What is the first step in setting up Key Performance Indicators (KPIs)?

The first step in setting up Key Performance Indicators (KPIs) involves determining key objectives. This foundational step is critical because it establishes the specific goals and priorities that the organization seeks to achieve. Without clear objectives, it becomes challenging to develop KPIs that accurately reflect the performance indicators necessary for measuring success.

Identifying key objectives provides a framework within which to create measurable indicators that align with the strategic vision of the business. This ensures that the KPIs developed after this step are relevant and directly tied to the overall goals of the organization, allowing for effective tracking and management of performance.

Following the identification of key objectives, subsequent steps can include defining intended results and setting targets and thresholds, but these actions depend on the clarity of the objectives set initially. The mention of utilizing lagging and leading indicators comes later in the process, after key objectives have been established, as it helps in refining and enhancing the measurement approach.