23 Best Practices for Reporting Performance Metrics Effectively
All companies use key performance indicators or KPIs in some way to measure the health of their business, gauge project progress or success, determine if a strategic plan is going as planned, or track long-term goal implementation.
However, for many companies, the KPI reporting process is fraught with multiple issues and challenges that reduce its impact.
These issues include siloed reporting, inconsistent delivery format, no alignment across departments or teams, lack of context, focusing on vanity metrics, verbose and unclear language, lack of stakeholder buy-in, and more.
Well-crafted KPIs and seamless reporting help businesses make better decisions and can be the difference between failure and success. Effectively reporting key metrics is rooted in several best practices that cut across planning, design, usability, and consistency.
In this article, we share 23 proven practices to take your KPI reporting from ordinary and underwhelming to extraordinary.
1. Attach KPIs to SMART strategic objectives
Many businesses focus on what is best described as vanity metrics. These metrics make the business look good but ultimately do little to move the needle.
For example, you can tout having 100,000 app downloads as superb, but if only very few of that number are active daily users, then the 100,000 is not worth much.
One is much more important than the other; only active daily users generate recurring revenue.
That’s why tying a key performance indicator to a business objective is ideal. From the onset, ask yourself, what is the purpose of this KPI, and what would this report help its readers achieve?
Aligning KPIs with your organizational objectives ensures you track only the metrics that matter to your vision, mission, and strategic direction.
Not sure how to write strategic objectives? Our How to Write Strategic Objectives? (Expert Insights) blog post provides a comprehensive guide on the subject matter.
Quick steps on how to choose KPIs
1. Create a performance indicator team for gathering requirements, validating and prioritizing performance measures, standardizing metrics across the organization, setting realistic targets, and getting buy-in across the board.
2. Always start with your mission, vision, and strategic goals.
3. Choose metrics that paint the full picture.
4. Develop a measurement plan
5. Create a quality and accurate data pipeline
6. Review and refresh as necessary.
You may also like: 7 Key Steps to Develop Effective Performance Metrics.
2. Get stakeholder buy-in
Effective performance management or reporting is only possible with top executives championing and promoting key metrics. Performance measurement and reporting systems and processes will not meet expectations without leadership commitment.
Firstly, executive involvement creates and deepens data culture in the company. Secondly, it helps foster the collaborative spirit required for tracking and reporting on performance data. Performance metrics reporting is a collaborative endeavor.
The data, context, reasons, potential solutions, and more you’ll need to complete your reports will depend on other teams and individuals.
Hence, it is very prudent to get the buy-in of all stakeholders from top to bottom.
3. Keep KPI reports simple
Clarity is your best friend when communicating and reporting on KPIs. It's easier to achieve clarity when you keep everything simple, from your words to picking the proper formatting.
Stick to industry-specific terms and color codes for easy understanding.
If you're introducing new terms, define these terms at the beginning of the report. Simplicity ensures everyone understands the metrics uniformly.
Go straight to the point. We especially recommend it when preparing reports that would be read by senior management.
You should also create a summary page so that readers can quickly understand what to expect and key takeaways.
A simple and time-proven structure you can adopt includes:
Background, which talks about business objectives or goals
Methodology to discuss assumptions, approach, data collection, and more
Results covering the KPIs, targets, charts, and necessary context
Discussion on whether the team underperformed or excelled and the potential reasons
Recommendation to provide the next steps
4. Choose realistic targets
Targets make KPI reporting a continuous improvement and iterative process. Targets help you create goals to aspire to. However, for the benefit of your team, these targets must be realistic and achievable within the stipulated time frame.
Imposing unrealistic targets can demotivate your team and make them passive participants in actualizing the target and the reporting process.
This is even worse when they feel the goal is unattainable because of limited resources and skills.
This is not to say that you cannot set goals that stretch teams and the whole organization to achieve remarkable goals.
However, you must always acknowledge and appraise the level of skills and resources required to attain a given target.
Furthermore, always give room for growth and human error and set goals that elicit commitment towards the whole process.
