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The Surefire Way to Make Your KPI Tracking Useless
KPIs without a backbone – no clear structure, no defined endgame – that's a one-way ticket to 'KPI implosion.' - or worse. I've said it before. Now, let’s get real about why those once-shiny KPIs end up gathering dust. Here are the top 5 culprits:
- Trying to measure just about everything
- KPIs not tied to anything that even looks close to a strategy
- Crystal Ball Gazing – Relying Only on Lagging Indicators
- Fuzzy Focus – Using Vague or Unactionable KPIs
- The "Set It and Forget It" Trap
1. Trying to measure just about everything
This one has roots in human nature that precede data. The more I track, the more I know, right?
Wrong. It just creates so much noise that you drown in the deluge of data. Subsequently, focus inevitably shatters, clarity evaporates, teams get overwhelmed, and actions grind to a halt.
It's analysis paralysis, plain and simple.
Remember: KPIs are KEY INDICATORS. Not all indicators. Choose selectively.
Quick Example: An e-commerce store tracks 50+ metrics. Sales plummet. Why? Key data like Customer Acquisition Cost is buried so far down that it would take a team of data scientists and a shovel to find it.
Sure, tracking KPIs like this will keep you busy, but it's not even close to being effective.
2. KPIs not tied to anything that even looks close to a strategy
You’ve got your KPIs, they look Great. But do they link to your big goals? If not, you're flying blind.
I always ask businesses this: Did you choose your KPIs because "everyone else tracks these," or did you work backward from your goals first?
“We saw that others in our industry track these”, just does not cut it.
Effective KPIs are your GPS. They must reflect your strategy. Otherwise, you're just collecting numbers. Pretty numbers, maybe. But they won't tell you if you're winning.
Quick Example: A company aims for innovation in drone production. Their KPIs? All operational, like cost per unit and uptime of machinery.
Efficient, yes.
Innovative? Who knows, the KPIs don't say. Their KPI GPS isn’t activated, and the rotor blades fell off.
3. Crystal Ball Gazing – Relying Only on Lagging Indicators
Always looking back? That's a lagging indicator focus.
Think 'Quarterly Sales.' 'Annual Churn.' They tell you what happened. Useful, yes. But they don't help you steer. They're history lessons. You need foresight, which means leading indicators. These predict future outcomes and give you time to act-to change course-before it's too late. A healthy mix is crucial.
The Problem: No foresight. Reactive decisions. Missed chances to fix problems early. And crucially, constantly feeling like you're playing catch-up.
Quick Example: A software firm tracks only Monthly Recurring Revenue (MRR). MRR declines. Surprise! Leading indicators like 'Trial Sign-ups' would've warned them sooner.
They could have acted or addressed technical or visual issues before the impact was felt in the MRR.
4. Fuzzy Focus – Using Vague or Unactionable KPIs
Does your KPI make you ask, "So what?" Bad sign. I've seen many like "Improve Customer Satisfaction."
Sounds nice. But it's vague. How do you measure it? What actions drive it?
Good KPIs are S.M.A.R.T. They link to concrete actions. So your team knows exactly what to do, and what they are doing it for. Otherwise, it’s just wishful thinking. And nothing like a real target.
The Problem: Vague goals mean inconsistent measurement. No clear path to improvement. Teams get confused, work hard but miss targets.
Quick Example: Marketing KPI: "Enhance Social Media." Enhance how? Better: "Boost Instagram engagement 15% in Q2 via polls and Q&As." Actionable. Clear and concise.
5. The "Set It and Forget It" Trap
Chosen your KPIs? Linked them to strategy? Great! But don't stop there. If they just sit on a dashboard, they're useless. I always stress this. KPIs aren't just for show.
They are tools. For continuous improvement. Review them. Discuss them. Most importantly, act on them. Red KPI? What's the plan? Green KPI? How do we replicate that success? No action means KPIs are just digital wallpaper.
The Problem: Insights aren't used. Problems fester. Opportunities are missed. KPIs become stale. All that effort, wasted and a recipe for trouble.
Quick Example: Sales team tracks 'Calls Per Week.' Some reps are low. Data is there. But no meetings. No discussion. No solutions. Performance doesn't change. Data ignored.
by Stuart Kinsey
Stuart Kinsey writes on Key Performance Indicators, Dashboards, Marketing, and Business Strategy. He is a co-founder of SimpleKPI and has worked in creative and analytical services for over 25 years. He believes embracing KPIs and visualizing performance is essential for any organization to thrive and grow.