Continuous Improvement

One KPI Measurement Cannot Assess Different Goals. Why?

It may seem evident that key performance indicators (KPIs) or metrics play a crucial role in measuring success. However, what needs to be explained is if one KPI can measure more than one goal. In her blog, Stacey Barr explains why one KPI measurement for different purposes does not make sense. Barr describes that business leaders must have direct evidence of that particular goal to measure performance and draw precise conclusions.

Single KPI Measurement for Different Goals Poses Problems

Organizational Goals Are Repetitive

It is common for business owners to repeat their goals. Often, two goals can look different but mean the same. For example, “offering the best performance” and “providing excellent customer service” can mean the same—striving for excellence. Aligning a KPI measurement for the same goals or objectives presented differently may offer different results.

KPI Measurement Monitors Solutions

Business leaders end up measuring solutions or spin-off benefits. “A single solution could potentially help more than one goal. And the same spin-off benefit could come from more than one goal,” says Barr. The author cites the example of two goals, “reducing work” and “increasing productivity.” To achieve these goals, organizations must streamline their business processes. However, measuring the percentage of streamlined business processes cannot provide accurate data on whether the goal is achieved or to what extent it is accomplished.

Misses the Direct Relevance

KPI measurement proves helpful only if it is directly relevant. If leaders cannot directly measure a goal, their actions will fail to impact it. The author shares the example of staff turnover as a measurement used in most organizations. Companies align staff turnover with employee engagement, recruitment, and workforce retention goals. However, measuring staff turnover is directly relevant to retaining the workforce. A single KPI measurement cannot monitor the other two goals of employee engagement and recruitment. Therefore, leaders must find specific and relevant KPIs to measure the other goals.

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