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David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Why World Class Performance Isn’t Measurable

By: David Wilsey

Nov 14, 2017 316 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
Let’s say our organization needs to buy a fleet of vehicles and we have two procurement teams. We tell team 1 that we want quiet, blue, four-door, fuel-efficient cars. We tell team 2 that we want world-class, high-quality, great-value, high-performing cars. Then we give both teams a few weeks to find their vehicles. Guess which team will be able to produce measurable results?

Team 1 will have the easier time, as it is clearer what is meant by the criteria provided. Team 2 will struggle because their criteria are too ambiguous. Without further clarifications, “world-class” could be interpreted to mean a hot rod sports car, a luxury sedan, or even a nice SUV. And if the team cannot agree on the specifically desired result, how can it measure success? 

This example demonstrates an important principle of good measure design. Before you can design a measure, you first must agree on what result you are trying to achieve. And not all results are created equal. Results written in abstract language are less measurable and harder to implement than those written in concrete language.

Abstract language refers to concepts or vague ideals. Examples of abstract words or phrases include sustainable, innovative, reliable, leadership, quality, effective, leverage, efficient, resilient, optimized, or responsive. Strategic plans are often littered with this type of language, as we aim to deliver best practices, thought leadership or world-class performance. These “weasel words”, as they are often called, are notoriously hard to measure without first translating into concrete terms. 
Concrete language is sensory-specific, meaning it describes things you can see, hear, smell, taste, or feel. Because they are observable, concrete results are measurable. Team 1 will have no problem determining the percentage of cars procured that meet their specifications. Concrete results are also more memorable and easier to implement. 

So if you are struggling to design measures for your organization, your first step should be to clarify what result you are trying to achieve, in concrete terms.

To learn more about developing concrete results or related measures, please look into one of our KPI training or certification programs or visit kpi.org.
Stacey Barr Stacey Barr

Stacey Barr is a specialist in organizational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures.

Creating Authentic Urgency for Better KPIs

By: Stacey Barr

Oct 10, 2017 589 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Complacency is a big reason why useless KPIs stay. A sense of urgency is what’s needed to spark the change to better KPIs. But it must be authentic, and speak to the head and the heart.

It’s not true that we want better KPIs just to improve the bottom line. But it can be quite hard to get managers and leaders to take better KPIs seriously, and adopt a KPI approach that truly works. So, linking to financial performance might just be the angle you need to take to put your KPI case forward.

Putting a number to the hidden costs of poor KPIs, and the lost opportunities of better KPIs, can create what John Kotter would call creating a sense of urgency.

But, we can’t be all head and no heart. It can’t be just about the cost of our current poor KPIs. It’s about how we feel about those poor KPIs too.

A manager of freight business, Marty, asked me to help him sort through his KPI mess. He told me he had too many KPIs and no information. We did a stocktake of what he actually had.

There were over 300 KPIs, many of which were different versions of the same measures. There were over 50 performance reports produced. And we estimated – very conservatively, mind you – that this was costing Marty over 1200 hours of effort every month. If the average hourly wage for a business analyst was $70, this is just over $1,000,000 a year.

More than $1,000,000 a year for information that’s neither useful nor usable is appalling.

Marty joked with me that he’d print a hard copy of every one of those 50 reports, and push them into the next management meeting, piled up in a wheelbarrow.

I wish he had done that. It would have been just the perfect way to bring the problem to life in both the heads and hearts of his management team. And much easier to create the sense of urgency that could spark a much-needed change. As Kotter says:

“Mindless emotion is not the point. Generally, the challenge is to fold a rational case directed toward the mind into an experience that is very much aimed at the heart.”

Have you ever estimated the cost you’re paying for your current KPIs?

If you are committed to the idea of better performance measurement, and you know that what your organization is doing now is wasteful and useless, there is something you can do.

Take a sample of areas of your organization. Maybe a sample of reporting analysts, or a sample of business units. And talk to them to get some rough but realistic numbers to estimate costs like these:

  • The cost of collecting data that’s not needed.
  • The cost of reporting information that’s not used.
  • The cost of making the wrong decisions with bad KPIs.
  • The cost of the time spent debating and reworking KPIs.
  • The cost of the missed opportunity to improve performance.

And why not try Marty’s wheelbarrow idea? March right in there with physical evidence of the problem and let people react to it. Let them feel it; the awkwardness, the shock, the realization. The undeniable need for change.

