Creating a KPI Report Overview
KPIs (Key Performance Indicators) form a critical part of any good strategy. Typically there are three major components you'll need to include in your strategic plan - Objectives (what you want to achieve), Projects (how you'll achieve those things) and finally KPIs (how you'll measure your progress).
KPI reports are therefore a key element in reporting against the strategy of your organization or team. But how do you actually go about creating KPI reports?
In this guide, we'll tackle a step-by-step process to creating a good KPI report, as well as provide you with KPI reporting templates that you can download for your own use.
What is a KPI Report?
A KPI report is a document that includes a number of KPIs presented in a fashion that gives the reader a summary of how the organization is progressing towards a certain goal (or sometimes a set of goals).
Typical inclusions in a KPI report are:
- Multiple KPIs usually including both leading and lagging KPIs
- Data visualization such as graphs, tables or other graphics
- An element of historical comparison so that progress over time can be measured
- A commentary or explanation of key variances against KPI targets
Visually, KPI reports can take several different forms which will vary depending on the audience and the specific data being displayed.
We'll cover a few different approaches to creating KPI reports later on.
Why are KPI Reports Important?
KPI reports are important because they provide an up-to-date summary of how well an organization is delivering against its strategic objectives. Depending on your role there are a few reasons why you might want to consider preparing a KPI report, including:
- To keep your team up-to-date about progress against your strategy
- To give your investors/board members/superiors a balanced view of your organization's performance (or perhaps to motivate them to invest more money in you!)
- To make decisions about which parts of your strategic plan can be considered complete, versus which parts need additional attention
- To provide early warning signs about problems in your organization before they become full-blown emergencies
How Do I Prepare a KPI Report?
Now that we've established why KPI reports are valuable, let's explore how to go about actually creating your own KPI report to fulfill the needs of your organization.
We've broken the process of KPI reporting into a series of steps with examples. You can also go ahead and download our KPI Reporting Template to work on as you follow the process.
Step 1: Decide on the Scope of Your KPI Report
The first step in the process of creating a good KPI report is to be very specific about what you're trying to represent. Don't even think about starting to create a KPI report until you know what you're trying to accomplish!
The easiest way to think about the scope of your KPI report is to complete the following sentence:
I'm trying to show ___[who]___ how ___[what]___ is progressing for the purpose of ___[why]___.
I'm trying to show my investors how our revenue metrics are progressing for the purpose of securing additional investment.
This is an example of the scope of a very specific KPI report with a very specific purpose. Alternatively, you might have a broader purpose for your KPI report such as:
I'm trying to show my team how our overall business metrics are progressing for the purpose of keeping them in the loop about the performance of the business.
This is a much less specific scope but is equally valuable to specify. The reason we do this is that by knowing our audience, as well as our subject and our intended outcome we can more effectively make decisions about the content of our KPI report.
Step 2: Select Your KPI Reporting Style
There are several ways that you could go about presenting your KPI report. Here are two examples of the most popular formats for KPI reports:
Option 1: Dashboard Style
A dashboard style of KPI report emphasizes visual impact over depth of data. In other words, KPI reporting dashboards look impressive, as they typically include lots of colorful graphs and charts.
But the amount of data that you can usually include in a KPI reporting dashboard is somewhat limited by the amount of space that these charts occupy on the page.
Since you'll want to keep your KPI report to only a few pages, this can cause an issue if you want to represent large volumes of data in a dashboard style.
Here's an example of a typical KPI Reporting Dashboard:
As you can see, this KPI reporting includes several charts as well as large printed numbers that draw attention to the KPIs in question.
KPI reporting dashboards are great for the following scenarios:
- Presenting in-depth data for a very specific topic (such as demonstrating progress against a single strategic objective).
- Presenting high-level data for a broader overview of your organization (such as a high level summary of the major KPIs for your entire business).
- Creating a strong sense of 'polish' around your KPI reporting (such as to impress boards, investors or for public presentations).
If you like the idea of creating a KPI dashboard, the good news is that we've written a dedicated article on how to create KPI dashboards (including loads of examples). So do check that out for a bit of inspiration for your own KPI dashboard!
Option 2: Table / Snapshot Style
Another way of representing data for your KPI reports is to opt for a more tabular style of presentation (sometimes known as a 'Snapshot').
