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4 Easy Tips How to Create KPIs to Improve Teamwork and Achieve More


Have you ever participated in a KPI development meeting?

Typically, these sessions are fairly productive and mostly positive. The participants quickly define a bunch of good indicators and it seems like a great start (or, at least, they seem to be good until implementation). In two weeks, when a team leader assesses the performance of the KPIs, some unexpected shortcomings start to emerge.

In most cases, these shortcomings are:

Each of these has a significant impact on teamwork. Combined, they can easily lead to demotivation. So, if the team leader doesn’t address them, KPIs are doomed to fail.

In this post, you’ll read about how to define KPIs the right way. Below, find the most important KPI solutions to stimulate teamwork and maximize performance.

1. Addressing the Why in KPI Setting

Helps with resolving:

Basically, the development of KPIs comes down to two things: the Why and the Specifics.

Every well-defined KPI is essentially an answer to the question: “Why was this KPI developed?” It’s the justification explaining the importance of the indicator to the overall business goals.

Here’s an example:

KPI: Reduce customer churn by 5 percent The Why: the company loses customers! The customer churn directly impacts the company’s growth and requires more careful corporate expense management. The reduction of the churn leads to higher revenues; the churn of 20 percent and higher indicates significant red flags like increased operational issues. We need to work on customer success and improve growth. Related Benchmarks: total new customers. These are the people who become paying customerstotal customers lost. The people who haven’t renewed subscriptionNet Promoter Score (NPS) Customer Service. This indicator tracks customer loyalty.

Addressing the Why means conducting a comprehensive analysis of each KPI and uncovering related issues and goals. Eventually, you’ll have a good understanding of who should be responsible for a KPI and how to measure its performance.

In the case of customer churn reduction, one can measure its performance using the above benchmarks. The persons responsible for growth and customer success should be accountable for the implementation.

2. Set Realistic Expectations from the Team

Helps with resolving:

Before you create the KPIs for your team, you need to have a good understanding of what they can achieve. If you don’t, you might end up giving them unrealistic goals and performance benchmarks. In turn, unrealistic goals are the biggest demotivating factors for employees.

There are two major steps to take to avoid unrealistic goals: measure team performance and make changes to the goal-setting process.

Setting Realistic Expectations: Measure Team Performance

Begin by doing these simple steps:

Keep in mind that you can use time-tracking apps for your business to effectively measure average task completion times.

Setting Realistic Expectations: Making Changes to Goal Setting

The goal here is to prevent you from setting yourself up for failure by doing:

3. Don’t go Overboard with KPIs

Helps with resolving:

Creating too many KPIs is another major blow to a team’s motivation and performance. The leaders need to think about how many of them their team actually needs to achieve the goals, and often they go overboard.

We gotta admit, though: the task of selecting KPIs is tricky.

The final number varies with every company and project. In this Guide to Key Performance Indicators, PwC says that the formula for selecting KPIs doesn’t exist, but recommends between four and ten measures.

If you’re still unsure where to start, use this framework.

Important! Lagging metrics can make a huge difference in helping your team stay focused. Take a product email working on the project to increase the number of people signing up for a free trial within a month. If they choose to have only leading KPI, they would have to wait an entire month to get any information on their performance.

Creating a simple, spreadsheet-based KPI report describing the performance of the team is a good way to implement the framework. Use online tools like EssaySupply and Grammarly to write concise, on-point, and clear reports for your team.

Free image from Pixabay

4. Ensure that Your Team Understands KPIs

Helps with resolving:

A huge reason why teams fail to achieve KPIs is a lack of understanding of techniques, strategies, technical components, and other things they’re supposed to use.

Often, it’s a mistake on the leader’s side, who fails to communicate the KPI and the means to achieve it.

For example, the leader simply asks the team if they understand KPIs. He or she answers their questions to the best of their ability. In many situations, some important topics remain unaddressed.

There are at least two good reasons for this.

First, the KPI setting meeting might be time-limited, so something is left for later. This often occurs when setting KPIs for remote teams. Second, team members might not be comfortable asking questions that require a thorough explanation to avoid taking up too much time.

To cover everything, make sure to follow up with an online survey. This way, you can ask if everybody understands what they need to do.

The survey can include questions like these:

Not only will you help your team but also improve their work satisfaction. If there’s a need to increase employee loyalty as soon as possible, learn how to do employee journey mapping.

How to Create KPIs to Improve Teamwork: Summary

Now you know how to address the four most common shortcomings of KPIs. By reducing their impact on your team, you’ll be able to prevent a lot of issues undermining teamwork and motivation. Here’s how to do this, once again:

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