Forget about writing a detailed business case for a better KPI approach. Forget about educating people on what a good approach is. Forget about trying to retrofit tiny little ideas from a good approach to make micro improvements in your existing one. Forget about coercing, cajoling and compelling. These are a waste of time.

If you want to create an authentic sense of urgency, you need to be fact-based and visceral. And probably a bit daring and provocative. You need to be a bit of a story-teller. You need to feel the urgency, yourself. But not be beaten down by it: you must see a vision of life on the other side of it. And see it clearly enough that you can show it to others.

An authentic sense of urgency can unseat complacency toward KPIs, but it must be both fact-based and visceral.
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Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Learn about the bad habits that cause these struggles, and how to stop them, by taking Stacey’s free online course “The 10 Secrets to KPI Success” at www.staceybarr.com/the10secretstokpisuccess.

Stacey Barr Stacey Barr

Stacey Barr is a specialist in organizational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures.

Just Because Some KPIs Are Bad Doesn’t Make KPIs Wrong

By: Stacey Barr

Oct 3, 2017 404 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

KPIs have a bad reputation, from bad pasts experiences people have with them. But we can’t let their reputation become the truth about them.

Stephen works in the public sector in the UK, and was struggling with how to change the culture in his organisation, which is awash with unhelpful KPIs. No doubt there is a lot of cynicism and avoidance of measurement there.

And not nearly enough mastery.

Anders Ericsson’s Deliberate Practice research inspired Malcolm Gladwell’s proposition that 10,000 hours of practice brings mastery. But it isn’t quite that simple:

  • Firstly, the amount of practice can lead to mastery in a field where the rules and approach are clear and stable. Like carpentry, but not entrepreneurship.
  • Secondly, the quality of practice matters much more than the quantity. It must be regular and deliberate, not sporadic and distracted.

KPIs are more like carpentry than we might think.

There is a clear approach, and even some rules, that guide a logical and practical series of steps to create good KPIs. And the quality with which those steps are practiced does deepen the know-how and skill to create even better KPIs.

When I teach people the PuMP Measure Design technique (step 3 of PuMP’s 8 steps), we practice using a case study. The participants work in smaller groups of 5 or 6 people. Do you think they’d each end up with different measures for the same case study goals?

Well, over several years of using the same case study, with many hundreds of people, the amount of variation in the KPIs they design is incredibly small. A logical and practical series of steps creates good KPIs. And then the more that people practice Measure Design in their own work context (and we observe this on the 3rd immersion day of the PuMP training, as well as in private facilitation sessions), they get even faster at creating even better KPIs.

We can’t let the reputation of KPIs become the truth about them.

We need to lift the conversation above the current KPIs, and focus on the approach that produced them, and how well we implement it.

We’re too easily tempted to ask which KPIs to cull, where to find better KPIs, what to do to get people to own the KPIs. But there are some questions that are more important to ask:

1.    Do we have a KPI methodology? A REAL one?

2.    Are we following that methodology? All of it?

3.    Are we giving ourselves the time to learn it, practice it, and master it? Before judging it?

4.    Are we engaging more and more people in exploring and learning it? And rolling it out on the waves of that engagement?

Great KPIs only come when we master the method for creating them. But too often we don’t bother thinking about the method. We don’t have the discipline to use it. We underestimate what it takes to implement it properly. We push and rush to get KPIs out of the way, as quickly as possible.

Will you change that?

The reputation of KPIs is not the truth about them. Bad KPIs come from bad approaches and poor practice.
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Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Learn about the bad habits that cause these struggles, and how to stop them, by taking Stacey’s free online course “The 10 Secrets to KPI Success” at www.staceybarr.com/the10secretstokpisuccess.
Stacey Barr Stacey Barr

Stacey Barr is a specialist in organizational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures.

How Do You Measure The Impact Of An Initiative?

By: Stacey Barr

Sep 5, 2017 432 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Let’s get right to the point: if you have to ask how to measure the impact of an initiative, it means you got things back to front.

Asking “how do you measure the impact of an initiative” means you don’t already know what the measure is. Obviously. But it can also mean you don’t even know what the impact should be.

And that means you chose the initiative before you fully understood what you needed it for. Stay on this path, and you’ll end up wasting a lot of time, money, and angst.

What was the goal that needed the initiative?

Sure, you might have had a goal the initiative related to. But it was likely a vague goal. If it had been a clear goal, it would have been very easy to also find a good measure for. And in that case, the impact of any initiative you chose for the goal would be measured by the measure of the goal.

