The Path to Aligned Project KPIs
Many organizations are often wondering what are the top KPIs tracked today within project management offices, but what they really should be asking is how can I align my project KPIs to the overall strategic business goals.
A common theme seen within organizations is that they are tracking project KPIs, but that those project KPIs don’t actually have too much meaning to the key strategies of the company. This should be a red flag that your project KPIs aren’t strategically aligned with business goals and initiatives.
The negative effects of this misalignment could include:
- Stalled Growth: When organizations misfire due to misalignment, initiatives required to support and sustain profitable growth get into trouble. Unfortunately, spotting these symptoms is difficult in situations where standardizations is already lax or missing altogether.
- Missed financial projections: The root cause of this is often because projects are executed without alignment to overall enterprise strategies. As deadlines for those projects aren’t met within operations due to unrelated activity occurring in the environment, product launches or services lines can be delayed - directly impacting projected revenue.
- Decreased Revenue/Profitability: An organization’s wallet will ultimately be impacted by a chaotic project management execution related to strategy misalignment. Revenue decreases can occur for a variety of reasons, but most will trace back to the overall misalignment of those projects.
If any of the above sound familiar to you don’t fret! Here is an easy path to follow to ensure that your projects KPIs are aligned with business needs.
- Identify Business Needs - This step may be confusing because it’s essentially starting from the end. Start with the end goals of the organization and define the KPIs that align with those goals. Confirm what will be needed to be tracked against those goals and confirm calculations to meet those needs. By defining these goals, organizations will have a clear example of what they want to see and will just need to connect the dots of how to get there.
- Create Actionable Plan - Using those end business goals, identify where you are and fill in the gap with a plan of how to get there. Understand what you can obtain today and what might be missing. By identifying that gap, you’ll be able to create an actionable plan on what it’s going to take to get you there.
- Confirm/Update View - It’s important to understand in the end what kind of visibility you want to have and how you’d like to see that information - a chart, graph, table. Also, what’s going to be the best way to analyze that information to determine positive and negative trends.
- Gain Executive and Team Buy-In - Getting executive level sponsorship of this type of initiative is usually pretty easy, but team buy-in can be more challenging. Going from not doing any sort of time tracking to wanting to implement that can be difficult, but explaining the benefits they’ll see on the other end that will make their lives easier will help enforce.
- Communicate the Plan - Ensure consensus on how to achieve goals and where to go to see progress. Communication is key in making this transition a success.
- Check-In and Follow Up - Keep the process fluid. Continuously review and approve - just because you roll it out in 3 months doesn’t mean it won’t need a change. Adapting the strategy behind those KPIs to your business goals will be an on-going project, but will guarantee the alignment to guarantee success.
In summary, the consequences of strategic misalignment from project KPIs to the overall business initiatives can be detrimental. Use the path to alignment (above) to ensure you avoid unnecessary spending on projects that won’t benefit the entire organization and the strategic goals or initiatives in place. When organizations are aligned strategically throughout the entire organization, they have the ability to increase growth, optimize revenue and ultimately connect the organization with the same goals so everyone is fighting for and planning for the same ending!
For more information about aligning project KPIs - check out this Metrics that Matter webinar!