7 Steps to Develop Impactful KPIs for Your Coworking Space
Editor's Note: This is a guest post from Ed Blunderfield from Optix, a digital platform for coworking spaces and smart offices.
One of the best parts of my job is visiting coworking spaces around the world and learning about their approach to building a successful coworking brand. Last month, I was in Seattle (you can read more about that trip here) and I saw firsthand the power of setting strategic key performance indicators (KPIs).
The most successful spaces I visited had clear, focused KPIs that were directly linked to the organization’s strategic priorities. Their entire team was aligned on the importance of these metrics and they had established a regular practice around analyzing their data, distilling insights, and implementing changes.
When it comes to KPIs, you get out what you put in. KPIs start to become deeply impactful when you and your team are measuring the right things, analyzing the data with intention and effectively translating your insights into action. In this article, I will outline seven key steps to achieving success with KPIs.
1. Begin with a clear strategy
To avoid creating an overwhelming list of generic coworking KPIs, get focused (and aligned within your team) on what you are seeking to achieve and how you plan to get there. With a clear vision and strategy, you have a solid starting point for developing meaningful indicators that you can measure with confidence.
Involve your team in this process and look for ways to simplify your strategy. This will force you to drill into what is most important and what you hypothesize will be the most influential drivers to achieving results.
2. Generate hypotheses to test
The hypotheses you’re uncovering in this process are going to be directly tied to your company’s KPIs, and provide useful context for setting goals. This step is essential to ensure your focus is razor sharp and you’re measuring things that are immediately relevant.
As an example, if a pillar of your strategy is to become the coworking space of choice in your city for designers and creative professionals, you may hypothesize that increasing the frequency of touch points between that ideal customer and your brand will increase the number of tours booked.
There are going to be a lot of possible hypotheses. Pressure test them as a team, make sure they are meaningful and relevant, and then prioritize them. After you have identified these you will be able to evaluate each KPI you create and ensure they are supporting your strategy.
3. Identify your ideal data points
What data do you need to be collecting in order to get clear answers to your hypotheses? There is the ideal dataset, and then there is the current reality that you’re tracking now - you’re not alone if you find yourself in a position where many crucial data points have not been collected historically.
Whatever your current situation is, you can plan for the future and begin tracking what you need today. This will likely require some iteration, but do your best to ask yourself if collecting this data will allow you to respond to the hypotheses you have uncovered. You also don’t have to start measuring everything at once – try introducing one new data point per month to start measuring to help make it more manageable.
Using our previous example, potential data points could be: the number of design-focused events your team has been involved with, impressions from targeted digital advertising campaigns (e.g., Google or Facebook), or other measurable efforts related to marketing.
4. Create a decentralized tracking methodology
This is where we begin to shift from ideas to action. It’s one thing to thoughtfully craft your list of context-specific KPIs, and an entirely other feat to turn them into practical tasks in your coworking space.
Determining how all of this data is going to get captured, what tools will be used, who is responsible for each KPI, and how often that information is reviewed, are all crucial to success.
Make sure you’ve assigned an owner to each KPI to ensure nothing is missed and to help create a sense of ownership and engagement around the entire process. This will often lead to opportunities for improvement, as each team member begins working more closely with their respective indicators and begins to uncover challenges and opportunities to tweak or re-frame the approach.
When it comes to timing, the most important thing to avoid is ‘stale data’. This happens when you collect a certain data point and then report on it too late for the data to be accurate, relevant or otherwise useful. The ‘expiry date’ on your data is going to depend on which metric you are looking at but, as a general rule, do your best to shorten the time between data collection and data analysis.
5. Get your entire company bought in
By this point in the process your team members who own KPIs will be fully aligned, but anyone who is outside of this process needs to be brought up to speed.
Everyone needs to be clear on how their efforts are linked to the company’s overall strategic priorities. This increases buy-in, provides motivation, and creates efficiencies through focusing on the right things. Each team member needs to examine and answer the question, “How does what I am doing today affect these KPIs?”
Invite questions, feedback and observations, and then commit to running with your freshly minted coworking KPIs for the next month.
6. Report your KPIs, analyze the data, and distill insights
You’ve come so far in the process, now it’s time to work with the raw data you’ve collected and draw out insights to improve your business. Carve out time, create some headspace, and dig into the numbers. Look at the data from different angles, and return to your core hypotheses and strategy to see what answers you can start to uncover.
It’s always fruitful to spend some time analysing on your own, and then coming together as a team to avoid the traps of groupthink too early on. You’re likely to see different things in the data and ultimately establish a more nuanced understanding of how your business is performing and what you can do about it.
Try to explain your insights to others as simply as possible, and begin to think about how this wisdom can be translated into action.
7. Grow your coworking business and keep iterating
After all of this hard work, you now get to enjoy the process of refining your operations and improving your business. Some of the indicators you are tracking may prove to be less useful than you originally thought. That’s fine, and this is a good opportunity for you to reevaluate and tweak them. The best thing to do here is to avoid tracking data for the sake of ticking off boxes.
Many of your KPIs are going to provide clear opportunities for improvements, however, and it’s up to you and your team to create the relevant tasks, complete them, and then observe the results the next time around. This can be an iterative process where you check-in with your team every few months to ensure your efforts on collecting and tracking your KPIs is adding value to your business and helping your team hit their milestones and goals.
KPIs can be a profoundly valuable tool for improving the performance of your coworking business and achieving strategically-aligned growth objectives. I hope that by borrowing from the approach I have illustrated here, you can develop a more thoughtful, strategic and measured approach to creating impactful coworking KPIs for your business. As always, I’d love to hear from you if you have feedback, questions or want to share an inside scoop on your approach to growth!