5. Assign responsibility and authority
One of the core anchors of effective reporting is accountability. You must not only assign responsibility for results but empower employees with the appropriate level of authority to get things done.
It’s easier to track metrics when ownership and responsibility are assigned.
This shows how strategic objectives and KPIs are cascaded from the top downwards. Managers and employees must know their role in meeting established KPI targets and improving the company’s performance.
For example, you must empower and authorize employees to retrieve the financial data if you assign them to finance-related metrics. We know how financial data is guarded in most organizations.
Assign someone with the required level of access if you’re concerned about data privacy issues.
In essence, assigning responsibilities without the attending authority will likely lead to delays and reports missing key details.
You may also like: Top 11 Tips for Establishing Clear KPI Accountability and Ownership
6. Create a reporting structure
Create a structure for reporting performance metrics. This relates to the reporting chain and other details like the frequency, format, and access.
Teams and individuals will know when to submit specific reports and to whom. The structure details who can access each report, especially those that pertain to sensitive business information.
Creating a reporting structure also allows for consistency across the board. It would greatly help if you provided KPI reporting examples to teams and individuals to help them know the standard.
Without any clear or visible reporting arrangement, reports won’t get to the departments and the people who need to make decisions with them.
Also, various departments may use different metrics and targets to track the same goals and objectives.
7. Always include context
Data without context is the easiest route to misinterpretation and deductive conclusions. You need to help users understand the data you’re presenting and what the findings mean. You won’t always be there to explain the report.
Talk about the limitations of the results, some of the assumptions you made, and why the methodology you chose was the best for analyzing the KPIs.
For example, if you’re forecasting the sales or average response time, you must state the assumptions powering such predictions.
Additionally, don’t be afraid when results are not conclusive. You may call for more investigations if the benefits are tangible. But clearly state these benefits.
8. Ensure clean, accurate, and credible data
The phrase “garbage in, garbage out” perfectly captures the importance of clean and accurate data. The quality of your data will determine the quality of your insights, which will determine the quality of your decisions.
Here are a few characteristics of good and credible data:
Unbiased: There’s no conscious or unconscious preference in favor of a person, thing, or group of people
Reliable: The data is accurate and complete, and the source has been vetted
Original: The primary source is always validated
Comprehensive: Contains all important data and elements to track KPIs
Current: Sources provide up-to-date KPI data
Ethical: Conforms to the tenets of data ethics and privacy
Actionable KPI analysis and reporting depend on data integrity. If it’s compromised, your insights will lead to wrong conclusions.
Pay particular attention to duplicated, manipulated, and transformed data in your reports. These processes can easily compromise data.
You may also like: 5 Tips for Streamlining Data Analysis and Reporting for Actionable Insights
9. Create KPI dashboards for real-time monitoring
KPI dashboard may be mandatory as part of the reporting structure and format. However, we recommend having your dashboard, whether you’re in charge of a KPI or the project manager overseeing KPIs for your organization.
One of the reasons for this is that you can personally set alerts and triggers for when the KPIs reach certain minimums or maximums.
This helps you have the complete story and context about the KPI over the monitoring period.
Secondly, you can make proactive corrections when KPIs are not going as planned.
As applicable, tailor each dashboard to the audience and provide the level of appropriate detail requested or required if sharing the dashboard with others.
10. Choose a great KPI reporting software
Reporting KPIs becomes easier with a comprehensive solution that goes beyond making dashboards. Such solutions come with numerous features to make life easier.
Some of the notable features of excellent KPI reporting software include:
Can connect to a pipeline of multiple data sources to give you a comprehensive and quick overview of business performance
Integrations with other tools for more robust functionality
Ability to cascade KPIs and align departments, teams, and employees to a common objective
Easy to use and comes with a great user interface
Trigger alerts for monitoring KPIs proactively
Built-in chat to communicate with and send comments to KPI owners
Kippy is an excellent KPI reporting software with the above features and more. It is equipped with artificial intelligence that helps you finetune and generate KPIs for your objectives.
