How to Do a KPI Audit (Video)

Now that the dust has settled from Annual Planning, many of my clients are focused on auditing their list of KPIs. So, how do you know what to keep and what to toss? How do you know where your holes are? Here are a few test questions to take you through the process.

First, it's important to understand the objective for the exercise: To create a uniform set of KPIs that provides an early warning system so you can make adjustments weekly and stay on track to to achieve Green results.

Next, take your current list of KPIs (no matter how large) and run each one through this series of tests:

- Why do we care? Does it trigger an adjustment or give us an important insight? If the answer is no, toss it.

- Who owns it? (The person accountable for the number itself should status it weekly!)

- Is it a leading or lagging indicator? Does it help you look down the road (leading) or in the KPI's down the road rear view mirror (lagging)?

- Can we measure it now with the data and systems we have? If not, how/when?

- What Rockefeller Habits category does it fit into? (The categories are Customers, Employees, Shareholders, Make/Buy/Deliver, Sales or Record Keeping.) Each category should include a good mix of both leading and lagging indicators.

- Should it live on the Company or a Group dashboard? Think of which team should be discussing it at their weekly meeting. The goal is to have no more than 12-15 high-level KPIs at the Company level. KPI sets are slightly larger the deeper you go in an organization.

- What is the Action Plan for each if it goes Yellow/Red? It's much easier to think of this now, before you are in crisis. (Put this information in the Notes section in Rhythm on each KPI.)

Once you cycle through your current list, look for your holes. Do you only have results indicators in the Customer category, for example?

Now that you have a solid set of KPIs, status and review them weekly as a team. Work with your team to make the needed adjustments to stay on track to Green.