Lots of organizations out there spend an awfully lot of time measuring things. In some cases, they are tracking the right things that help them make better decisions and improve their business. In many other cases, they are measuring far too many things that have very little impact on the business. Join the Wily Manager guys this week as they talk about Key Performance Indicators (with the key word being “KEY”).
Monday’s Tip: Identify the Key Performance Indicators in Your Organization. Also differentiate them from your Key Result Indicators, and your Performance Indicators.
Tuesday’s Tip: Choose KPIs that people can act on. Your Return on Capital Employed may be an important metrics, but it doesn’t inspire action. Your KPIs should move people to action.
Wednesday’s Tip: Pick KPIs that are easy to understand. The most powerful measures are those that are crystal clear for people at all levels of the organization – not just those with accounting credentials.
Thursday’s Tip: Involve people at all levels of the organization to establish your KPIs. If you impose measures on others they will only accept them begrudgingly. If you can involve them, they will embrace them as their own.
Friday’s Tip: Connect your KPIs to your business strategy. Parmenter uses the example of On-time departure as a KPI for the airline industry. It is easy to understand, and very clearly connects to strategic drivers of cost, service, and brand.