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How to Develop Key Performance Indicators - YouTube
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hi my name is erica olsen today's
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whiteboard video is on key performance
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indicators or KPIs for short KPIs are
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those things that are associated with
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either goals or objectives whatever
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you're calling them those elements of
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your plan that are the expressions of
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what you want to achieve by when those
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quantifiable outcome-based statements so
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KPIs answer the quantifiable piece of
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your goals and objectives they come in
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three different flavors so we'll talk
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about that in just a minute but before
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we do I putting great kpi's together and
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making sure they work well for you need
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to have these four attributes and before
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I talk about this for attribute so I
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just want to say the reason they need to
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work well for you is because KPIs are
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the heartbeat of your performance
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management process they tell you whether
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you're making progress and ultimately we
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want to make progress against our
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strategy so kpi's are the thing that do
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that for us so you're going to live with
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them a lot so let's make sure they're
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really good
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ok so the four things you need to have
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in order to make sure your KPIs work for
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you are number one is your measure so
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the measure is the verbal expression
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very simply in words of what what are we
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measuring which is fairly
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straightforward
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the tricky thing is is we need to be as
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expressive as we possibly can with our
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measures so number of new customers
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that's fine there's nothing wrong with
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that but a little bit advanced or a
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little bit more expressive would be
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number of new customers this year or
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number of new customers for a certain
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product or certain service so what is it
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is it yeah so what is so we really clear
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and when it comes to have measuring it
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on a monthly basis you're gonna want to
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be as clear as possible so number of new
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customers let's say this year
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number two is our target our target is
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the numeric value that we want to
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achieve so a couple things that are
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important about this is the target needs
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to be apples to apples when the goal
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date is is set on the due date is set so
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we want to achieve a thousand new
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customer
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by the end of the year so the due date
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in the target for candid hand the other
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thing is the measuring the target need
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to work hand-in-hand so it's a number so
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this is a number this is a percentage is
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the percentage you get the idea third
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thing we actually run a report on this
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data so where is it coming from the
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clear about what the sources most
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organizations have all sorts of data
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sources fragmented systems so making
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sure you identify where the state is
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coming from will save you a lot of time
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and then frequency so how often are you
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going to be reporting on this kpi
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ideally you're running monthly strategy
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reviews to report on the progress of
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your plan at least monthly in which case
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we'd like to see monthly kpi's so you
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gotta be able to pull the data monthly
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in order to make that happen
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that's not always possible but let's try
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to get there certainly some
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organizations are weakly and others are
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daily mobile is a good place to start so
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frequency great so now we know a
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component that need to have in place in
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order to have our KPIs here are some
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different types of KPIs that you might
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think about as you're putting your plan
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together so there are just straight up
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raw numbers i call these widget counting
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there's nothing wrong with which
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accounting they don't necessarily tell a
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story i'll talk about how to make this
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tell a story in a minute but this is
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just simply which account number of
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things
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the second thing is progress so this is
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really often used it's great on we use
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this which is expressed as percent
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complete percent complete of the goal
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percent complete of a project whatever
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it might be a project type measure it's
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a good measure if if you don't have
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quantifiable measures are you can't get
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the data and you just want to track the
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performance of the goal as it relates
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that action is being completed under it
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the third type of indicator is a change
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Type Indicator like percent increase in
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sales may he was better would be percent
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increase in sales compared to last year
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and the idea is twenty-two percent so
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you can see how that starts to be more
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expressive and work with the target so
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this starts to tell a little bit more of
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a story and this one does right
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and if you want to actually make your
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widget countermeasures tell more of a
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story like this one does
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you might change something like this to
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read percentage of new customers acquire
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compare the same time last year so
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that's an example
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ok so now we know what we have to have
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in place and kind of different types of
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measures to get our ideas flowing let's
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talk about one thing that you might take
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your measure writing to a next level and
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that is think about the fact that there
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are leading and lagging measures so
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leading and lagging indicators so
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percent increase in sales or sales is a
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lagging indicator it occurred as an
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outcome if you want to make sure that
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you're on track
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you might have a KPI in place which is
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telling us whether were gonna hit that
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increase such as your pipeline maybe
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number of weeds or the side of your
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pipeline so we don't want to over rotate
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on is necessarily but we do want to make
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sure we have a combination of leading
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and lagging measures when we're looking
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at our performance of a monthly basis so
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with that that's all we have for today
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hopefully you have what you need to
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write great KPIs for your organization
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happy strategizing and don't forget
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