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Measure What Really Matters: The Secret To Effective KPIs

By John Dillard

measure-key-performance-indicatorsAs an agency leader, you don’t want to make decisions without the right data on hand. But, when it comes to decision-making metrics, are you sure you’re using the measures that matter most?

Especially among national defense and security agencies, the term “Key Performance Indicator” (or KPI) is a widely overused buzzword. KPIs mean various things to different leaders, almost to the point that agency executives aren’t sure what defines a KPI and what doesn’t.

Here’s a breakdown of the term “KPI” that helps you better understand what makes a KPI an effective metric to use at your federal agency:

Key

“Key” signifies that your indicators should be the critical few metrics with the most importance. Your KPIs should be only the highest priority indicators that provide more insight than any other measure or metric at your government agency.

If you find that you have a long list of KPIs, then you’re not using KPIs correctly. Most agencies and organizations only have three to five KPIs that are the most predictive of success. Unless your list of KPIs is limited to a very small number, it might include great metrics but your measures aren’t key performance indicators.

Within the same organization, a low-level department might have different KPIs than a higher-level group, but within those levels, no department or group should have more than five KPIs.

Performance

“Performance” means that your KPIs need to measure achievement or success at your agency. While a particular metric might be interesting or even useful, an effective KPI must be tied to the success of your organization’s mission.

The performance aspect of a KPI assumes that you know what you’re trying to achieve as an organization. If you don’t know where your agency is headed or you aren’t sure what defines high performance, you first need to establish your definition of organizational success before you’re able to select effective KPIs.

Indicator

“Indicator” does not mean an answer or a result – it denotes a direction of results. For many federal security agencies, their metrics or data dashboards are based entirely on lagging measures and not predictive ones. The results are KPIs that fail to help you improve or change direction, if necessary.

Your key performance indicators need to forecast future performance within your defense or security agency. They don’t necessarily have to be perfectly aligned or correlated with your final results, but they need to be the most predictive of those results.

For example, suppose you’re trying to measure the timeliness of delivering intelligence data to government decision makers. A poor KPI in this situation would be how many reports you delivered last month, because that measure isn’t indicative of how well you’re performing now or how you might perform next month. A better KPI would be to measure the volume of pre-report data that your employees have processed, as this predictively indicates how many reports you will complete in the next month.

5 Solid Examples For Better KPIs

Now that you know how to select and develop better key performance indicators for your agency, here are some examples of effective KPIs to integrate into your data dashboards and analysis tools

  • Time

  • Errors

  • Costs (including hidden costs)

  • Soft values

  • Return on investment

Developing effective KPIs at your national defense or security agency isn’t always a clear-cut task. But, when you take the time to select and determine the best indicators of your agency’s success, you realize your goals more efficiently and advance your agency’s mission more effectively.

Want more in-depth insights on key performance indicators at your agency or organization? Click below to download our free guide:

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