Say, for example, your goal was to “Reduce the amount of time employees spend doing rework”. You might even go a step further and define rework as time spent changing or re-doing something that wasn’t done right the first time. Then it’s super easy to see this could be meaningfully measured by something like the percentage of employee work hours that are spent on rework.

And, continuing the example, the impact of any initiative to reduce rework would be measured by the percentage of employee work hours that are spent on rework. The impact would be the difference in this measure before and after the initiative was implemented.

Measures come before initiatives.

If you don’t know how to measure the impact of your initiative, you’ve chosen the initiative way too soon.
You’ve set the initiative out of logical order. But it’s common to do such things, and you’ll see it happening in many planning processes. It goes something like this:

1.    Set a goal [usually weasely and immeasurable]

2.    Pick an initiative to achieve the goal [without first thinking about the cause or leverage]

3.    Set a target [usually something meaningless like ‘10% improvement’]

4.    Choose a measure [as an afterthought, many weeks later, sometimes even after the initiative has been implemented]

There is a more logical order to approach planning, so that initiatives fit in sensibly and make the right impact (more detail here):

1.    Set a goal and make it easy to understand and measurable

2.    Design a meaningful measure as evidence of how much the goal is happening

3.    Set a sensible target for the measure to express how much improvement will mean the goal is achieved

4.    Analyze the business process that most impacts on the measure and find out the biggest cause that stops it performing at the target level

5.    Set an initiative that will mitigate this cause

6.    Implement the initiative in a way that isolates its impact.

Setting initiatives isn’t about jumping through planning process hoops. It isn’t about justifying our pet projects. It’s about spending resources as wisely as possible to reach specific goals.

We might need to practice non-attachment.

Following the second process, above, for aligning initiatives to measures and goals can often reveal that some initiatives are irrelevant or lame and will waste lots of time and money. And even if it stings our egos a little bit, it’s better to know that now, before all that time and money and angst goes to waste. And makes no difference that matters.

If you don’t know how to measure an initiative, you chose the initiative too soon.
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Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Learn about the bad habits that cause these struggles, and how to stop them, by taking Stacey’s free online course “The 10 Secrets to KPI Success” at www.staceybarr.com/the10secretstokpisuccess.
David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Types of KPIs: The Logic Model and Beyond

By: David Wilsey

Jun 5, 2017 3703 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

As part of the KPI Basics series of content we are developing as part of the launch of the KPI.org website, I thought I would introduce the different types of key performance indicators (KPIs). As I describe in the accompanying video, like to use a framework called the Logic Model to describe the first four types.

The Logic Model is a framework that is helpful for differentiating what we produce from what we can only influence. It is also helpful for separating between elements that are more operational versus those that are more strategic in nature. For every key process, we spend resources like time, money, raw materials and other inputs. Then every process has measurements that could be tied to that particular process. The outputs of my process are what we produce. Ultimately though, I want to create an impact with my work. Outcomes capture that impact.

Let’s look at some examples of these types of measurements in real life. If I am a coffee maker, my Input measurements might focus on the coffee, the water, or my time invested. My Process measures could have anything to do with the process of making coffee, from the efficiency to the procedural consistency. The outputs of my process would be the coffee itself. I could have a variety of measures around the quality of my coffee output. Finally, my outcome measures would be related to things I can only influence, such as if my audience enjoys or buys the coffee. There is certainly more value in measuring impact than there is operations. If my customer enjoys the coffee I am doing something right. But you really do need a mix of both to truly understand performance.

To fully understand all of the elements of strategy execution, I can then add a few other broad categories of measures to my story. Project measures monitor the progress of our improvement initiatives and projects and can be designed to improve operations or strategic impact. These track things like scope, resources, deliverables or project risk. In my coffee example, I might have a new branding campaign to sell my coffee.

Employee measures tell us if employees are performing well or have the right skills and capabilities needed. I might measure my employees’ skills in making coffee, for instance.

Finally, risk measures tell us if there has been an important change in a risk factor that could have a significant impact on our organization. For example, I might have a risk indicator that tells me if global coffee bean availability becomes a problem. 

The information that these different types of measures provide can be used to inform decision making. Using a family of measure like this can broadly inform your entire strategy.

To learn more about Key Performance Indicator development and implementation, please look into one of our KPI training or certification programs or visit kpi.org.

