In today’s dynamic marketplace, leaders are faced with the challenge of meeting rising expectations, improving accountability and strengthening the overall performance of their organization.

To successfully meet these challenges, the organization must first be able to articulate a list of clearly stated and strategic results.  Second, they must define a set of indicators to measure nonprofit impact progress towards achieving each of their goals or results statements.

By measuring nonprofit impact with key performance indicators (KPIs), you can direct and track your efforts against the strategic impact you want to achieve.

KPIs represent the measures of organizational performance critical for success of an organization.  But to be strategic, your indicators must target a measurable change in (1) the knowledge, skills, behavior, life or work of a stakeholder, or group of stakeholders/target audience, (2) the industry or environment in which the stakeholders/target audience live or work, or (3) the fiscal, human or technological ability of the organization to sustain or improve efforts in (1) and (2) above.

“KPI may be a modern buzzword, but the concept is nothing new”, says Brian Szukala, general manager of training at the Freight Transport Association.  “They’ve been around for a long time. But it’s people who make KPIs happen. “

Ten things to remember about using KPIs

  • KPIs should be clearly defined and measurable.
  • KPIs must be adaptable and evolve with any new developments.
  • Inform your staff so they understand why the measures are important.
  • Establish an effective recording mechanism.
  • Check your results at frequent intervals.
  • Provide incentives, and involve staff in setting targets.
  • Establish review dates, and compare current performance with earlier figures.
  • When you discover a problem, make corrections.
  • Keep key participants updated with meetings, the intranet and internal newsletters.
  • Publish regular progress reports.

It takes a lot to change hearts, minds, and attitudes and build a strategic organization – it’s about getting critical mass across the entire organization. The ultimate goal of Key Performance Indicators is to effectively translate strategic intent all the way through to impact you want to have on your market and stakeholders.

©2011The Strategic Organization

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