How to develop key performance indicators is very important process to learn as a manager as you are creating a tool to help you effectively manage more people, bigger projects, and more complexity without being overwhelmed. 

 How you use KPIs will help you drive the right behaviours and activities which in turns drives better results.

 Many managers have not been taught how to develop relevant, targeted KPIs which support your efforts to encourage and drive results with the team. I am sharing the six steps that I use in how to develop KPIs to help manage and work out what actions to take to improve performance of a project, department or business.

 Firstly, when developing key performance indicators, start with the goals of the business (Strategy), or the goals of the function or team you work in. The key performance indicators must align with and support these goals.

 Using KPIs creates focus the team’s effort of the actions and activity that drives the KPIs you develop. It is really important that their behaviour and focus work towards the goals rather than create confusion and wasted effort. 

 Secondly, when planning how to develop key performance indicators, try to define the questions that you need answering. Once you have your goal agreed, written down and circulated, plan how you are going to reach that goal(s). What is going to make the most difference to the success and failure of the project? Identifying these activities helps hugely in selecting the best key performance indicators (kpis). 

 Third, working out what data you need to capture and collate to track the KPIs you have selected is very important. Ideally the data needs to be quick and easy to put together and preferably automated. Data remains a very practical consideration in how to develop KPIs for a business or how to develop kpis for a project. 

 Fourth, Create ownership of the KPIs. Unless you want to be putting all the KPIs together (not recommended) you will need to ask team members to own each KPI and report on them. Plus you want those people to be championing the actions to improve those KPIs. Create ownership to do this. 

 Fifth, build lots of visibility around the key performance indicators. Team performance tracking, measuring employee performance and similar measures need visibility of the KPIs to drive accountability in individuals and teams. Make the time to discuss KPIs in the team. Plan the steps to take to improve the results the KPIs are showing. 

 Sixth, when using KPIs interpreting the results those KPIs are telling you and taking the right action to improve those results is critical to make having the KPIs valuable. 

 Work through each of these steps and you will have very useful relevant KPIs that drive into the heart of the activity you need to undertake for success.