There should be a causal relationship between the two.

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The KPI tree is a way to brainstorm and organize the structure of KGIs and KPIs and visualize their relationships with branches and leaves in a tree diagram. By laying out the entire structure of KGIs and KPIs, you are able to identify problem areas and address them early and avoid trying to solve your tasks using disconnected methods or indicators. Feel free to refer to the KPI tree below when developing your own goals.

Human Resources/Recruitment:

KGI = Number of job offers accepted
KPI = number of job openings, number of applicants for information sessions, number of “excellent candidates” you specifically want to hire, etc.
 

Sales (in the case of B2B sales)

KGI = Number of new customers (companies)
KPI = number of consultations, appointments, meetings held, pitches made, close rates, etc.


Tips for choosing the right KGI and KPI targets
 

1. Always set something quantifiable.
A common mistake is to set a KGI to something vague like “increase sales.” But you always have to define how much you want to increase sales by, so you have a clear goal. The whole point of KGIs and KPIs is to have a metric to evaluate your success in relation to your goal, so let’s set them exact amounts and deadlines to make it possible.



2. Don’t break down your KGI into too many KPIs.
When you set too many KPIs, the process from start to finish becomes too complicated, and you won’t be able to properly track every metric. As for the right number of KPIs, set enough so that you can check them every day without feeling overwhelmed.



When drawing your KPI tree, follow one of the logical thinking cyprus telegram number database principles, MECE, which stands for "mutually exclusive, collectively exhaustive". This means that you need to make sure that none of your KPIs overlap, so you don't track any information twice, but at the same time you can't omit any important data, so include all essential areas that are relevant to the final KGI.

In the KPI tree, each level of KPIs should be connected to the next level in a cause-and-effect relationship. For example, for a smartphone app vendor, if their ultimate goal is to improve retention, then the appropriate KPIs would be login rate or number of shares.

Summarize


By setting up KGIs and KPIs correctly, you can objectively measure how successful you are in achieving your business goals. Massive goals like taking the number one market share in your industry may seem far away, and you may not know how to achieve them. But by using the KGI/KPI concept or the OKR model, you can break down these huge goals into smaller actionable steps so that you get closer and closer to achieving them. As for the next step, try to figure out the ultimate goal you want to achieve in the next few years, and the KPIs that can be used to measure your progress with the KPI tree.