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Using KPIs to measure a project team's effectiveness

Moira Alexander | May 18, 2016
Key performance indicators play an indispensable role in project management and aid in measuring the success or failure of project activities. Understanding KPIs and selecting the ones that are best-suited to measuring a specific project team’s performance is not always easy.

Key performance indicators (KPI) serve an essential role as a key measure of how effectively a project has performed in relation to identified, required and agreed-upon strategic objectives. Without KPIs, determining the success of projects and project activities is a guessing game, with no way to quantify goal attainment.

The types of KPIs vary, depending on critical success factors (CSF) like industry, product or service, and stakeholder business and operational strategies. Nonetheless, KPIs must be clearly identified, achievable, and quantifiable in an appropriate form and within specified parameters in order to be completely suitable for a given project. For example, if one CSF of a new software business is to develop a Web-based portal that will garner a specified number of new customers that sign up for a monthly subscription service, then a relevant KPI could be quantitative in nature — something like number of new subscribers.

When deciding on what KPIs to use, you should clearly and accurately define critical success factors first, and then identify KPIs that are most accurately and directly tied to the CSFs. Again, both the CSFs and KPIs must be clearly defined and agreed-upon by stakeholders and they should be ranked in order of importance to the overall business strategy and goals.

Here are some examples of the types of project management KPIs that apply to team performance and strength:

  • Financial: These are typically utilized when the measure is monetary.
  • Quantitative: These are for projects where the relevant metric is not financial but is something that can be quantified numerically.
  • Qualitative: A qualitative KPI is used when the relevant metric is not numerical in nature.
  • Process: A KPI evaluating the process employed in a project can be used when the priority is to assess efficiency.
  • Team performance: This type of KPI can be used to measure a team’s strength and its ability to execute.

KPIs measuring team performance would most likely be qualitative in nature. But a process or quantitative metric could also be used to evaluate teams — depending on the nature of the project, product, service or industry — since team and individual activities may involve the utilization of specific processes or quantifiable activities to accomplish goals.

Here are some steps that will help you identify the KPIs that are appropriate for your project.

Step 1: Consider compiling a team ‘to be’ list

When trying to determine KPIs to measure your project team’s performance, strength and overall synergy, think about your expectations and the factors that will determine success in relation to the specific project objectives and overall business objectives. It's important to know as precisely as possible what you’re looking for before you can decide how to accurately measure it. Essentially, you need to determine what you want the team to be. Here are some steps that will help you draw up your “to be” list:

  • Determine the specific characteristics, qualities and skills you’re looking for in individual team members.
  • Consider what a successful team would look like in terms of how people work together, interact and communicate, as well as the level of professionalism and commitment they exhibit.
  • Factor in how members are anticipated to interact and communicate with other stakeholders external to the team, such as front-line staff, management, vendors and clients.
  • Identify individual- and team-based factors you believe can positively or negatively impact project outcomes.
  • Determine exactly how you envision team members working with one another, and with other stakeholders, to accomplish project goals and overall business objectives.
  • Seek input from management, team members and stakeholders prior to solidifying KPIs. This can greatly aid in smoothing buy-in from all parties.

 

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