11. Seek and incorporate feedback
Reporting structures and processes should not remain static. Actively seek feedback from KPI owners on the challenges they’re facing. They may have issues accessing important data or plugging some data sources into the KPI software.
Additionally, show your report to at least two colleagues before submitting it.
Did they give the charts and visualizations the interpretation you intended?
Were they confused by any parts of the report?
Seeking feedback helps you refine the reporting process and the report itself.
12. Use data storytelling
Create compelling narratives around your data and KPIs. These narratives make reports more engaging. It also helps non-technical people in your audience to understand and appreciate complex information.
The core parts of data storytelling include:
A narrative: It’s not about telling an epic tale. It’s about covering the data in ways that make it more persuasive and captivating to the listener or reader.
Visualizations: Create charts and graphs to drive home your viewpoint. Choose both a granular and high-level overview to make your narrative clearer.
Data points: Highlight key data points central to the KPI.
13. Choose simple graphs and charts
When delivering KPI reports to a broad target audience, it's better to stick with simple charts and graphs requiring little or no explanations.
Think about your visuals from the audience's perspective. While you may be able to interpret candlesticks, your audience may not find it straightforward.
Stick to bar charts, line charts, histograms, pie charts, and other familiar graphs and leverage design features like contrast, highlights, size, colors, and text to focus the reader's attention.
Lastly, ensure the graphs have clear formatting, titles, and labels so readers can understand them without stress.
14. Honesty is the best policy
Use the same vigor to present positive and negative KPIs. Don’t hide bad results in the text or place it in a way that it’s not easy to catch. Also, don’t downplay or minimize the potential impact of both positive and negative KPIs.
Decision-makers must have all the valuable information they need to make the best choices to move the business forward.
So, honesty is the best policy to adopt here. Don’t worry; you’re not a bearer of bad news. That you didn’t meet the target shows there’s room for improvement.
Don’t exaggerate or hide the context even when KPIs results are positive.
It’s better to be honest than find it hard to replicate such success later on if the positive results are a function of randomness.
15. Save time with report templates
Creating report templates saves time for you and KPI owners. In addition to time, it facilitates a consistent and standard framework for reporting.
KPI owners don’t have to create reports from scratch, which may delay reporting.
With time, everyone knows what must be included in reports for customer satisfaction, marketing activities, or anything else.
Edit, renew, or replace existing templates when things change. For example, you can change KPIs or certain metrics that are no longer valid or valuable.
We’d recommend avoiding boilerplate text because every report has its context and story.
Use placeholders instead to show KPI owners where to insert text, graphs, or metrics.
16. Schedule and automate reports
Use tools like Zapier to schedule and automate reports. This process greatly reduces the manual labor you commit to reporting metrics. Automation saves time and reduces errors. It also helps you put reports in the hands of decision-makers quickly and efficiently.
Tools like Zapier can pull data from multiple sources like spreadsheets and CRMs and funnel it to data visualization and KPI monitoring tools like Kippy for interpretation and analysis.
You can also create automation to share these reports via any communication channel. However, email remains the most prudent choice, except the recipient has stated otherwise.
With Kippy, you can integrate with external sources and tools, including Zapier, spreadsheets, Slack, and more.
17. Keep reports focused
When working with KPIs and many other important metrics, you may be tempted to add as many details as possible.
Too many details can distract from the vital and actionable data you’re trying to communicate. Simply stay away from unnecessary details. It can be overwhelming for readers.
That’s why we recommend having only one purpose for each report, e.g., monthly sales report, monthly customer satisfaction report, and monthly social media engagement report, and sticking to the theme.
Whether the report is a single page or a few pages doesn't matter. What matters is that readers or users have clarity and can focus on the metrics that matter.
If you must include extra details, it must be to either prove correlation or causation with another variable or factor unrelated to the subject.
18. Create a sense of urgency
Be somewhat aggressive with KPI owners to create impetus for them to move in your desired direction. The desired direction, in this sense, refers to taking their targets and reporting seriously.
