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Gail Stout Perry Gail Stout Perry

Gail is co-author of The Institute Way. With a career spanning over 30 years of strategic planning and performance management consulting with corporate, nonprofit, and government organizations, she enjoys speaking, training, and writing, sharing her experience with others. She currently is the Chief Strategy Officer and VP Americas for Corporater.

The Four Things I Wish I’d Known - Part 3

By: Gail S. Perry

Oct 15, 2018 3485 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

KPIs Are Essential (But Know Your Audience)

I wanted to sink into the conference room floor. I was so embarrassed and was convinced that I must have just asked the stupidest question in the world. To this day, I cringe at the memory of standing there, in front of the entire leadership team at a prestigious, world-renowned, non-profit organization, while the entire team stared blankly at me. I was well into the second decade of my consulting career and was accustomed to taking on major projects. This time, I’d been asked to design a dashboard of metrics for this organization.  I’d gathered the heads of all functions and departments to explain the purpose of the project, their roles as stakeholders, and then, poised to write responses on the whiteboard, I asked the question: “Can each of you tell me what three to six key metrics you use (or would like to us) to manage your part of the organization?” My thinking was that this would give us a quick and rough outline of what metrics mattered most to the people who ran the organization – these same people who were now staring at me. Finally, one gentleman spoke up and said, “I believe this is what we hired you to do – don’t you know what metrics we should use?”  

Fast forward another decade and I have a lot more KPI experience under my belt and I’ve worked with dozens of major organizations on performance management as well as implemented KPIs for my own use in managing an organization. And in hindsight, I now realize that the managers who were staring at me should have known their key processes and value drivers and been able to articulate what they were trying to accomplish and how to measure it.

I have since learned that there are two kinds of managers/leaders. Those who operate at a tactical level and those who see the full picture. The tactical managers keep very busy managing what Covey calls the whirlwind of daily operations. Some focus only on the day-to-day actions that are required of them.  Some are great at people skills. Some are more entrepreneurial and implement innovations, initiatives, and projects they feel are needed as they sense and respond to risks and signals at the tactical level. But after all these years, I see how these sorts of managers consistently fail to achieve meaningful long-term results. They perform well on daily operations, but few can achieve sustainable improvements in those operations.  And that is exactly what happened to every one of the managers in that conference room. They did their daily jobs well, but they couldn’t produce long-term results for the organization.  Within five years, all were replaced.

The other type of managers/leaders see the full picture of key processes and value drivers and they leverage KPIs to monitor and manage performance. They know KPIs (metrics) will enable them to better manage overall performance as well as to assess the impact of any innovations, initiatives, and projects. 
  
I’ve since learned that I didn’t ask a stupid question. I simply was asking it of the wrong sort of manager/leaders. I’ve asked that same question of the other type of managers and they rattle off metrics faster than I can write them down.  

I have learned to assess the audience first and be sensitive to the fact that not everyone knows about KPIs or how they enable managers with insights and power for improving performance. Some individuals may need some basic education about the topic, they may have a long change management journey to buy into the value and use of KPIs, and they most likely will need coaching help to figure out their key processes and value drivers, as well as how to determine appropriate KPIs to use.  

It’s not rocket science. To some of us, it is simply common sense. But not everyone is wired this way.  We are all born with different natural tendencies so I’ve tried to learn to keep that in mind. And I no longer sink into the floor when someone stares blankly at me. I simply start asking more questions until we find common ground and then work forward from there.  

Read Part 2 of The Four Things I Wish I’d Known here. Read Part 4 here
Terry Sterling Terry Sterling

Terry is a Certified Balanced Scorecard Master Professional and the Training Manager and Senior Associate with over 30 years of experience working in both the private and public sectors.

A World Without Measures

By: Terry Sterling

Aug 29, 2018 3700 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
Welcome to a miserably hot, sweltering day at Yankee Stadium with the temperature sitting at 95° F in the shade and 90% humidity.  It’s the bottom of the ninth and the Yankees are down by three runs. A collective sense of expectation can be felt throughout the stadium as Didi Gregorius, who has 10 home runs already this season, steps back into the batter’s box with bases loaded and a full count.  Boston’s ace leftie, Chris Sale, with a 4-1 record and a 2.39 ERA going into the game, goes into his windup.  The pitch is a 99-mph split-finger fastball at the knees on the inside corner of the plate.  Gregorius swings, connects and the ball travels 420 feet clearing the center field wall by 12 feet; a grand slam and the Yankees win their 28th game of the season!

Rewind 
Welcome to another day at the empty lot where an unspecified number of people have shown up to play baseball. It feels hot, but since no one measures temperature no one is sure if it is any hotter than usual. The game is loose – the bases and fence are randomly placed, and the game continues until the players decide they are done, as no one tracks innings or measures time.  No one knows the score; no one counts strikes or balls; no one tracks how many runs or hits are made on a team or individual basis; much less  the type or speed of the pitch being delivered.  No talent is required to play because no one keeps track of how one performs; baseball statistics don’t exist. Alas, there is no excitement and no tension; no pressure to improve. No one loses or wins…pure UTOPIA!!
Measurements play a relevant part of our daily world, both in our personal and professional lives.  H. James Harrington summed it up like this, “Measurement is the first step that leads to control and eventually to improvement.  If you can’t measure something, you can’t understand it.  If you can’t understand it, you can’t control it.  If you can’t control it, you can’t improve it.”

Everyone uses measurements every day of their life and usually don’t even pause to give them consideration.  We all check the weather to see how warm or cold it is.  We use measurements to determine our budgets, how much money we need for vacations and how well our children are performing in school.  We calculate how many minutes we need to add to our workout routine to allow us to eat that extra piece of cake; how much we can afford to pay for things, and so much more.  Face it, life in today’s world doesn’t exist without measures!

What confounds us and causes confusion, missed opportunities and misguided, unproductive efforts is our inability and/or lack of experience in determining what measurements are key.  How do we determine how effective we are in achieving our desired goals and objectives, whether in our personal life or at work? How do we measure success and how do we know when we have achieved it?

The answer centers around the concept of developing Key Performance Indicators (KPI’s). The challenge is in developing and knowing what measurements are “Key” in determining the success of our performance and that of our organizations.

If you want to learn more about KPI’s and how to develop useful and meaningful measures for your organization, visit: http://kpi.org

Sources:
H. James Harrington Quotes.  Retrieved from: https://www.goodreads.com/author/quotes/42617.H_James_Harrington

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 7549 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.
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 14842 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.


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