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Management of KPIs to Drive Success

Management of KPIs for any organisation is a challenge but its especially difficult for membership based organisations.
 
We all know that in order to achieve our goals we need to have a much better handle on just what our KPIs should be and how to track them. In my experience we should be aware of what the standard measures are and ensure that they are S.M.A.R.T.
 
  • Specific – target a specific area for improvement
  • Measurable – quantify or at least suggest an indicator of progress
  • Assignable – specify who will do it
  • Realistic – state what results can realistically be achieved, given available resources
  • Time-related – specify when the result(s) can be achieved.
In particular I believe we should focus our effort to measure those elements that deliver our Strategic Competitive Advantage as that is what will be powering our current and future business success.
 
Once we understand the KPIs we wish to measure then we need to determine the actual metrics to report on.  We should have enough to quickly inform the organisation where we are achieving our targets,  and where we are not. Where possible can use rolling average charts to identify both positive and negative trends fast.
 
We also do not want so much data that we are swamped as this often makes decisions harder and of poorer quality.  Reporting on KPIs should be as automated as possible as you do not want your team to spend all of their time collecting and recording the data.
 
You want them to stay focused on the business deliverables, building your value proposition for members and increasing engagement with them.
 
So where do you start?
 
Complete your Business Plan
 
If you have Business Plan then ensure its up to date. For some you will be starting it and in this case you should get the best Strategic Business Consultant you can afford involved. The result will be worth it and their independent thinking will challenge your status quo and take your business to places you didn't know you could.
 
If you can not afford a great consultant then do not use a bad one, ask a mentor or industry leader if they will help you out. This process will be generating the blueprint for your future success so make it count. Its really important to remember the old saying "is not the plan,  it's the planning that counts" so don't write "war and peace".  This is one of the situations where size does not matter.
 
Determine your Value Proposition, SCA and Offer
 
The business planning process with help you better understand your target markets for members,  partners and sponsors.  Only then can you outline the products and services that are important to them. What do you have now, or could deliver in the future, that has a high perceived or real value to them. And more specifically, what can you provide that others cannot. This all forms your SCA (Strategic Competitive Advantage). Also look at what you are currently doing that offers no value to members as the time and cost spent delivering this service could be better spent.
 
Your true opportunity comes from this process.  What value proposition can you offer to each cohort and what value do they they place on this offer.  Keep in mind this 'value' may be far different to what you believe its worth.  Again the independent thinking will help you here. 
 
KPIs and the Key Performance Question
 
From your SCA you should determine your KPIs.
 
  • what is the goal of each core element of your offer and specifically your SCA?
  • how do you measure that your delivering the value you intend - your KPI?
  • how do you relay this achievement to relevant stakeholders internally and externally? 
  • how do your members, partners and sponsors feel your performing to their expectations of the offer?
I believe a good approach is to have a Key Performance Question (KPQ) for each KPI. That question needs to address a specific element of your offer and needs to clearly identify your achievement of the related KPI. As a general rule - if you can’t define the KPQ then the KPI, and it's related value, may not be as important as first thought.
 
KPI Reporting
 
Reporting for tangible KPIs is straightforward such as transaction quantities or totals, activity levels, or response times etc.
 
But in most membership based organisations many KPIs are intangible, non-financial or transactional, so you need to look at how to properly and efficiently capture and record evidential outcomes to report your measurements. This is far more difficult than for tangible KPIs and where the KPQ really proves its worth.
 
Many of your tangible KPIs are quite simple to report on, such as :
 
  • cash generation per time period or product
  • member numbers per plan and new member acquistion rates over time
  • debtor days outstanding per cohort, or product
  • member retention and upgrades rates over time
  • member churn or lapsed rates over time
The intangible KPIs is where the hard work starts.
 
  • how do you measure member engagement?
  • how do you track your reputation?
  • how do you capture the actual value delivered to external parties?
Member Engagement
 
In addition to the above points which are all important. One measure many of our clients request is a measure of Member Engagement.  Are your members becoming more or less engaged with your Organisation? But setting a KPI for this can be very tricky as it varies so widely from business to business. To assist our clients we recently ran a national survey to capture ideas from thousands of membership organisation leaders on this topic.
 
In this digital age we can track all digital interactions including the standard metrics of website visits, pages read and time on site, but also transactional/ecommerce (volume and value), member collaboration, social commenting and feedback, newsletter opens rates, resource contributions and uploads,  and much much more. Of course other measures of engagement resulting in both positive and negative (complaints) engagement values could be collected but this might require staff involvement which is costly to capture.
 
The real challenge is to identify the respective importance of each of these interactions so a benchmark value can be understood, and a KPQ documented then KPI set.
 
Using your KPIs to increase Engagement
 
Once you have set this value for both organisational and individual engagement then the question is ... how do you drive increased engagement.  There is good statistical evidence to show that increased engagement drives an increased positive perception of your value proposition and organisation, as well as improved financial outcomes.
 
Researching "gamification" strategies will help you develop your engagement formular.