Chuck The Geek.com

Key performance indicators for your life

September 10th, 2008 by Chuck Sharp

What’s a KPI?

One of the biggest problems in achieving goals, objectives, and quality standards is tracking progress. In business, how you tell if the company is healthy or not? A feeling? An employee survey? The regularity of paychecks? The P&L statement? What about personal goals, like being financially healthy, or having a good marriage? How do you measure the health of these things?

According to About.com, Key Performance Indicators (KPIs) are “quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization.” They’re basically measurements that help to gauge the success of a given aspect of a business. A good KPI can tell you, at a glance, how you’re doing.

The profit ratio for a company is a KPI in most cases, as it tells you with a single number how the company is doing financially. Interestingly, it doesn’t tell the whole picture. Really, this ratio only tells you how the company performed up to this point. It really tells you nothing about future performance. So, different KPIs might be needed to measure other aspects of performance. Maybe customer satisfaction metrics need to be used, or ratio of customer visits to store purchases. Perhaps just looking at internal operations, like backlog of shipments or time-to-ship or something. There are many many ways to measure performance. Finding the right metric is difficult work. KPIs are almost always business-oriented, that is, they’re designed to judge the health of a business at the overall organizational level.

On a personal level, KPIs can be used to gauge personal success or growth. A really basic KPI for a person’s health might be a heart pulse. Your pulse is a key indicator of you being alive. Of course, this is not too helpful. Another KPI for health might be your Body Mass Indicator (BMI), which is the ratio of height to weight.

The KPI Process

Good application of KPIs seem to follow this process:

1. Define success. Figure out precisely, or at least clearly, what success means to your organization. Paint a clear picture of what success looks like. If you can put numbers in that picture, do so. Measurements are useless if they don’t steer you towards your goals.
2. Define the KPIs. Figure out those key numbers that tell you the most. Profits ratios, sales $$ per store-square-foot, revenue increase, # of sales leads, ratio of positive to negative feedback from customers, whatever. Note, I’m not experienced in creating good business KPIs, so these may not be good ones. The point is to find the fewest, simplest, metrics that are needed to measure success. Also, to repeat, these measures must measure the degree of success defined in step one. Otherwise, the metrics may be True But Useless.
3. Continuously track the KPIs. Kind of obvious, but you must actually take the measurements regularly.
4. Publish the KPIs where appropriate people will see and act on them.
5. Make changes when the KPIs are not where they could or should be.
6. Reward when the KPIs are where you want them.
7. Re-evaluate these KPIs semi-regularly. Are they really measuring what you want? Are they getting “better?” Are they still valid?

Personal KPIs

I’m interested in the concept of Key Performance Indicators for personal use. In other words, how can we use the concept of KPIs for personal benefit? Well, I think the process outlined above can be used. I’ll try to apply it to the area of my health.

1. Define success. For me, success means weighing X number of pounds or less, feeling physically really good (no pains, no discomfort), and having lasting energy through the day. It also includes feeling good about my body and health all-around. Finally, I see being healthy as being strong. My picture of health is pretty clear, but I can’t (and won’t!) lay out all the specifics here. It’s a clear picture in my head though.
2. Define the KPIs. Well, I know that weight, personal sick days, doctor appointments, salads eaten, food portions consumed, caffeine consumed, and minutes of exercise can all be counted. In particular, for me, my weight and minutes of exercise probably are the KPIs. The others will contribute to weight, and for me are directly correlated to weight. I might add a third KPI: a daily quanitified rating of well-being. This is a subjective measurement, but my definition of success has a very subjective element to it. So, if I’m rating my well-being at 10 out of 10, then I’m experiencing success in the health department! I love this stuff.
3. Track the KPIs. Daily, I need to track these. Every morning, after bathroom and just before stepping into the shower, I can weigh myself. At the end of the day, I can add up exercise minutes and rate my well-being for the day.
4. Publish the KPIs. I can keep all of this in a journal or spreadsheet, and I can see trends over time. In particular, I can see over a week how I’m doing. Since it’s just me, no publishing is needed, unless others are holding me accountable (not a bad idea).
5. Make necessary changes. Seeing my weight first thing is particularly motivating. If it disgusts me, I have the whole day ahead to adjust my food intake. It gives me a reason to exercise. If I actually like what I see on the scale, I have the motivation to continue eating smaller portions and keep the weight off. Rating my welll-being and tracking exercise minutes allows me to plan better in the future — when and how to exercise, what I need to do to feel better, etc. I could also put dollars in the jar until I meet a KPI goal.
6. Reward good news. When I’m doing well, I can reward that. It’s very much self-motivating (I look good, yeah!), and I can give myself treats for continued progress and success. Maybe a present to self (I love those), or maybe I get to spend those dollars in the jar. Who knows? This is the fun part.
7. Finally, revisit the system. Occasionally, I’ll have to ask whether or not this system is still serving me. After all, this is practical stuff. When it stops being useful, it must be changed.

You could apply this in any area of your life. I heard recently that the greatest measurement of marriage success is the ratio of positive to negative words spoken between spouses. I don’t know, you could track hugs, kisses, and smiles too. What about spiritually? As a Christian, I know that two of the most important things I can and must do for my spiritual well-being is prayer and bible study. Obvious KPIs there are number of minutes spent doing either. There are KPIs for your work too. What are your most valuable and important tasks? How many hours a week do you do those?

This may seem contrived, mechanical, and unnatural. However, research and experience suggests that measuring progress is one of the most sure ways of achieving progress. We all have standards of quality that we want to achieve and maintain in these areas of our lives. Why not make the process more objective, even simpler? What are your KPIs?

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