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How to Write KPIs - 4 Step Approach

by Maddy Mirkovic, on Jun 5, 2019 8:38:00 AM

KPIs are a necessary component of managing any business, whether public, private, or non-profit. This is because KPIs allow you to determine whether you're behind, on track, ahead, or have achieved your strategic objectives. This article will show you how to measure progress on your strategic plan by creating great KPIs.

This article is part of our mini-series 'How To Write A Strategic Plan: The Cascade Model'. You can download our free 'How To Write A Strategic Plan: The Cascade Model' eBook which contains all of the articles from the series below:

Download eBook: How To Write A Strategic Plan

Your complete guide to writing a great strategic plan. The eBook will walk you through every step in the process from an inspiring Vision, through to your KPIs and Projects.

Download eBook

You can also find the individual articles here:

  1. How To Write A Strategic Plan: The Cascade Model 
  2. How to Write a Good Vision Statement
  3. How To Create Company Values
  4. Creating Strategic Focus Areas 
  5. How To Write Strategic Objectives
  6. How To Create Effective Projects
  7. How To Write KPIs (This Article)

As always, here's a quick recap of the Cascade Strategy Model and how this post fits into the bigger picture.


Writing KPIs - The 4 Step Approach

Possessing knowledge on how to write KPIs is extremely valuable for any business professional. So, if you need a hand to get going, follow our 4 step approach to writing KPIs:

  1. Determine strategic objectives
  2. Define success
  3. Decide on measurement
  4. Write your SMART KPIs

NOTE: At this point, I should mention that when I use the term 'strategic objectives' in this article, I'm referring to the purpose of your actions. While some may argue that this should be called a goal or an initiative rather than an objective, I would argue that the terminology is not as important as the concepts they represent. As long as the concept behind each term is well understood in your organization, there is no reason to change your terminology (even if your terminology doesn't match that of our post - as long as the concepts do).


Tip: Don't copy your KPIs straight from someone else's list!

While there's a wealth of KPI examples available online - scrolling through industry lists, picking out a KPI and attempting to force it into your strategy won't do you any favors.


Well, KPIs should be developed to contribute to achieving a specific strategic objective. If they're not developed with a specific strategic objective in mind, they run the risk of stealing attention, time, and money from KPIs that actually help to achieve strategic objectives. The best KPIs for YOUR business are designed by starting with YOUR specific business objectives. Now, this is not to say all the content available on KPI examples is useless, because it's definitely not - it's actually an important resource. But, looking through KPI examples shouldn't begin till AFTER you have determined your key strategic objectives.

Alternative vs Value-Based Decision-Making

To get a better understanding of why you should always start the KPI process by having first defined strategic objectives, consider the two potential ways of deriving your KPIs:

  • Alternative-based decision-making
  • Value-based decision-making

Alternative-based decision-making relies on choosing your preferred option from the alternatives offered.


Decision maker: I would like a coffee

Waiter: Sure, what milk would you like?

Decision maker: What do you have?

Waiter: We have full cream, skim, or soy milk?

Decision maker: I'll take the full cream milk.

Value-based decision-making relies on assessing what matters most to you and then making a decision that meets your needs.


Decision maker: I would like a coffee

Waiter: Sure, what milk would you like?

Decision maker: (Considers objectives: I like a good tasting coffee, but also want to keep the fat content down because I'm watching my weight) I'll take soy milk with one serve of artificial sweetener.

Waiter: No problem.

As you can see, the decision maker in the first example listened to the alternatives presented and then selected their preference based on the options given. However, the decision maker in the second example examined their objectives and what they really wanted from a cup of coffee first, and then made a decision which met their needs.

When writing KPIs, using the alternative based approach and scrolling through industry KPI lists will leave you with your preferred KPI from that list, but achieving that KPI won't necessarily mean you've achieved your strategic objectives. On the other hand, using the value-based approach and considering your key strategic objectives first will ensure you end up with KPIs that once achieved, will mean you've also achieved your strategic objectives.

How to Write KPIs - 4 Step Approach

Your organization's business model, industry, and even the department in which you operate will have an impact on the type of KPI you need. Luckily, we've devised a best practice process for how to write KPIs that will allow you to create the perfect KPIs every time.

Step 1 - Determine the Key Strategic Objectives

Before writing KPIs, you'll first need to determine which of your organization's strategic objectives you're trying to gauge. If you've been following along our mini series "How To Write A Strategic Plan: The Cascade Model' then you will have already defined some strategic objectives for your organization, and you're ready to create some KPIs.

