It’s All About RELEVANCE— A Broad Introduction to KPIs

To achieve your goals in the Age of Information, there are few principles more vital than that of Relevance.

For our purposes, Relevance is: the ability to sift out the circumstances, variables, possibilities, and data that do not give insight into the progress of your goals, in order to make a decision that will achieve those goals based on what matters, and nothing else.

In the last half-century technology has given us access to monumental amounts of information as quickly as we want it. Radio and television were the first widely used mediums of information that broke the limitations of proximity. Before long computers were used to parse and extrapolate data, delivering new insights on whatever input the user provided. And finally, the Internet matched the achievements of radio, television, and computing, as well as gave the world a platform to effortlessly share its wealth of knowledge. From an information standpoint, society has bit off way more than it can chew; the foundation of Relevance is knowing what to spit out.

And while the broad subject of Goals (“What should my goals be?”), Relevance (“What affects the achievement of my goals?”), Limitations (“What prevents me from achieving my goals”), and Foundations for Achievement (“What are the methods of execution?”) are important for every individual who has goals, our discussion about Relevance thus far has been a precursor to the central topic of this post: Key Performance Indicators (KPIs).

A Key Performance Indicator is a super-concentrated piece of information that delivers maximum insight into the progress of your goals. In other words, Key Performance Indicators are the most Relevant factors in your decision making progress. If you have specific and clear goals for your business, then Key Performance Indicators do exist for those goals, whether you’ve been using them or not.

The concept of using KPIs has grown tremendously in the realm of Web Analytics, where mounds of Internet information is available and reported to website owners that are interested in how people use their website. Working for a company whose primary sales channel is the Internet, I am VERY interested in how people use our website. No surprise that I was introduced to the concept of KPIs by the works of Web Analytics Guru, Eric T. Peterson. If you have a website, intend to have a website, or like the idea of having a website I STRONGLY encourage you to read Peterson’s set of Web Analytics and KPI books.

Of course, even brick-and-mortar businesses should recognize the tremendous value of the KPI/Relevance philosophy. If you want to save time, react quickly to problems, identify channels for increased success, and make smart decisions, then you are interested in the principle of Relevance. Focus on the concentrated pieces of information that help you achieve your goals, keep that information readily available, and use it to drive your business decisions.

I’ll leave you with a line from Eric T. Peterson’s Big Book of Key Performance Indicators,

“Any KPI that, when it changes suddenly and unexpectedly does not inspire someone to send an email, pick up the phone or take a quick walk to find help, is not a KPI worth reporting.”