3 Levels of KPI Tracking for Managers
Managers have many responsibilities, but the biggest is helping their team succeed. Among 1:1 Meetings, emotional intelligence, and many other tools in your manager toolkit, data is the most effective option to drive strategy and empower your team to focus on the work that matters. Research has shown that KPI tracking can help you feel more confident in your decisions, become more proactive, and even save the company big bucks. But with so much data at your fingertips, many managers feel overwhelmed and unsure where to focus their efforts. This simple breakdown will help you prioritize what matters most and use the extra information to your advantage.
Three Levels of KPI Tracking Every Manager Should Know
The main question on every manager’s mind is, “Am I tracking the right metrics?” It’s a good question—after all, business is a numbers game, and what you don’t know can hurt you. But rather than go down a rabbit hole trying to focus on all the different metrics you can track, it can be helpful to think about KPI tracking as a 3-level pyramid of information you can use to enable your team and improve the business.
KPI Tracking Level 1: Overarching Business Metrics
The big three. The flagship metrics. The great white whales. Whatever you call them, these 3-5 essential metrics form the base of KPI tracking. These metrics steer the ship and keep everyone rowing in the same direction. In most companies, the leadership team decides on these core metrics. They tend to be broad (think Revenue, New Sales, etc.) and require effort from all the different departments to succeed.
These metrics are essential for a few reasons. First, they represent the overall health and progress of the company, providing a simple snapshot for measuring impact. That means, with a glance, everyone knows how the company is doing. In addition, overarching business metrics can act as a unifying rallying cry for employees. When the metrics are up, everyone can celebrate because they all (on some level) contributed to the success.
As a manager, it’s crucial to have your finger on the pulse of the company. Even if your team’s day-to-day activities don’t immediately or directly impact these metrics, they can still help you make strategic choices around task prioritization, hiring, and other critical decisions. So if you’re not tracking anything, this is where you should start.
KPI Tracking Level 2: Team-Specific KPIs
As a manager’s bread and butter, team-specific KPIs make up the meat of the pyramid. These metrics are critical for your team, as they keep everyone accountable for their work. But more importantly, team KPIs can help bridge the gap between your team’s day-to-day activities and the broader business goals by showcasing how their work impacts those goals.
If you’re on the product or customer success teams, your team-specific metrics might include Churn and Customer Lifetime Value (CLV), while the marketing team might be more focused on things like Customer Acquisition Costs (CAC) or First Time Buyer rates.
As the team leader, you should be an expert in these metrics—living and breathing them every day—and your team should also know them. That means they should be front and center in weekly meetings and readily available to everyone on the team whenever they need them.
KPI Tracking Level 3: “Miscellaneous” Data
Most managers know to be aware of the main business metrics and the team-specific KPIs. Still, the best managers understand that the seemingly extraneous data can actually be a goldmine.
Miscellaneous data is the final point of the pyramid that helps you optimize the small stuff to make a significant impact. While it’s not a requirement to track every metric, looking for trends in the extraneous data can often help you find small areas for improvement. These adjustments, even the small ones, can impact other essential metrics like CAC (Cost of Acquisition) or the GM (Gross Margin), creating the opportunity for substantial profit gains in the bottom line.
This extra data doesn’t have to play a huge role in team dashboards or weekly meetings, but it can be a great way to level up your efforts and impact. So while your team stays focused executing on those critical metrics, you can spend your extra time mining extraneous data to better optimize the strategy and find those bits of gold.
New Features At Align Help Managers Do More
No matter which area of the KPI tracking pyramid you’re focused on, Align can help you organize and prioritize the data that’s important to you.
Our software helps managers keep essential business and team KPIs top-of-mind with company dashboards that display real-time tracking for flagship metrics. We make it easy to consolidate all the different data input sources into one or more simple dashboards. That means you have everything you need to streamline meetings and enable your team to make better business decisions.
And now, with new updates to our software, managers can explore even more data outside their essential KPIs. With all the information you want at your fingertips, you can harvest valuable insights to move your strategy forward and help your team optimize their efforts.
Learn more about Align today.