Stacey Barr Stacey Barr

Stacey Barr is a specialist in organizational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures.

How to Make Sure Your Targets Match Your Measures

By: Stacey Barr

May 24, 2016 257 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Most performance measures or KPIs will have targets. After all, we have them to focus us on improving performance. But that focus can fracture if we don’t take care in how we express our measures and our targets, so they speak the same language.

Nerida (not her real name) emailed me this question:

"We have a measure “Number of staff with excess recreation leave balance” with a target of “90% of staff with no excess leave accrued”. Can the measure and target be like this or should they speak literally the same language?"

This is a very common situation. I see it in at least half of the strategic plans I look over. The targets are expressed in a language that doesn’t match the measure.

In Nerida’s case, the measure is focused on staff with excess recreation leave. But the target is focused on staff without excess leave. What’s more, the measure is a count but the target is a percentage. This won’t do.

It’s unnecessarily messy.

When people read the measure and the target, they’ll baulk at the inconsistent focus. This is distracting and confusing, and it erodes some of the credibility of measurement as a tool to inform decision making.

Clean up the mess by matching the units and the direction.

Nerida’s measure and target can easily be made simpler, clearer, and more credible by aligning two important features of measures and targets. The first feature is the units of measurement. Both her measure and target should be either a count, or a percentage. The second feature is the direction of improvement. Both her measure and target should focus on either staff with excess leave, or staff without excess leave.

So measure and target could be expressed more consistently this way:

Measure Name: Staff Without Excess Recreation Leave

Measure Description: Number of staff with no excess recreation leave balance, as a percentage of all staff

Target: 90%

A good formula to use, to express a measure and target.

Notice how the improved measure and target combination is written, above. There is a deliberate measure name, just a few words that capture the gist of the measure. Then there is a measure description, which fleshes out the quantitative method for computing the measure. And then the target is simply expressed as a number, in units that match the measure’s quantitative method.

The only thing missing in Nerida’s example, which I’d suggest you add, is a timeframe or date by which the target is to be achieved by. Or even perhaps, setting a target trajectory.

Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Learn about the bad habits that cause these struggles, and how to stop them, by taking Stacey’s free online course “The 10 Secrets to KPI Success” at www.staceybarr.com/the10secretstokpisuccess.
David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

What I Learned About KPIs from My Six-Year-Old

By David Wilsey

May 19, 2016 7479 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
I arrived to pick up my daughter on the last day of art camp just in time for program evaluations. Since we at the Balanced Scorecard Institute (BSI) use evaluation data for course improvement, I was intrigued to watch a room full of six- to nine-year-olds randomly fill in bubbles and then quickly improve their scores when the teacher noted that if any of the scores were less than three they’d have to write an explanation. 

In the car on the way home, I asked my daughter why she rated the beautiful facilities only a 3 out of 5. She said, “well, it didn’t look like a porta-potty. And it didn’t look like a palace.” She also said she scored the snack low because she didn’t like the fish crackers and wished they’d had more pretzels. As I giggled at the thought of some poor City program planner or instructional designer trying to make course redesign decisions based on the data, I reflected on the basic principles that we try to follow that would have helped the city avoid some of the mistakes they had made. 

The first is to know your customer. Obviously, giving small children a subjective course evaluation standardized for adults was ill advised. Better would have been to ask the students about their experience using their language: did they have fun? Which activities were their favorite? Which did they not like as much? 

Further, the children aren’t really the customer in this scenario. Since it is the parents that are selecting (and paying for) the after-school education for their children, their perspective should have been the focus of the survey. Were they satisfied with the course curriculum? The price? The scheduling? Would they recommend the course to others?

Another important principle is to make sure that your measures provide objective evidence of improvement of a desired performance result. My daughter’s teacher used descriptive scenarios (porta-potty versus palace) to help the young children understand the scoring scale, but those descriptions heavily influenced the results. Plus a child’s focus on pretzels versus crackers misses the mark in terms of the likely desired performance result.

Similarly, it is important not to get fooled by false precision. Between some participants superficially filling in bubbles and others changing their answers because they don’t want to do any extra work, the city is simply not collecting data that is verifiable enough to be meaningful.

These might seem like a silly mistakes, but they are common problems. We have had education clients that wanted to measure the satisfaction of a key stakeholders (politicians and unions) while ignoring their actual customers (parents and students). We see training departments that measure whether their participants enjoyed the class, but never ask if their companies are seeing any application of the learning. And we see companies making important decisions based on trends they are only imagining due to overly precise metrics and poor analysis practices.

