How to set up targets for our KPIs?
As leaders what we should focus on, is setting fair, doable but challenging targets so that we move forward based on the strategy map of our organization.
For setting individual and department targets, consider the following steps:
1. You should know where you are now. What is the current number of the specific KPI?
2. Where would you like to be in the next 12 months or even more? That is exactly your target.
3. Where would you like to be in 2 to 3 years? That is your enhanced target.
4. All departments have either internal or external customers/clients. Set your target based on the expectation of your client. They should be always satisfied and even sometimes surprised by our results!
5. Communicate the targets with your people. Try to get them on board. Explain them what is in it for them? You can read my article about "Leadership or Dealership" to get some more ideas!
6. Explain the reason of defining KPIs and define solutions for improving them.
If you set your team targets shallow, you never create a challenge for your team members. Basically, you never get the chance of improvement and developing them and eventually you won't be able to evaluate them properly.
If you set the targets too much difficult, you will make your people disappointed and demotivated. They may try really hard but they will never reach to the destination and then they never consider you as a leader but they find you as a boss who is ordering them impossible things to do.
There are some positions that we barely can define a challenge in their daily job. For example if an assistant of a department should check and close all attendance or finance issues of the department at the end of each month we can only ask him/her about accuracy, on time closing and minimizing mistakes but this is not a real challenge! Is it?
The solution for such a case is actually creating a challenge for that person. For instance we can allocate few responsibilities of other senior members to the assistant not as a real job but as a chance to get developed. Everyone has a chance to be promoted and if we would like to create such an opportunity for our people, we should measure the improvement objectively.
Or we can create small projects for them to improve some parts of team jobs and by participating in such a project they learn how to improve their activities.
Anyway, please don't forget this famous quote: "As long as you can't measure a process you can't manage it ever!"