Metrics are important in any workplace. They help us set goals, measure success, and keep a team on track in any industry. At TopLine Results, we have several methods for monitoring our direction and ensuring our efforts are invested in areas where they will have the biggest impact. Let's define some tools that can help organizations establish a plan and track its progress.
KPIs (Key Performance Indicators) are measurable indicators of a specific area of a business. For example, if your goal is revenue, a KPI might be the number of contracts of a certain size closed per week. This is a leading indicator for revenue. If customer satisfaction is what you are looking for, a KPI might be NPS (Net Promoter Score), which is a lagging indicator. It measures customer sat after a product or service is provided. Typically, a KPI applies to the overall organization but can sometimes be part of an individual’s specific activities.
KRAs (Key Responsibility Areas) relate to an employee’s roles and responsibilities as set forth to achieve the company's strategic goals. Everyone has a job description with a list of responsibilities. Many items on that list are KRAs.
CSFs (Critical Success Factors) relate to the achievements of strategic goals. CSFs are the necessary steps needed to achieve a strategic goal. Missing a CSF can jeopardize achieving the goal successfully. When stating a goal in a strategic plan, it is important to list the CSFs necessary to achieve each goal. Some companies may use targets or timelines to articulate a CSF.
IDPs (Individual Development Plans) are unique plans outlined for each team member based on his/her job description. The IDP is a guide for each employee's performance and growth. This plan is developed between the employee and his/her manager to help them grow with purpose while achieving the overall strategic goals of a business.
While KRAs, CSFs, IDPs and job descriptions are usually documented in a detailed fashion and can be somewhat static for a given year, KPI values can change daily or weekly and can be difficult to obtain and maintain. These numbers may come from various sources, like your ERP (Enterprise Resource Planning) system or accounting software.
Often, many of these data points can be captured from a well-designed and used CRM (Customer Relationship Management) system. Because KPIs are generally aggregate numbers, a data visualization tool like Power BI may also be necessary to create a dashboard that achieves the appropriate level of visibility for all interested parties.
An example KPI, KRA and CSF might be the following for a new salesperson:
- KPI: Number of leads converted
- KRA: Finding new business opportunities
- CSF: Building effective lead lists in a CRM database
An example KPI, KRA and CSF for a consultant might be:
- KPI: Portion of time serving customers
- KRA: Providing delightful and timely customer service
- CSF: Increasing expertise in solutions provided
Organizations should always strive to have great alignment between their company’s overall strategy and individuals’ KRAs. The constant visibility of KPIs allows all to know how the company is performing and the impact each team member contributes. Well-defined KPIs, KRAs, IDPs, CSFs, and job descriptions are all keys to success.
We have helped several organizations use their CRM and/or a series of Power BI dashboards to collect and maintain KPI data to provide strategic insights that lead to action-oriented decision-making. If you need help reporting on KPIs for your company, give us a call at 800-880-1960 or email us at firstname.lastname@example.org . We’d be delighted to assist!
~Fred Varin, President of Topline Results Corporation