KPIs (Key Performance Indicators) and KPI trees were at the root of Wednesday’s Masterclass, hosted by Richard Stobart.
A blend of senior digital stakeholders, product owners and digital creatives attended this one-off session to explore the answers to burning questions:
- What is the methodology for creating new ‘greenfield’ Key Performance Indicator improvements?
- How do you step up a level to the strategic product view?
- What drives your metrics?
- How do you use ‘smart KPI branching’ to discover how users really behave?
Introduction - Get into pairs and draw ‘how does electricity work?’
To get the attendees’ in creative thinking mode and talking to one another, the morning began with an introduction exercise, mapping out a diagram of how attendees think electricity works.
Armed with a partner, a large piece of paper, a Sharpie marker each and some 'interesting’ concepts around electricity generation, the creative sparks began to fly:
And the finished posters were shared on the walls:
Session 1: Introducing KPIs
Richard kicked off the morning’s first session - defining what a KPI is and how they can benefit your organisation:
The topic then branched into KPI trees:
What is a KPI tree?
‘A KPI Tree is a graphical method of managing KPIs.’
An example KPI tree was shared:
- Strategic Goal: What you’re aiming to achieve
- Theme: Dimensions of all the elements that you’re going to be measuring
- Tactic: How you will achieve these themes; the small steps you’re going to take
- Measure: How you’ll measure these tactics
Why should you build a KPI tree for your organisation?:
- 'Management’ or 'the business’ speaks the language of KPIs, PIs and measurable/auditable value
- 'Development’ or 'innovation’ speaks the language of delivering digital features, managing teams and technology
- Building KPI trees helps 'Management’ build a structured method by which to speak to 'Development’
- Having a KPI tree helps development and innovation make development decisions make a significant difference on strategic PIs and KPIs
- They are simple visual tools which can sum up large strategic initiatives in a few key indicator
What are the benefits of KPI trees?:
- Sum up a complex situation
- Help build agreement
- Easy to explain the approach
- Keep in step with changes in strategy
- Understand how measures interact
Pre-requisites for setting your KPIs:
- Have a clear strategy and objectives
- Make sure you have a pre-defined process for implementing this system
- Set clear business objectives for the process
- Have both quantitative and qualitative measurements
- Have an active approach to finding and remedying enterprise variances
- Start at the top, have a business objective or strategy you’re trying to achieve then have a set of measures around that to help you achieve
- The KPI is not the “thing”, it’s just an indication of what the “thing” might be
- If you’re a slave to the metric, you could be watching the wrong thing
“There’s a huge volume of data and a tiny of proportion is valuable to you. You can spend a lot of time gathering a lot of data, but it’s probably not the most valuable thing you could be doing.”
When building your KPI tree, think about your themes:
- Themes are dimensions of all the elements that you’re going to start measuring
- Think about the things you’re going to measure and group them into themes
- From themes come your measures, which are your KPIs
Session 2: Test and create your plan
- What should you be measuring that you’re not measuring?
- How are you sure that you’re moving towards your vision?
- Is there a measure you can look at that will give you an indication that what you’re doing is moving you towards your strategic goal?
Tips on creating your KPI trees:
- Keep it human – make your strategy something that everyone can understand and work towards
- Publicise and radiate – share your KPIs with your team
- Act on your KPIs – is it telling you something is going wrong?
- Don’t rely on measures - think about what they are actually telling you
- Keep it fresh
There are a number of tools that can be used to help with your KPI tree:
- Google Analytics / Kiss Metrics / Mix Panel
- Flurry (Yahoo) / Positionly / Klout / Delighted
- Geckoboard / Simple KPI / Klipfolio / BIME / Cyfe
- statuspage.io / Munin / Nagios
- Qualaroo / Qeryz / Survey Monkey / UserVoice
With the seeds of each attendee’s KPI tree planted, the session was complete, giving the opportunity to take their trees back to their organisation to water, nurture and grow.
Reflecting on the session, some of the insights and actions taken away included:
“I need to set some targets for my measures, instead of measuring for the sake of measuring”
“Reviewing my customer’s metrics to see if I can align them closer to the real goal is important”
“I want to set up some sales funnels using Google Analytics”
“I need to check that I’m gathering the right metrics”
The session slides: