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Stacey Barr
Stacey Barr
Performance Measure Specialist

Stacey Barr Pty Ltd
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5 Tips For Naming Performance Measures and KPIs

Posted about 10 years ago

Here are five of the tips I’d recommend you consider when you want to formalise a particular KPI in your organisation or company (you don’t have to use them all, though):

1. unique name
2. accompany with a description
3. motivating language
4. adopting industry standards
5. 5 words or less
6. leave the target out

Oops! That was six tips, not five!

TIP #1: GIVE EACH PERFORMANCE INDICATOR A UNIQUE AND SPECIFIC NAME

A transport company I have worked with KPIs hundreds of things. One of them is the number of orders for deliveries. A pretty straightforward KPI, you might think. Except that depending on who reports it, it is called different things, so users of the reports never know exactly what they are looking at.

Make sure the adopted name is the one that is used where ever and when ever that indicator is reported.

TIP #2: ACCOMPANY EVERY INDICATOR NAME WITH A DESCRIPTION

Have you ever been frustrated by a report where a name like “Customer Loyalty Index” sits above a chart, and you have no idea what the numbers mean?

Use a sentence that describes what your KPI is, giving more information than any name can. You might like to include things like the type of statistic (e.g. average or percentage), for what population (e.g. all employees versus non-managerial employees), and what the construct of the KPI means (e.g. have attained all competencies associated with their current roles).

TIP #3: USE ENGAGING AND MOTIVATING LANGUAGE

I’ve recently worked with an organisation whose people are very creative, and they inspired me with their approach to naming measures: they used very emotive exclamations as KPI names. For example, “You can’t keep me away!” as the name for a indicator of customers coming back for more.

Play with using affirmations, catch cries, headlines or other sensory rich statements to name indicators.

TIP #4: ADOPTING INDUSTRY NAMING STANDARDS

In the procurement industry, how fast inventory is turned over is a commonly used KPI, and most often, it is referred to as ‘Inventory Turn’.

If you’re using indicators that are accepted more widely in your sector or industry, adopt the naming conventions that are already accepted.

TIP #5: USE FIVE WORDS OR SO IN THE NAME

Too few words in a KPI name can be as bad as too many. “Customer Index” says virtually nothing, whereas “The percentage of customers that either strongly agreed or agreed that our service is better than any of our competitors” is too long. A balance might be struck half way between the two: the indicator name of “Compared to Our Competitors” with a description matching the longer statement above.

Aim for writing you KPI names in around 5 words, and fine-tune it from that starting point.

TIP #6: LEAVE OUT THE TARGET

“Reduce waste going to landfill by 20% next year” is not a performance metric, but a goal (or objective if you prefer). The metric is actually the amount of waste going to landfill. The rest of it is really the target and timeframe.

Because KPIs often outlive their targets (that is, a single measure may have several targets throughout its lifetime, each subsequent target encouraging further improvement), name your indicator before you frame it in a goal or objective statement.

THE ADVANTAGES OF WELL NAMED KPIS

Irrespective of whether you take on these ideas for naming KPIs or not, you’d have to acknowledge that when indicators are named well, they get higher recognition, greater ownership, and far less confusion. So thoughtful naming of your KPIs is one little thing you can do toward simplifying an activity that probably already causes you more rework than you dare to think about!

ABOUT THE AUTHOR

Stacey Barr is a specialist in organisational performance measurement, helping corporate planners, business analysts and performance measurement officers confidently facilitate their organisation to create and use meaningful performance measures with lots of buy-in. Sign up for Stacey’s free email tips at www.staceybarr.com/202tipsKPI.html and receive a complimentary copy of her renowned e-book “202 Tips for Performance Measurement”.

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