If you haven't defined any strategic objectives for your organization yet, check out this article first and then jump back over here to create your KPIs.

E.g. Objective: Increase the flow of the marketing pipeline.

Step 2 - Define Success

Now that you've identified your strategic objectives, you'll need to begin thinking about what the success of each objective looks like. Sticking with the same example used in Step 1, if my objective is to increase the flow of the marketing pipeline, the success of this objective means increasing the number of contacts that enter the pipeline, and increasing the number of contacts that pass through the end of the pipeline and get handed over to Sales. By first defining what success looks like, deciding how you will measure the success of your objective becomes a lot easier.

When defining the success of your KPI, you will usually find there are multiple parts to the definition of your objectives success. In the example used above, we found there were two parts to achieving success of our objective -

  1. Increasing the number of contacts that enter the pipeline.
  2. Increasing the number of contacts that pass through the end of the pipeline and get handed over to Sales.

As mentioned earlier, this is the time when it might be useful to look through a few KPI examples to help get some inspiration for how you can define the success of your key business objectives. Again, you should avoid copying KPIs straight from a list, as, chances are, they won't perfectly fit your strategic objectives. Instead, use the KPI examples as a way to ideate how you can measure the success of your own strategic objectives.

We've collated a whole bunch of KPI examples already and grouped them by the department to help give you a little inspiration:

  1. Sales KPIs
  2. Marketing KPIs
  3. Financial KPIs
  4. HR KPIs
  5. Customer Service KPIs
  6. Health & Safety KPIs
  7. IT KPIs
  8. Change Management KPIs

Step 3 - Decide on measurement

Next, you'll need to decide how you will actually measure success. Going back to our example once again, we've identified that the success of our objective means increasing the number of contacts that enter our pipeline AND increasing the number of contacts that pass through the end of our pipeline. 

Let's start with the first part of this - Increasing the number of contacts that enter our pipeline. Contacts enter our marketing pipeline when they subscribe to our mailing list or exchange their details for content for the first time. When contacts engage in either activity, they automatically get added to our marketing automation platform as a subscriber. Using the number of new subscribers added to our marketing automation platform over a time period is an easy way for us to measure the number of contacts entering our marketing pipeline.

Now let's look at the second part - Increasing the number of contacts that pass through the end of our marketing pipeline. Contacts pass through the end of the marketing pipeline when they're ready to be handed over to our Sales Team. We use the term "SQL" (Sales Qualified Lead) to define a lead that has moved through the end of our marketing pipeline and is ready for our Sales Team to pick up. Our marketing automation platform adds a tag on each contact profile to identify which life-cycle stage they are in based on certain activity. Again, through our marketing automation software, we can use the number of contacts who become a SQL in a given time period to measure our success.

This is where it might be wise to start considering dashboard software to track and display your KPIs. You'll likely use various platforms and tools across your business to measure your KPIs, but having a central location to track and view all your departmental and organizational KPIs will ensure you have a clear view of your success. Cascade's Dashboard tool is extremely powerful and allows you to pull data from all around your business, so you can display your most important information, real time, to whoever in your organization needs it.

Step 4 - Write your KPIs

Finally, it's time to begin actually writing your KPIs. KPIs should follow the SMART format (specific, measurable, attainable, relevant, and time-bound), to ensure your KPIs meet this criterion, we've devised a formula that you can follow to ensure you end up with SMART KPIs every time. The main advice here is to keep things simple. KPIs should be understood by everyone within the organization. That means no jargon (if possible), and keeping them to one sentence long.

We suggest a structure as follows:

Action + Detail + ValueUnit + Deadline

Putting it all together, our KPIs may look something like this:

Example 1

Increase new HubSpot lead profiles to 40,000 people by 31st December 2019

Example 2

Increase new SQL profiles to 20,000 people by 31st December 2019

Starting off with a verb forces you to be specific about what you’re trying to do. A metric and unit ensure your KPI is measurable and a deadline will do wonders for staying timely on your progress.

Download eBook: How To Write A Strategic Plan

Your complete guide to writing a great strategic plan. The eBook will walk you through every step in the process from an inspiring Vision, through to your KPIs and Projects.

Download eBook


Cascade does a great job helping write KPIs this way with it's goal designer (See screenshot below)

Following our 4 step method on 'How to Write a KPI' will help you create great KPIs for your organization. As always, let us know what you think of our process and if it's helped you create KPIs for your organization by commenting below or jumping on one of our social channels!

Topics:Cascading & Engaging People With StrategyKPIs


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