KPIs are a shortcut to success – if you know how to triage
By Talend Team
Let’s start with a hard truth: If you try to do everything, you won’t excel at anything. In a growing business, there’s no shortage of things that need attention, but you can’t do everything at once. Instead, you have to decide where to focus your resources to get the greatest impact. In a word, you must become a master of triage.
Triage means making the tough calls. It means cutting program budgets to free up resources to run down existing leads. It means postponing the development of new features to shore up core functionality — or it could mean running the risk of alienating your existing customer base so you can develop a potentially industry-shaking new feature. In triage, there are going to be losers. But there will also be winners, and that is how companies survive, thrive, and grow.
To start, decide on your triage philosophy. Are you playing offense or defense?
Which KPIs should I track?
When you’re a fast-growing business, there are a million metrics that you could track. So many possibilities can make it challenging to isolate the handful that say something meaningful about the health of your company. That’s why it’s crucial to start by identifying your key objectives — the goals that will make the most significant impact. Your KPIs (key performance indicators) are the metrics that tell you how well you’re performing against the targets that matter most to your business.
Key objectives will — and should — vary from company to company. They depend on where the company is in its growth, what challenges it’s facing internally or in the marketplace, what’s happening in the macroeconomic climate, and more. In the offensive triage strategy example above, a company establishing their position on customer service will want to measure things such as CSAT and NPS scores. An early-stage technology startup fresh off its Series A funding round may set aggressive product targets and will keep a close eye on its product metrics. Meanwhile, a company evaluating an exit either by acquisition or IPO, such as the defensive example above, will want to subject financial metrics such as ARR, CAC, burn rate, and the sales funnel to intense scrutiny.
Once you know what you want to track, look for ways to automate KPI reporting. Automation will minimize the person-hours you invest in your reporting, freeing those assets to do the creative thinking of solving problems instead of measuring them. An automated reporting system will also let you set up background tracking for KPIs that aren’t part of your active strategy, so when you do have bandwidth to address them, you have that history at your fingertips without additional investment.
It can be very easy to let KPI reporting slide — especially in high-growth companies where bandwidth is at a premium. Often the relevant metrics are still being tracked by someone somewhere, but the executive leaders who need the information most may not even have access to the tools or dashboards where those metrics live. As part of your KPI planning, think about how you are going to get the data from the systems where it originates and into the hands of senior leadership.
Finding the right approach to executive reporting
Early-stage companies frequently leave reporting up to the individual department heads — in fact, the company’s main data leader may be the head of an entirely different department, such as operations or finance. If that is your situation, you should provide clear direction on who is responsible for reporting, which metrics should be included in those reports, and how the reports should be formatted. After all, it can be difficult to have a meaningful conversation about KPIs when the marketing metrics are in a high-level slide presentation while the financial figures are shared through a complicated spreadsheet. Establish a protocol for reporting that ensures that metrics are readable, sharable, and comprehensible.
On the other hand, you may be a more mature or established company that already has a BI tool that you use for building aggregate dashboards to report on cross-functional data. It cannot be emphasized enough that you must resist the temptation to use your existing dashboards for executive reporting. What seems like an appealing shortcut at first never works out that way — in the executive leadership meetings where they discuss the data, flipping between different dashboards will become a frustrating obstacle to valuable conversations, and the presence of irrelevant data points could spin the team off on futile tangents. Invest the time to build a new, clean dashboard exclusively for executive KPI reporting.
Whether you build a single executive KPI dashboard or rely on individual owners to provide regular reports, you’ll want to establish a reliable method to deliver consistent KPI updates to senior leadership. While the report should highlight the most current data, it should also provide an easy way to pull up historical data when needed. At every meeting of the executive leadership team, they should refer to those KPIs and use them as a framework for discussions about the larger direction of the business.
Always remember that no matter what your strategy, communication is key. The entire organization — from the executive leadership down to every individual contributor — should understand what you are tracking, why those numbers matter, and how they can contribute to your overall success.