Even the evaluations for BSI certification programs require an explanation for an answer of 3 or less. I wonder how many of our students ever gave us a 4 because they didn’t want to write an answer. I have also seen evaluations go south simply because of someone’s individual food tastes.

At least I can take solace in the fact that no one ever compared our facilities to a porta-potty.
David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

How Did I Get an MBA Without Learning This?

By: David Wilsey

Mar 24, 2016 6221 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
Business Woman in classMost MBA programs pride themselves as being the ”practical” degree that will best prepare its students for any number of management roles. And I have to admit that I can point to that degree as a true turning point in my career. But it wasn’t until I became a Balanced Scorecard Professional (BSP) that I learned several principles that I have found to be key to being a good manager and leader.

  1. Help your team articulate a shared vision
    Many managers and leaders think that the key to success is to have a clear vision. But vision that is poorly articulated (or not at all) is just a dream. And simply dictating the vision to employees usually doesn’t work either. Change doesn’t happen because “I said so” or by assigning tasks without any context. Employees engage when they understand what we are trying to accomplish and why. Shared vision and change management happen through dialog, facilitation, and the development of a logical business case.

  2. Connect the dots between what employees are working on and desired outcomes
  3. A good supervisor makes sure that employees are completing their tasks. A good leader makes sure that employees are working on and completing tasks that move the organization toward a shared vision of the future. BSPs have been taught to articulate the difference between mission, vision, and strategy. They know how to organize their energy, measurements, and initiatives around a set of coherent strategic objectives. They know that many people are visual learners and so they use a strategy map to communicate how the dots connect. They know how to align department objectives with high level strategy and communicate to employees where they fit.

  4. Measure results (not just actions)
    Most managers know to measure project milestones as indicators of success, and unfortunately many strategic planners use this basic principle for KPI development. They define a handful of goals (e.g. Improve Brand Awareness), list all of the projects needed to reach those goals (e.g. website redesign), and then measure the completion of those projects as a measure of success (e.g. percentage of website redesign completed). Good leaders measure results. A redesigned website is nice, but I should be much more interested in whether or not it led to improved brand awareness.

  5. Develop strategy before KPIs
    The best KPIs in the world won’t help if they are designed to measure a half-baked strategy. The good news is that you don’t have to be a Steve Jobs-type visionary to develop an intuitive strategy by formally assessing your strategic situation and identifying a path forward using common methods like a SWOT, PESTEL, Customer Value Proposition, Blue Ocean Strategy, and other methods.

There are other such principles, such as how to identify drivers of future performance using Perspectives, how to use strategy to prioritize, how to set and reach reasonable performance targets, and many more. If you can think of any others, please add them in the comments section below.

If you are unsure about what a balanced scorecard or a Balanced Scorecard Professional is, please visit our website. 
David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

The Ultimate KPI Cheat Sheet

By: David Wilsey

Jun 9, 2015 12004 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
We’ve received a lot of interest in our new KPI Certification Program. In fact, one woman said she couldn’t wait until the first scheduled program offering. She also wanted to know if we had a handy list of the most important principles – she wanted a cheat sheet! So in the interest in tiding her (and others) over, below I have compiled a few of the most important KPI tips and tricks. There are many more of course, so if you think I’ve missed anything, please add them in the comments section below.

Strategy comes first!
A training student told me his organization is struggling to implement measures for brand equity, customer engagement, and a few others because they believed the measures didn’t really apply to their company. I asked him why they were implementing those measures if they didn’t seem to apply, and he said they had found them in a book. They had no strategy or goals of any sort, and yet somehow thought they had a measurement problem.  

KPIs found in a book of measures don’t necessarily mean anything in relation to your strategy.  If you don’t have a strategy and/or can’t articulate what you are trying to accomplish, it is too early for KPIs.

KPI Development is a Process
I am embarrassed to admit that the first time I facilitated the development of performance measures with a client, I stood in front of a blank flip chart and asked them to brainstorm potential measures. It was my first consulting engagement as a junior associate and the project lead had stepped out to take an emergency phone call. Even though I had a basic understanding of what good KPIs looked like, I couldn’t help the client come up with anything other than project milestones (“complete the web redesign by August”), improvement initiatives (“we need to redesign the CRM Process”), or vague ideals (“customer loyalty”). What I didn’t understand at the time is that you need to use a deliberate process for developing KPIs, based on the intended results within your strategy. And like any other process, KPI development requires continuous improvement discipline and focus to get better.

