I spend a lot of time helping clients figure out what to measure and helping them define solid KPI’s but once those KPI’s are deployed organizations often struggle with what the next steps are and, for example, what to do if the KPI’s are indicating a problem.
KPIs are quantitative measurements that help an organization measure progress towards goals and identify areas for improvement. When defined properly, KPIs serve as a useful diagnostic tool to understand which marketing initiatives are working most effectively and which are not.
When trying to identify causes of poor performing KPIs, I typically use a Root Cause Analysis (a.k.a. Fishbone Diagram) approach. The Fishbone Diagram identifies any number of possible causes for a problem. It can be used to initiate a brainstorming session and it is an effective way for groups to sort ideas into categories. These categories can then be labeled as groups of the fishbone. The premise of this methodology is to correlate causes and group them into major categories to identify sources of variation and areas of improvement.
During the Fishbone Diagram analysis, I like to group causes in two categories:
External (i.e. economy, weather, seasons, legislation, etc.)
Internal (i.e. productivity, process, staff, high costs, etc.)
Once I have identified multiple causes of a potential problem and worked with the internal team to group them into external and internal categories, I can help the client develop an improvement plan to take actions to get the identified KPI(s) back on target. Based on the groupings, it will be easy to identify areas that can be addressed quickly and with little effort. It also shows the causes that the team has little control over, which is helpful in creating a plan for improvement.
When working with a client on a KPI improvement plan, it is important to get “buy in” or agreement on the root causes of the problem or problems. It is also critical to establish ownership. When the owner of a given KPI is also responsible for owning an improvement plan that specifies activities, the target is generally easier to achieve. The plan should include a timeframe or deadline as well as the resources required to accomplish the improvement goal.
Using the Root Cause Analysis process enables you to create solid and actionable improvements plans towards achieving your KPI goals.
If you have any additional feedback to share, I would love to hear your thoughts. Also, if you would like more information on how Stratigent can help your organization become truly data-driven, feel free to drop us a line at firstname.lastname@example.org