Leaders and KPI drivers don’t have to wait for cataclysmic events to push for more seriousness in tracking and reporting KPIs.
Earlier, we stated how leadership and executive commitment set the tone for the reporting culture. It must be a recurring part of their message; “what we don’t measure, we cannot improve.”
There are many mechanisms to create this sense of urgency. One is to follow up and send reminders to KPI owners to encourage, clarify, and ask for feedback. Follow-ups should be infrequent unless it becomes micromanagement.
Another tool to employ is to attach rewards and incentives to meeting KPI targets and submitting reports on time.
These incentives don’t have to be monetary. Many examples of non-financial rewards include credits towards training and courses.
19. Always proofread and crosscheck reports and visualization
Always edit, proofread, and check for errors before sending reports to recipients. Even if it’s a simple dashboard, check that the graphs are well-labeled with proper axes, titles, labels, and annotations.
We recommend sticking with short sentences and paragraphs for more detailed reports. Use tools like Grammarly to proofread the text and correct basic grammar mistakes.
The free version is more than adequate for your needs, so there’s no extra investment.
Share your reports or dashboard with others. Users may infer other meanings from your charts or statements. In such cases, redo those charts and ask for their opinions again.
20. Provide actionable insight and recommendations
Reports should go beyond just compiling data for decision-makers. Reports should provide actionable insights and intelligence that empower leaders to make better and more informed decisions.
This calls for understanding the topic and essence of each KPI, especially as it relates to short- and long-term goals. Examples of such intelligence or insight would include:
Comparison of current results to the past, including key drivers of change
Efficiency of resource usage towards the production of goods and services
Effectiveness of operations and activities toward meeting KPIs and long-term goals
These types of intelligence are vital and speak to measures and insights that spot trends and describe the direction and present status of the organization. The abundance of data can be a distraction.
Simply because data is available doesn’t mean it’s useful or tells a significant story.
Hone in on what’s important and use it to improve operations, service delivery, products, and productivity.
21. Refrain from making reporting punitive
It’s not helpful when employees feel like KPIs are a trap. Sometimes, the purpose is lost in transition or feels like a “gotcha” system. As such, they may be less than enthused about their role in a seamless reporting system.
Help employees and KPI owners see performance reporting as a learning and iterative process to identify processes and operations that work and reduce or eliminate those that don’t.
22. Openly share progress
Openly sharing KPIs and progress made meeting targets is a great way to enshrine a strong performance management culture. You don’t need to share the KPI owners for all metrics, but you can openly celebrate those who meet their targets.
Of course, there’s room to shield sensitive financial or company data.
Employees should be able to view company objectives from the KPI software in real-time. It helps them appreciate their role in a much bigger organizational picture.
23. Communicate, communicate, communicate!
For an effective performance metrics monitoring system, communication is essential. There must be communication between leaders and employees.
Team leads must communicate with their members. KPI owners must communicate with their supervisors.
Communication must exist from top-down, bottom-up, and sideways across the organization.
Leaders can organize town hall meetings, breakfast meetings, or focus groups to emphasize the company’s goals and the importance of selected KPIs. Regular email updates can help, too.
The goal is to create an open channel for multidirectional communication to enhance KPI tracking and reporting.
Takeaway: Enshrine performance management culture for effective KPI reporting
Performance measurement is critical to a business’s growth. Peter Drucker sums it up best, “you can’t grow what you don’t measure.”
That said, the process for tracking and reporting performance metrics must be deliberately structured for success. This article focused on best practices for this success.
The key takeaways include making a commitment to aggressively tracking KPIs, creating a unique structure tailor-made to your organization, recognizing it’s an iterative and ongoing process, maintaining focus on only metrics that matter, and using a feature-rich KPI reporting tool.
Kippy is a robust reporting software that makes tracking, calculating, visualizing, and reporting KPIs seamless and effective.
Are you ready for a remarkable software to turbocharge your metrics reporting? Book an interactive demo to see how Kippy can help you!