In Performance Measurement there is always debate around whether your KPIs need to have both quantitative and qualitative measures. Perhaps the first question I should answer is – what’s the difference?
A qualitative KPI is a ‘descriptive’ characteristic – an opinion, a property or a trait. The most common type I have come across is measuring customer or employee satisfaction through surveys. The survey data itself is, of course, quantitative, but the measures are based on a subjective interpretation of a person’s opinions.
A quantitative KPI is a measurable characteristic – really anything that involves numbers. This is the most common type of KPI and covers many things for instance: number of sales, courses attended, consulting days delivered, calls handled, waste, inventory and so much more.
KPIs should provide the most relevant and important performance information to enable organisations to understand whether they are on track towards their strategic goals. If you have goals that are quantitative (improve sales) and qualitative (improve customer satisfaction) your KPIs should reflect this…shouldn’t they?
A problem I come across frequently (and often write about) is that measures, or KPIs, can often be too loosely defined. In Performance Measurement, organisations need to clearly identify the end goals and the path required to get there, then carefully design meaningful measures to assess performance.
The organisations that show the most improvement during Performance Improvement projects clearly understand the measures that are required for learning and improvement. They separate out KPIs that are not relevant to achieving their goals. This avoids distraction, and the danger of ‘data overload’ when too many irrelevant measures are taken.
Determining the meaningful measures is more important than ensuring that a measure is ‘easily counted’. Increased brand awareness may be key to your strategy, so it should be measured. However, the question is not ‘how well known is our brand?’ it is ‘what will happen when my brand is well known?’. By seeking the quantitative goal, these qualitative measures stand up to much more rigorous scrutiny.
In Performance Measurement you need to balance quantitative and qualitative measures to gain a real understanding of performance, but that does not mean that your qualitative measures should be ‘woolly’.
If you need help determining KPIs, get in touch.