Deciding on which goals and KPIs to set
Let’s start with some awesome quotes pretentious people (who have never reached a goal in their life) will tell you:
- “You need to know your purpose to achieve goals”
- “You need to sacrifice everything to get to your goal” (and then they die from malnutrition)
- “Aim for the sky and hit the fence – rather than aim for the fence and hit the ground”
The road to hell is paved with good intentions.
Your current reality
Goals are exceptionally personal – and for a reason. They define not only who you will be but also who you are at this point. It would thus makes sense to do a tally of where you are currently:
- For financial goals, do some calculations to check your nett worth and debt levels
- For relationship goals, work out where you are currently (e.g. amount of quality time you are spending together etc.)
- For physical and health goals, you can measure calories intake and a count of gym visits
- For work related goals, you can check things like hours worked, timely deliverables, quality of work, etc.
Once you have established your current reality, you can calculate / decide where you want to be. No one can decide this for you, but I do suggest that you ramp your goal up once you’ve reached it to avoid becoming complacent.
An easy way to remember how to make your goals clear and reachable is with the ‘SMART’ acronym:
- Specific (simple, sensible, significant).
- Measurable (meaningful, motivating).
- Achievable (agreed, attainable).
- Relevant (reasonable, realistic and resourced, results-based).
- Time bound (time-based, time limited, time/cost limited, timely, time-sensitive).
Define your goals
As soon as you know your current reality and keeping in mind that you need to handle this ‘SMART’, you’re now ready to start with your goals. Focus on what you want to achieve.
Here’s one of my goals: “Even though I still owe more than 50% on my mortgage on investment property X, My goal is to pay off the property within 6 months – starting January 2019”. Here’s a breakdown:
- Specific: The goal is a one-liner, it makes sens in the greater goal of FIRE
- Measurable: I know when this goal is reached and can check throughout my journey how far I am
- Achievable: I have done substantial calculations that it will be possible, though it will stretch me a little bit
- Relevant: I have resources and it’s absolutely results based
- Time bound: I set a time limit when this needs to be achieved
Process goals and result goals
In your journey you will discover that you have different types of goals: some are process goals, others are results based. Many times the results goals would need to be followed up with process goals.
This is fairly simple to do, as you can break your final goal down into smaller chunks – you will know exactly when you are behind (lagging) and at any time know that if you would need to up your game to achieve the goal.
You do want to focus your KPI on result goals, as this is what you want in the end – Results.
Key Performance Indicators is nothing more than the process goals – we measure the performance of indicators that will give us the outcome/result in the long run.
Please check out the link here of my KPI sheet. I have broken the goals down to different sections. This will give you an idea about what you can measure.
Deciding your KPIs to measure
If you have your goals set out, you can now start measuring. On some cases, you can quickly set the KPI’s that you are able to measure, such as time allocations and money that needs to your debt every month.
Some require a bit more practicality or needs to be followed up in the next cycle with practical application. Here’s some examples:
- In your last KPI, you did a course in Google Ads. In the coming cycle you need to run 5 x A/B testing campaigns to test what you have learnt. In the next cycle, you need to optimise these ads to up your conversion / click through rate by X %.
- You spend R X on Takeaways and special treats. As you want to still enjoy your life, but not spend THAT much, you say that you do to eat out only twice this month, up to the value of R xx – if you overspent, you would need to wear a Bulls jersey to work (which would make you cry on the inside, as you are a Sharks fan)
Tips on KPIs
- Measure regularly (daily, weekly, monthly): You want to do everything in your power to reach your KPIs so that you can reach your goals. So
- You should know exactly when you are behind with a goal, as you are measuring your KPIs. When you have missed your target, take heart! Don’t be depressed and fall over and die:
- Check out your habits that led to the missed goal (see info on habits here).
- Use the information gathered to make it simpler and more obvious in the next round for you to achieve your goal.
- Be flexible: If the goals have changed, adjust the behaviour and KPIs.
- Accountability: I have a monthly meeting with my wife to discuss the KPIs and what has and hasn’t been achieved.
KPIs makes it easier to achieve goals. I do believe that we shouldn’t measure everything, but only the things that’s important.
Never underestimate the power of habit in reaching your end goal.
Happy goal setting!
Frugal Local runs his own company (Effectify). He does software development and helps small businesses and startups with digital solutions. He enjoys writing articles and simplifying complex things – such as the article you’re reading!