Set KPIs first to transform your strategy and performance

What if a simple shift in your planning process could transform your strategy and deliver greater impact – without any additional cost?

What comes first – KPIs or action plans?

Traditionally, organizations:

1. set their strategic goals
2. develop the action plan
3. define KPIs to measure results

At PuMP® we strongly recommend a different sequence:

1. set strategic goals
2. define KPIs
3. develop an action plan

So we say – start with KPIs, before action plans. WHY?

Because starting with KPIs shifts your focus from activities to measurable results. This approach brings clarity and alignment to your organization, ensuring that every action taken is directly linked to achieving your strategic goals.

Here’s how this leads to strategic transformation:

1. You gain clarity on success metrics: Defining KPIs first clarifies what success looks like for your organization. This transforms vague objectives into specific, measurable results / targets, making your strategy more focused and actionable.
2. You get aligned and purpose-driven actions: With clear KPIs, your action plans are designed specifically to achieve these measurable outcomes. This alignment ensures that all efforts are purpose-driven and strategically relevant.
3. You efficiently use your resources: Focusing on KPIs helps you allocate resources only to activities that impact your key measures of success. This transforms your resource management by eliminating waste and maximizing ROI.
4. You can make better decisions: KPIs provide objective evidence of progress, allowing for data-driven decisions. This transforms your leadership approach, enabling you to adjust strategies proactively based on real-time insights.
5. You gain competitive advantage: A KPI-focused strategy keeps you ahead of industry trends and competitor actions by constantly measuring and improving what matters most. This transforms your market position and drives sustained success.

Here is an example, from the haute couture industry (hence the dramatic image above)

Consider the luxury fashion world, where clients purchase high-end garments for two, quite different, main reasons:

• Artistic value: Appreciation for beautiful and innovative designs.
• Prestige and status: The recognition that comes with wearing the brand.

Suppose your strategic goal is to emphasize artistic value. Imagine what needs to take place for you to be sure that you are objectively achieving your goal – and that specific outcome is the foundation for your KPIs tailored for this goal. By identifying those unique KPIs, you transform your strategy from a general aim into a focused mission, with measurable outcomes. This clarity allows you to develop action plans that will promote your desired outcome, while ensuring a clear understanding of what needs to take place to achieve your goal.

So why do KPIs come first?

By identifying the specific results you aim to achieve, you can:

• Design targeted action plans: Your actions are crafted to influence your KPIs directly, transforming random activities into strategic initiatives.
• Avoid wasted effort: Resources are allocated efficiently, transforming your operational effectiveness.
• Measure and adapt: Continuous monitoring of KPIs allows for agile strategy adjustments, transforming how you respond to challenges and opportunities.

The risk of doing it the other way around

If you begin with an action plan before defining KPIs, you risk:

• Misalignment: Actions may not lead to the desired strategic outcomes, stalling transformation.
• Inefficiency: Time and resources could be wasted on low-impact initiatives, hindering growth.
• Uncertainty: Without clear KPIs, you lack the feedback needed to steer your strategy effectively, preventing transformation.

The importance of meaningful KPIs

At PuMP®, we believe KPIs must be tailored to your specific and current business goals. Meaningful KPIs are identifying by using a structured process to ensure they deliver the maximum impact metrics are capable of producing. Impactful KPIs cannot be produced by using brainstorming or treated as one-size-fits-all templates.

How do we know we have “maximum impact” that meaningful KPIs are capable of producing? They will:

• Provide relevant insights: Tailored measures reflect your unique goals and challenges, transforming data into actionable intelligence.
• Facilitate meaningful targets: Establishing targets based on your context transforms goal-setting from arbitrary numbers into achievable objectives. (And saves you and your teams the frustration of chasing targets plucked out of the thin air.)
• Enhance team engagement: When KPIs are relevant, teams are more motivated, transforming organizational culture and performance.

The bottom line

Defining KPIs before creating an action plan isn’t just about rearranging steps—it transforms your entire business strategy. By clarifying what you need to achieve and how to measure it, you shift from activity-based planning to results-driven strategy.

The best part? This simple change in your planning process costs nothing to implement but delivers all these transformative benefits!

What about you?

Have you considered setting KPIs before your action plans? I’d love to hear your thoughts and experiences with this transformative approach!