The KPI Visual is a summary that compares an actual value to a target value, together with the percentage variance. It displays in red when below target, and in green when above target. The background shows the trend of the actual value over time.
The KPI visual
requires two values, a target and actual value, plus a time interval. These three
values mean you have to be clear about how to:
- Express your goal as a single number.
- Measure on-going progress.
- Have a system to record accurate data.
Although simple,
these values go to the heart of a goal, and how you intend to achieve it.
Many different
numbers may contribute to achieving the goal, but you must choose the one which best
represents the target. Jim Collins would argue that being able to simplify
complexity into a single number is a leadership skill that unifies people, and
guides decisions. In his book, Good to Great, he talks of choosing the right economic
denominator to drive profitability. The concept is the same as distilling a
destination, or goal, into a single metric that can be tracked. Collins is not
the only fan of headline numbers, John Doerr in Measure what Matters makes the
case for clear goals with clear metrics. Marissa Mayer famously said, “It’s not
a key result unless it has a number.”
That so many
great minds have felt the need to say anything at all indicates that this is
neither obvious nor easy.
Having decided
on what you will measure, the question of how to measure arises. Again, not
obvious nor without its pitfalls. Can it be measured automatically, using IOT perhaps
from a production line or a smart phone? If not, do people have to input the
data, in which case how accurate will it be, and how onerous on those that have
to do this work? Unless the process is made super easy, estimating, sloppy categorising,
and all sorts of other shortcuts get taken. Including the final shortcut – not recording
the data.
All of these
things happen, all too commonly simply because people are already busy with the
job they were hired to do.
Antoine de
Saint-Exupery said, apparently, that “A goal without a plan is just a wish.” Many
others have pointed out that “the road to hell is paved with good intentions.” Both
pointing out that just setting a goal is insufficient, regardless of the talent
or motivation of those setting the goal.
Hitting difficult
goals is more about planning, monitoring, and adjusting actions accordingly. In
other words, behind every serious goal is a system for monitoring progress. Once
you have that, you have a very real possibility of putting meaningful numbers into
the KPI visual.
The good news is
that you may well have several systems that already contain the information you
need. Most companies have data in databases and spreadsheets, some of which can
be used to develop and monitor your KPIs. Or you may need to adapt or add a new
system.
Power BI has
enormous flexibility in allowing you to use data from various sources and
manipulate it into something you can use. And once you’ve done that, you have a
meaningful KPI that can be communicated to stakeholders.
If you’ve looked
at the KPI visual and decided it’s not for you for any reason, think again. It’s
simplicity is its power, and the hard work required to get the data it needs
will be repaid many times over.
If you’d like to find out more about using your existing data to report on KPIs or other reporting, get in touch.
