mistakes

While setting up Key Performance Indicators isn’t usually a high difficulty project, it’s also not difficult to make mistakes and trip into common pitfalls. Let’s examine some of the most common so you can avoid them.

1. Going BIG too early
   Occasionally, I’ll see a client define a really solid set of KPIs. No, really – a really solid set where all the KPIs are spot on, everything matters, there’s nothing missing. Everything is exactly right.
   
   There’s just way too much to get started with.
   
   For a small-to-medium business new to managing with KPIs, it can be overwhelming to go from no KPIs to all the sudden having a dozen or more (many more sometimes) per department, rolling up to central management. Sometimes it’s best to pace yourself and introduce KPIs over time.
   
2. Creating too many KPIs
   As opposed to the previous answer, it’s also easy to just go overboard and over do it when implementing KPIs. It’s easy to want to measure everything under the sun. You can convince yourself that you really do need every single measure and metric. But the question is do you really? For most of the clients I work with I provide the gentle reminder that they’ve been working “okay” this long without KPIs, and true, while using KPIs will greatly accelerate performance, it doesn’t follow that they absolutely without a doubt have to have every KPI under the sun.
   
   
3. KPIs that don’t matter
   One of the biggest reasons for too many KPIs is adding in measures or metrics that quite simply just don’t matter. For each KPI, it’s important to ask two questions:
   1. How long is it going to take to gather and present this data point, and is it worth that effort?
      
      Occasionally, some data points are interesting but just not worth the effort.
      
   2. What action will I take based on changes in this data?
      
      If you’re not going to make any changes or take any action, do you really need the information? Usually, the answer is no. Sometimes, the answer is there is a different KPI that already answers the question from another angle. Re-think your data point and your question.
      
      
4. Missing critical KPIs
   This point and the next are related. Your first pass at establishing KPIs will not be your last. Based on my experience, the likelihood is high that you will forget at least one KPI that, as it turns out, is extremely important to the business. Sadly, we’re human and it happens. Let it happen. Get started with what you have and review to add what is critical yet missing.
   
   
5. Waiting for perfection
   It is very common that a few KPIs you really want turn out to be challenging to collect for some reason. Great – get started without them. Do not wait. Mark my words, if you are told the data will be available in two weeks, two months will elapse. Do not wait. Get started with what you have and tune/add/substract KPIs later. Perfection is the enemy (said to you by an ever-recovering perfectionist).
   
   
6. Failing to set a Plan for your numbers
   Create Plan numbers for your KPIs. For every month. Make it so that you have planned performance that you can review every month in order to checkpoint performance.
   
   Note that technically I’m not saying “set goals” – I’m merely saying set your plan numbers. Remember that you don’t have to set an improvement goal for every KPI. But it’s a great practice (a best practice, even) to have a plan and check performance on a formal cadence.
   
   
7. Failing to review performance against KPIs
   If you do not establish a formal monthly review ritual and periodically informally review performance, don’t even bother setting up the KPIs. You’re wasting your time.
   
   
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