Personal KPIs. Selecting them, monitoring them, etc. I would be curious to hear your ideas on this as this is something that I’m actively working on for myself.
The MBA Responds…
Thanks for the great question, anonymous reader! This topic is quite timely and is an extension of my previous post about setting yourself up for success (see here).
So, what are KPIs? KPI stands for Key Performance Indicators – industry jargon for measuring and monitoring the metrics that matter the most. Wikipedia says it best – “KPIs are commonly used by an organization to evaluate its success or the success of a particular activity in which it is engaged.” Given their significance and reliance on monitoring important things (e.g., goals and success), it is extremely important to understand how to select the metrics, measure the metrics, and monitor the metrics – whether using them for personal or professional use. The following provides a prescriptive approach to defining Personal KPIs, but can also be applied in professional settings as well.
1. What matter’s most? In order to get to the right metrics, you’ve got to first identify what’s the absolute, most important thing to you in life. If you were standing at the end of your life and looked back, what is it you would want the ‘End of Life You’ to say about your life? From my previous post, this would be your life’s BHAG (see here)!
2. It’s a balancing act. Armed with life’s BHAG, take some time and try to understand the variables of the BHAG equation. For example, suppose your personal goal is to “Be a Good Person”, examples of variables to include in that equation could be => Be a Good Person = Health + Family + Career + Giving. However, given that time is a limited resource for humans, you’ve got to prioritize the variables – this can be done by assigning weights to each variable. Therefore, our formula could be revised to => Be a Good Person = (25%) Health + (35%) Family + (15%) Career + (25%) Giving. In layman terms, our weighted variables in the formula say, Family is the most important variable that will make you a good person, followed by Health and Giving, and finally Career. Remember, life is all about tradeoffs (see here)!
3. Let’s do this. The next step in the process is to identify each variable’s primary activities that help achieve your life’s BHAG. For example, let’s take the easiest variable, Health. Before you define the specific activities you are going to do, take the time, once again, to think about why Health is a key variable in your life BHAG equation. In order to be a good person, one might argue that it is important to have minimal stress. Continuing the logic, in order to minimize stress, one might say being fit and maintaining a healthy weight are key contributors. Finally, being fit and maintaining a healthy weight are achieved by exercise (BINGO!).
4. Mr. President, the leading indicators say… So, you are probably thinking where are we going with all of this. Well, now that we have our formula for our life’s BHAG and the key activities for each weighted variable, the next step is to identify what we are going to measure. When selecting your metrics, opt for metrics that are: (1) easy to measure, (2) quick to track, and (3) most importantly, leading indicators and not lagging ones (see here for definitions). Following our example, exercise leads to good health which contributes to being a good person; therefore, you should be thinking of measuring things like (1) # of Cardio Workouts per week, (2) # of Weight Workouts per week, (3) # of Yoga Sessions per week, etc.
5. Keep score! Armed with our Personal KPIs, it’s time to keep score! First step in keeping score, is to set targets. Therefore, take each metric identified in Step 4 and set a target/goal for each one. Next, monitor each metric (frequency defined by the metric) and assess against the defined target/goal. Take pride in your accomplishments but also be critical of your failures. Adjust accordingly and repeat the 5 steps as needed!
As always, I hope this answered your question, anonymous reader and look forward to your feedbacks, comments, and further questions!