Articulate Intended Results Using Concrete, Sensory-Specific Language
Strategy teams have a habit of writing strategy in vague, abstract ideals. As you pivot from strategy to measurement, it is critical that you articulate what this strategy actually looks like using concrete language that you could see, hear, taste, touch or smell. A vaguely written strategic objective like Improve the Customer Experience might get translated into checkout is fast, or facilities are safe and clean. Improve Association Member Engagement might get translated into a result of members volunteer for extracurricular activities. I’ve seen strategy teams shift from 100% agreement on vague ideals to diametric opposition on potential intended results, indicating that their consensus around strategy was actually an illusion.  Use simple language a fifth-grader could understand to describe the result you are seeking. If you spend your time honing this intended result, the most useful performance measures almost jumps out at you.

It’s not about the Dashboard!
Dashboard software is great when it is used to support a well-designed strategic management system. Unfortunately, many people are more interested in buying a flashy new tool than they are in understanding how they are performing (a topic I’ve talked about before). KPIs are not about a dashboard. KPIs are about articulating what you are trying to accomplish and then monitoring your progress towards those goals. A dashboard is the supporting tool and too much emphasis on technology misses and often distracts us from the point.

It’s not about the KPIs!
Speaking of people missing the point, we have many clients who think this process begins and ends with the KPIs themselves. Unfortunately, some of these folks are simply trying to meet a reporting requirement or prepare for a single important meeting. This type of approach completely misses the power of KPI development, which is that KPIs provide evidence to inform strategic decisions and enable continuous improvement.

For more about how to improve KPI development in your organization, see our KPI Professional Certification Program or The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Stacey Barr Stacey Barr

Stacey Barr is a specialist in organizational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures.

The 3 Signs To Say Goodbye to a KPI

By: Stacey Barr

Nov 25, 2014 214 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Hoarding is a disorder where people have incredible difficulty parting with possessions, or an incredible compulsion to acquire more possessions. They, and everyone close to them, drown in clutter. Are you a hoarder… of KPIs?

If you have too many measures or KPIs, and even a mild fear of letting them go in case you need them one day, then you might also be drowning in clutter: a clutter of data.

The problem with having too many KPIs is that you can’t really function with them all. It’s impossible to monitor them all, and too hard to know which are the priorities. You’re paralysed. You can’t make decisions.

Having too many KPIs is as bad as having none. It’s time to clean house. Here are three signs you can use to decide which KPIs to say goodbye to:

Sign #1: The KPI has reached its target and is staying there.

We measure specific results with KPIs because we want to improve those results. Now, while continuous improvement is certainly the philosophy that underpins good performance measurement, not everything should be improved forever.

If you have a KPI that has reached its target, and is now at a level of performance that isn’t a priority to keep improving (because there are other higher priorities to improve), it’s time to let it go. Otherwise, you’ll be wasting resources on gold plating that’s not needed.

Sign #2: Strategy has changed and the KPI no longer aligns.

If you do performance measurement well, then your KPIs will have a direct alignment to your strategic and operational goals. Some of those strategic or operational goals will change, as your organisation and its environment changes. So some of your KPIs will naturally change too.

Don’t be afraid to say goodbye to a KPI if it was designed for a goal that is no longer important. If you don’t, you’ll waste precious attention on results that don’t matter enough anymore.

Sign #3: The KPI turns out not to be as useful as expected.

We can master performance measurement but I don’t think we can perfect it. Consequently, we might design a KPI that sounded like a brilliant idea at the time, but later when we start using it, we realise it doesn’t have the power we hoped for.

Let that KPI go, so that it doesn’t mislead people. And if you need to, replace it with one that’s more useful.

What does saying “Goodbye, KPI” really mean?

I’m a believer in keeping historic data because it’s cheap enough to do it these days, and it can be a treasure trove for analysis in the future. Data doesn’t really take up space, like a KPI does in a performance report.

So, archive your KPIs, by retaining documentation of their definitions. You can do this in your corporate performance measure dictionary, marking the KPI as ‘archived’. Then take them out of your performance reports, and stop extracting the data to compute them.

Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Learn about the bad habits that cause these struggles, and how to stop them, by taking Stacey’s free online course “The 10 Secrets to KPI Success” at www.staceybarr.com/the10secretstokpisuccess.
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