Quantifying your business’ performance through key performance indicators (KPIs) is the best way to measure progress, growth, and, ultimately, success. However, choosing the right KPIs comes with a number of challenges and hidden traps.
It’s quite easy to choose the wrong KPIs to focus on and track the incorrect metrics. Yet, even a very simple strategy can help set you on the right path and decide on the KPIs that matter the most for your business.
In this article, we’ll introduce you to the Results-Orientated KPI System (ROKS®) and teach you how to implement effective KPIs as reliably as possible.
What is ROKS®?
The ROKS® approach is a tried-and-true method for developing KPIs. The process consists of only seven steps that help identify the core outcomes an organization is looking for. Once the core outcomes are determined, the ROKS® method is used to break down the outcomes into two different levels of detail and, ultimately, identify the KPIs related to those results.
Here are the seven steps to developing the ROKS® methodology for your company’s needs.
1. Define a Clear Strategy
Before getting to KPIs, you need to define a clear strategy. Decide on what your company is trying to achieve and identify strategic objectives. Then, consider where and how your KPIs will be used.
Once your company has a defined strategy, it can assess the current situation and gather the right people to develop KPIs. To do so, it is necessary to identify the key stakeholders, develop a communications plan, determine how to involve the stakeholders, and keep track of the involvement.
3. Longlist KPIs
The ROKS® method separates KPI selection into two stages. The first stage includes designing ‘KPI Trees’ to create a long list of company KPIs. In other words, this step entails developing a full model of all the potential KPIs without worrying about how important or practical those measures are or how long the list is.
4. Shortlist KPIs
The second stage of KPI selection includes reducing the longlist to a manageable size. The bullet-proof way to do so is by documenting why each KPI should be implemented and even listing why the KPI was left out ultimately.
5. Define KPIs
To define a KPI, it is necessary to write down vital information regarding it, such as which data is used, precise calculations, what is or is not included in the data, etc.
It is of utmost importance to complete this step. Otherwise, the entire strategy could fail. Defining KPIs allows your company to record all the critical aspects of its KPIs in a clear, logical, and readable way.
Prior to fully releasing the KPIs, it is necessary to design and test dashboards and reports. The best strategy to approach this step is by creating ‘mockups’ of the reports, getting sign-off on fully reviewed prototypes, and building the working versions.
7. Go Live
The last step in the ROKS® method is going out. Once your company completes all the previous steps, it is ready to start implementing the KPIs daily. Keep in mind that it is essential to map the KPI process and always seek user feedback and tweaks during the nursery period.
Interested to learn more about ROKS®?
Watch our online seminar with Bernie Smith, the man behind the ROKS® methodology:
At HICO-Group, we implement industry-leading best practices to help you discover where your business can be improved with state-of-the-art BI concepts. By utilizing ROKS®, we help you drive measurable performance improvements for your business.
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