I’m a big believer in working hard while working smart. Measuring hard work is easy, but measuring smart work—analyzing the actual impact of your performance—requires two steps:
1. Identify Key Business Requirements (KBRs)
Before measuring anything, take some time to identify the reason for doing what you are doing. Ask yourself the fundamental question, “What is the sole purpose of this project?” – the answer you get will be your Key Business Requirements or KBRs.
Let’s look at some examples:
- The KBR of a car is to transport you safely to your destination in time.
- The KBR of an e-commerce website is to get people to buy more goods and products.
Sit with your stakeholders and learn about their expectations from the project. Translate these expectations into desired results. Then move on to the next step…
2. Define Key Performance Indicators (KPIs)
The second step is to define the metrics that would most efficiently track the performance of your project. These important metrics are called the Key Performance Indicators, or KPIs. In other words, KPIs are quantifiable values that help you understand how well you are achieving your business objectives.
Let’s relate KPIs to the automotive world. Not everyone who drives a car needs an intricate knowledge of how an engine works. The average driver doesn’t need to know about gears, belts or shafts to make it safely to the destination because only a few KPIs are important to the average driver:
- Top speed
- Fuel economy
- Safety rating
- Exterior/interior aesthetics and features
Measure these KPIs regularly and compare your results with what you wanted to achieve, whether the desired performance is being met or not. If they are not, how can you tweak and tune your strategy to be right on track? Implement changes and measure again. This process will help you maximize your output.
At Copart, before starting any new project, we brainstorm to identify the KBRs and then define the KPIs. Throughout the project life, we make many informed changes to achieve the desired results.