The table style of KPI reporting allows you to include a lot more data than the dashboard style - but at the expense of visuals such as charts.
The inclusion of historical data (such as progress over time) is also more limited in the table style since you're showing absolute values for data points rather than a visual representation of progress (such as a line on a graph).
Here's an example of a KPI report in a feature-style:
The table-style of KPI reporting is harder to digest at first glance, but on deeper inspection actually provides more data than the equivalent dashboard-style KPI report.
Times to opt for a table-style of KPI reporting might include:
- When presenting to people who are already very familiar with the subject matter and value increased depth of data over visual polish.
- When presenting deep drill-downs of data for a specific set of KPIs.
- When KPIs have many different elements/indicators (rather than just a simple 'progress' number).
There is no right or wrong way to represent data on your KPI reports, so play around with a few different styles and even test them out on your audience to see which gets the better response.
If you're using strategy execution software, it's going to be much easier to experiment with different data visualizations than if you're using more old-fashioned forms of reporting such as Excel or PowerPoint.
Step 3: Select the KPIs to Include in Your KPI Report
The next part of the process of creating your KPI report requires selecting which KPIs you want to include. If you're struggling to come up with what KPIs you want to track in general, take a look at our KPI examples for different departments.
You can skip straight to the KPI examples you need here:
Assuming you already have a set of KPIs in your strategic plan, choosing which KPIs to include is actually not all that difficult.
There is no 'right' number of KPIs to include in your report - but as a rule of thumb, if you're producing a dashboard-style KPI report, try to keep the total number to around 6, and if you're producing a table-style KPI report, try to keep it to less than 20.
Before selecting your KPIs, one critical step that you need to perform is to to divide your KPIs into 'leading' and 'lagging' KPIs.
You'll want to include a mix of both types of KPIs on your dashboard. If you need a refresh on the differences between leading and lagging KPIs, check out this article. But as a quick summary:
Leading KPIs are KPIs that give you an indication of whether or not you're heading in the right direction.
Lagging KPIs are the actual results of your efforts.
An example of a leading KPI would be 'Number of website visitors'. Whereas a corresponding lagging KPI might be '$ value of sales'. Why? Because the number of website visitors is not in of itself the desired outcome, but rather something that leads (hopefully) to the actual desired outcome, which is sales.
It's important to include a mixture of both leading and lagging KPIs on your KPI report.
And you can even structure your KPI report to tell a bit of a story, so that when you present the KPI report, you're not just running through a list of numbers, but actually painting a picture of what's happening and why.
For example, you could create a KPI dashboard report where the leading indicators are at the top, and directly underneath is a corresponding lagging KPI.
Don't forget to refer back to your scope (step 1) when selecting your KPIs - you need to ask yourself:
Have the KPIs I've selected worked to deliver against the scope of my KPI report?
Step 4: Add Commentary & Be Prepared
Often, people get super-excited about steps 1 to 3, and go off and create a beautiful KPI report - but then come unstuck when it comes to actually use it.
Remember, your KPI report is only as good as the underlying data. And furthermore, you need to have a clear idea of what you're going to change as a result of the KPI performance you're observing.
That's why we always recommend including a 'commentary' section on your KPI report. The same applies whether you're creating a dashboard-style report or a table-style one.
Have a look at the examples above once again and you'll see that both of them include dedicated sections for commentary. Typically, the commentary section is where you'll include:
- An explanation for any major exceptions in the performance of specific KPIs
- Any notes that relate to issues with data integrity or 'blips'
- An action plan for things you're going to do to address deficiencies on any of the KPIs you're reporting on
Not only are KPI commentaries useful for people reading your KPI report, they also force you to actually think about the data when you're creating the report - meaning that you'll be better prepared to answer questions when you come to actually presenting your KPIs.
KPI Report Template
To help get you started, we've created a couple of different KPI report templates. You can download them here. One is a dashboard style template and the other is a table style KPI report.
You'll need to customize them a fair bit for them to be truly useful for your organization, but they should be enough to get you started and provide a bit of inspiration.
More Resources for Creating KPI Reports
Hopefully, you've found this guide to creating KPI reports useful. We know that we've glossed over some of the harder parts of actually writing KPIs themselves, so here is a list of resources that you might want to check out to help you out:
Check out Cascade's KPI features here!