Throughout my career, I’ve encountered numerous KPIs that turned out to be a waste of time – some of which I set myself. However, each experience has taught me valuable lessons on how to establish better KPIs. In this blog post, I’ll share five common pitfalls to avoid when setting KPIs.
Lesson 1: Distinguish Key Results from Initiatives
It’s easy to mistakenly define a Key Result (KR) as an initiative, such as “rebuild our website from scratch” or “implement a new onboarding process.”
These binary results are either:
- accomplished (100%)
- not (0%).
To avoid this trap, ask yourself why you want to pursue the initiative. By digging deeper, you’ll likely uncover the underlying business process you aim to improve. This insight might even prompt you to reevaluate your initial initiative and work on something else instead.
Lesson 2: Embrace Simplicity for Key Results
Complex KRs can be subjective and difficult to track, often requiring calculations by a single individual. This can lead to delays and confusion. If you’re tempted to use a complex KR because it seems more accurate, consider simplifying it and setting a slightly less ambitious goal. This approach will benefit your entire team. Ideally, choose a metric that your company already tracks, but be open to implementing new tools when necessary.
Lesson 3: Aim for Ambitious Key Results
Avoid setting KRs that are too easy to achieve, as they might suggest progress when, in reality, you haven’t moved forward. When reviewing your KR progress, ask yourself if achieving 70% would feel like a success worth celebrating. If not, it’s time to revise your KR. If KR is not ambitious why do you want to track it at all? It’s a waste of time.
Lesson 4: Seek External Validation for Key Results
Your KRs should be validated by external factors, not by folks who are directly responsible for achieving them. This external validation can come from outside your team, like through the number of invited talks, or from another team within your organization, such as sales validating qualified leads for marketing.
Lesson 5: Avoid Subjectivity in Key Results
Aim for KRs that can be easily measured by anyone, without the need for expert knowledge. Subjective KRs, especially those validated internally, can lead to discrepancies and misunderstandings. Ideally, two different people should be able to independently provide the same value for a KPI without consulting one another.
👉 This list is not complete, but hopefully you’ll be better equipped to set effective KPIs that drive meaningful progress and growth for your organization. Embrace simplicity, aim high, and seek external validation to create KPIs that truly reflect your goals and aspirations.