KPIs in Business Design aren’t homogenous. But that doesn’t mean there aren’t rules you can follow

Annachiara Foschi

Product Owner

12 min Lesezeit

The quality and impact of design is often seen as something that cant be quantified or measured in the same sense as other key aspects of a business. Yet when this applies to so many areas of a business plan, its vital that teams create metrics that relate to business design success to guide future strategy.

But before we get into the Key Performance Indicators (KPIs) that business designers should be paying attention to, let’s first think about exactly what business design is. On the face of it, it’s a very broad term that doesn’t lend itself to a clear, self-explanatory definition. However, at its core, business design is about getting different perspectives of a business model and building on the relationships between the processes and resources required to help a company achieve its objectives and meet its customers’ needs.

For me, business design is also about working collaboratively, moving away from traditional structures, and using new frameworks and technologies. Business designers have to take a human-centered approach in order to achieve success, thinking from the short term all the way to the very long term in order to have a vision of where the business will be in five to ten years time.

So, with so much at play in business design, it’s vital to know when it’s going well and when a change of direction might be in order.

Metrics have a place in measuring business design

Without clear metrics to measure whether or not youre achieving your business objectives, its impossible to know exactly how close or far away you are to those goals. It could be the case that you need to change the direction of the project, or keep pushing in the same direction to further intensify results.

A surprising amount of companies don’t adopt a data-oriented approach at all while measuring business design success. This can result in crucial data that could drive future strategy going unnoticed, or blindly trusting assumptions that need to be tested according to customers’ wants and needs.

To avoid this data-less disaster, businesses should set up KPIs to measure success. Let’s take a look at how they can set these up and make sure they’re looking at the right metrics.

KPIs pave the way to success

Setting up the right KPIs will, of course, depend on the sector youre working in and what problems youre trying to solve. For example, an app-based business might focus on quantitative metrics such as monthly active users, downloads, user retention, and length spent browsing.

KPIs absolutely have to be set from the beginning of the process, otherwise you won’t know what the starting point is and results can be skewed to confirm pre-existing assumptions. Creating KPIs to measure performance from the beginning of a project also means being open to having your assumptions challenged and even disproven. Data doesn’t lie, so trust in it and use it to guide your most important decisions.

Some examples of creative ways to set up KPIs include:

  • Research your competitors activity: Find out what kinds of structures theyre using and what theyre measuring and prioritizing. This can be done via online research or even conducting interviews with your competitors customers.

  • Use frameworks: Googles HEART framework - Happiness, Engagement, Adoption, Retention, Task Success, measured against Goals, Signals, and Metrics - is a great one to use for business design as it allows you to measure user experience (UX) on a large scale -- powering decision-making in the product development process. Not all teams will require all metrics but it provides a great starting point to assess the success of your UX.

  • Conduct a meta-analysis of the business model canvas: Youd be surprised at how many ideas can pop up just by taking a step back and looking at the business model. In doing this, you can reflect on the goals of different departments and how they can synergize to gain insights from the same KPIs.

Quality insights are crucial

Now you know you need to set up KPIs, but they cant just be any KPIs. Throughout the whole process, you need to make sure that youre actually measuring the right thing. All too often, businesses get caught up on the wrong data that gives them an incorrect overview, causing them to make the wrong assumptions.

As explained by Tristan Harris, many tech companies too often focus exclusively on time and attention as measures of a product’s success. However, it’s also crucial to look at more meaningful metrics that indicate engagement and long term retention. Quantitative research can be supplemented with qualitatively-collected insights from surveys or interviews with users -- meaningful KPIs mean looking deeper into the success metrics you’re using and being honest about the value provided.

Combining quantitative and qualitative methods can allow you to uncover some really important insights. For example, the automotive industry is known to focus heavily on quantitative metrics, yet with the ever-increasing level of competition in the industry, automakers could benefit from looking at the story and UX behind certain metrics.

Let’s say a carmaker sells record numbers of a certain car model. With this quantitative data, they might understand that they need to increase the production of this model to satisfy demand. But what they don’t understand is why the model is so popular and what precisely caused customers to buy it in such high numbers.

As well as collecting quantitative data surrounding sales, the automaker could also conduct interviews or surveys with customers to find out exactly what made them choose the car over other models. This way, the carmakers get vital insights into certain successful aspects that they could then apply elsewhere in their designs.

A real-world example of this comes from the demise of Nokia. The mobile phone company, which used to be the leader in its sector, focused too much on short term KPIs and failed to understand where the market and user preferences would go next -- ignoring the growing prevalence of software over hardware in the industry. Application-based smartphones invaded the market and completely trampled over Nokia’s previous sector dominance. With smart, forward-thinking quantitative and qualitative research, Nokia could have better seen the oncoming market changes.

Data is vital, that much is clear. Using KPIs to track your business’ most important metrics and data is mandatory to knowing you’re on the right track. But simply creating KPIs and sitting back isn’t enough -- they need to be set from the outset, monitored continuously, and adapted according to business and market changes. And when those KPIs are complemented by qualitative insights, even better: You can be sure that your strategy is informed and paving the way for business design success.

Challenge everything!