#24 KPIs: What they are and why you need to have them
There are many different KPIs in sports that you can create based on your organization's specific needs. But no matter what strategic goals you are trying to achieve, big or small, one thing is for certain: your KPIs need to be SMART. SMART is an acronym that stands for specific, measurable, achievable, relevant, and timely. In other words, when formulating a KPI, you need to ask yourself the following questions:
- Is this KPI Specific enough? And you should be very detailed here by accounting for what exactly needs to be accomplished? Who’s responsible for it? And what steps need to be taken to achieve it?
- Next, Is this KPI Measurable? You can only measure what you quantify so make sure that your strategy has some form of measurability so you can know the success of it, by comparing the before and after numbers. Saying, I want to increase revenue, for example, is specific but by how much becomes the next question. Hence, the need for measurability.
- Thereafter, you have to ask yourself, Is this KPI Attainable? Having big dreams is important however when setting up your strategy and goals, you have to give yourself a reality check. With the current resources and team you have, can you realistically achieve the goal you have just set or the strategy you want to implement? If not, what do you need to have in place to make your strategy attainable?
- Another crucial consideration is, How relevant is your strategy or goal to your organization? This is the part where you get to really ask yourself why you are setting that specific goal, pun intended. Those who work data-driven can really justify themselves at this stage by looking at what their data says and pursuing something in that direction. Whereas, unfortunately, if you are not working data-driven, you will have to make guestimates, which aren’t reliable at all. So, as a first step, we recommend, working data-driven. Listen to episode 3 to learn more about working data-driven.
- Finally, you want to be clear about the time you allocate to your strategy, goal, or whatever project you are working on. So, you should as questions like, What is the Time-frame for achieving this goal? When will you start implementing your strategy, when will the strategy be finished? You and your team need to be on the same page when it comes to timing.
Setting KPIs according to this framework will make it so much easier for you to assess the performance of your different strategies.
What would this look like in practice?
If we were to look at the example about increasing revenue, this is what a smart goal would look like:
Grow the monthly recurring revenue of the organization by 150,000 within Q1 of 2022. This will be accomplished by creating targeted limited-edition merchandise campaigns, which will begin running in January 2022, on three social media platforms: Facebook, Twitter, and Instagram and the organization’s website. Since most of the organization’s purchases happen online, creating a buzz through the limited-edition merchandise and pushing this online will ultimately increase sales, and will increase our monthly recurring revenue.
The KPI here will be the increase in revenue. This means that the KPIs you set will act as indicators of how well you are performing on that goal. For instance, it could tell you that you are generating only 30% of the sales target you had set from the get-go. Or, it could tell you that you sold 10% over your target goal. Whatever the case, your KPIs will let you know when things are going according to plan and when they aren't.