Are KPIs important for your business?

“I’ve got the key, I’ve got the secret, I’ve got the key to another way” – Urban Cookie Collective circa 1993 – no you’re old.

Anyway, I’ve got a key, one of many keys which make up success. It’s one of what I call the Laws of Success. Ok, let’s get a couple of things straight. One, I am not a business coach or your life coach and I don’t want to be either. Two, I’m a business lawyer so I’m going outside of my allocated pigeon-hole in writing this. Three, adopting this one philosophy may not change your life completely, but it sure will be a good start. Four, everyone’s definition of success is (and should be) different.

Peter Drucker, the world renowned business management guru’s, was the one of the first to write “what is measured is managed, and what is managed gets improved”. And so, in business, Key Performance Indicators (KPIs) have been a mainstay for the last few decades, as tools used to measure a wide range of vital business objectives. At a basic level, a business might have KPIs for things like: number of new clients, sales revenue, satisfaction scores. Boring spreadsheet stuff really, but a way in which managers can objectively compare staff and a method to see how units, teams or the whole company is performing.

KPIs are great in business.

When you set up in business (one assumes, dear reader, that you are self-employed or running your own business), my guess is that you did so for one of a few reasons. It may have been to ‘make a difference’ to a community (or just to ‘make money’), but it was most likely because you wanted independence, autonomy and to make a legacy for you and your family.

How do you know if you have succeeded?

This is where personal KPIs come into play. You should consider some of the following questions:

1. What is your desired outcome?

2. Why does that matter?

3. How will you measure progress?

4. How often will you review progress?

For me, my desired outcomes revolve around spending time with my family, doing the school run, having time for lunch with my wife during the week, and spending more time on hobbies. For you, your personal KPIs may be relationship-driven, fitness-driven, relaxation-driven.

As well as my business KPIs (which let's face it for a lawyer involve cash), I have personal KPIs and for me – and this is the key – they are more important to hit than the business ones. Sure, we all need to hit the business KPIs to pay bills, earn money, do stuff – I get that. But the real key to success is hitting the personal ones, and I’ve got a laser focus to ensure I achieve mine. Do you?

I therefore incorporate the personal KPIs into my business plan, after all the business is meant to work for me. So if I cannot do a couple of school runs in a week, then I’m not performing at running a business; in the same way that if an employee wasn’t hitting their billing targets their manager would ‘have a word’ to see what could be done, I take a look at what I’m doing and readjust so that I can achieve the desired outcomes.

The second question – the why – is crucial. There’s no point in having a personal KPI without a strong why behind it, because you’ll just miss it, something else will be more important or which takes away your attention. With a strong why, you’ll make sure you hit your personal KPIs each and every time – or try your best at least.

Measuring progress and reviewing that progress is also important. It’s a balance, of course. Few of us can have a personal KPI which says “I want to spend 6 days a week doing my hobby” unless you’re already a multi-millionaire with loads of income generating assets. No, sadly, most of us have to work hard to enjoy some perks. But if you don’t measure your performance with the things that you’re saying matter most, then you will never achieve them.

But these personal KPIs are so important – or should be – that you simply cannot afford to ignore them, not have them, or think that you can only have them “once I’ve made it” or “once the business is more steady” or “as soon as….”, because we all know there’s always something else. Indeed, the real key to success is to build them into your life now, not at retirement, so that you can really enjoy life.

“No one ever said on their deathbed ‘I wish I’d spent more time at work’”

This old adage is another way of saying ‘I wish I had hit my personal KPIs’. Because the bottom line is this: having personal KPIs, and hitting them, is a big key to success. Not hitting them, or worse still not having them, is the road to regret on your deathbed.

So the Law of Success is this: have personal KPIs in all areas of your life because without them you won’t know if you’re a success.