What is a KPI? A KPI is an acronym for Key Performance Indicators. Now it's not a goal,
but it's a measurement of how you achieve your goal. We use them in business all the time to make
sure that we're on track with our objectives. And we want to know if we are going to be successful
or reaching our targets of what we were hoping to achieve. So some examples of business KPIs
could be net sales versus forecast. Could be your inventory turnover rate. How many
emails were opened in a program that you sent out? How many clients did you just sign up last month?
So it's the key things that you want to measure. Now when it comes to projects, what are some
project KPIs? Well, let's take a look at schedule. Are you on track in regards to your milestones?
How many milestones did you achieve versus how many did you not achieve? as well as what about
labor costs? Are you on track with all of that labor that you're using in for your project?
Resource allocation is another one too. You may have predicted what you thought the resource
was going to be and are you on track with it? Are you over or under? Are you calling on more
people than you expected? That all has impact and it really allows you to know whether or not
you're on track with your original goals and if you're successful towards achieving them as well.
Now that you know what a KPI is, it's time to know what makes them effective. And I'm going to go
through four specific things that you need to be aware of. Make it simple. A KPI should be simple,
straight forward, easy to measure. You should be very clear with what the KPI is and what
you're trying to achieve. It should not leave any room for questions whatsoever. Make it realistic.
A lot of times individuals or organizations will create KPIs and they're not realistic.
There are these overarching high level values and numbers that there's no way people can achieve.
So take a step back. Can we achieve this? Is it a really, am I pushing it out enough where it's
going to be motivating people? And so therefore we can get to it or am I really stretching it
so much that we're never going to achieve it? This is a little bit of a fine line. You need
to figure out with what you're trying to measure if it's realistic. So just always keep in the back
of your mind because the last thing you want to do with a KPI is have this great KPI, but it's
so out there that there's no way that people can realistically get to it. And It promised you,
it deflates people and you're going to have the opposite effect of not people trying to motivate
themselves to get to the KPI. They're actually going to be trying to get away from the KPI.
Make it measurable. Now you need a KPI and you need to make sure you can actually measure it. So
if you're like, "We want great customer satisfaction." Well, how are you going
to measure that customer satisfaction? Is it in a survey? Is it through people
giving you positive feedback on some sort of social media site? You have to figure it out
and be very specific that you can measure it. Just hoping that, "Oh, our sales tells us that people
are satisfied," is not necessarily the right measurement. So you have to really take a look, is
your measurement aligned with what you're trying to achieve? And so therefore the KPI makes, sense.
Last but not least, make it visible. There is no point having KPIs if your organization has no idea
what they are and what they're working towards. So plaster it in very specific places that people
can see so they can get excited. If you have a warehouse KPI in regards to let's say, safety or
getting your orders out right the first time, well then place it in the warehouse where people see it
and they can get excited about it. So really think clearly about making it visible. Now,
a side note to visibility, please, when you make it visible, don't have 50 KPIs because even though
you've plastered them and they're all simple and measurable and all that fun stuff and realistic,
if you have too many, people then don't know what they're actually trying to achieve because
there's too many directions for them to go into. So make a visible, but keep it
simple and stick with the ones that are really going to help you in your business objectives.
Now that you know what a KPI is, you really now have to understand
for your projects that have KPIs, how do you ensure that you don't have other things that
come into play that are going to make them fail or worse yet, not achieve a KPI. So for you,
I have this, all of the things you need to be aware of on how to ensure your projects don't fail
in this guide. I want you to go to the link below, under this YouTube, and grab it. It's yours free.
Don't forget to subscribe to the channel, like this video and please share it with everyone that
you know. It really helps us out. On that note, if you have KPIs that you've used in the past,
or if you want to throw a KPI at me and see if it's realistic and simple and all those fun little
things, by all means do so. I'd love to hear from you. Until the next video, have a great day.