Transcription
Transforming organisationaldevelopment with your KPIsOctober 2018Presented by:David o.nz
Measuring too muchTreating all measures as KPIsA tendency to rely on financial measuresDriven by the balanced scorecard methodologyRelying past (bottom of the cliff) measuresMeasures being linked to pay
We need KPIs to work and to sort out a lackof alignment
Why performancemeasures are notworkingHow you designgood measuresMyths ldevelopmentwith your KPIsOverview of thethree stageprocessWhat are KPIs& the two typesof measuresFinding yourorganisation’scritical successfactors
Stories Airline Freight forwarding company
KPIs are special – their characteristicsare: Non financialTimelyCEO focusSimpleTeam basedBroad impactLimited dark side
Two groupsof twoResult Indicators(Harry & Oscar)Measures that summarize the collectiveeffort of a wide number of teams. Some Icall Key Result Indicators.PerformanceIndicators(Annie & Eliza)Measures where the responsibility can betied down to a team or a cluster of teamswho work closely together. Some I call KeyPerformance Indicators.
The 10/80/10 ruleKey result indicators(Board KPIs)10Result indicators80Performance indicatorsKey performance indicators(Operational KPIs)10
Key result indicatorsReturn on capital employedCustomer satisfaction %Employee satisfaction %PastCurrentFutureKRIslastyearLastLastquarter monthLastweekYesterday& todayNextweekNextmonthNextquarter
KPIsPastCurrentKRIslastyearLastLastquarter monthFutureKPIsLastweekYesterday& todayNextweekNextmonthNextquarter
Definition of KPIsThey focus on the aspects or areas of ourorganisation’s performance that are critical orvital for our ongoing and future successSource: AusIndustry KPI Manual Late deliveries to key clientsStaff who will be under utilised next weekOutstanding job offers, over 24 hours oldResignations from key staff (in last hour)Unresolved key customer complaints (over 4 hours)
Please talk to theperson next to youabout the extent youagree with the KPIcharacteristics.
Sorting the wheat (KPIs) from the chaff(performance measures) More intellectual rigourbefore setting an indicator More abandonment, less isbetter than more Indicators split betweenKRIs, RIs, PIs and KPIs Greater alignment to theCSFs Greater focus
Where does this stand with you?15
Why performancemeasures are notworkingHow you designgood measuresMyths ldevelopmentwith your KPIsOverview of thethree stageprocessWhat are KPIs& the two typesof measuresFinding yourorganisation’scritical successfactors
Common critical success factorsRecruiting the rightpeople all the timeDelivery in full ontime, all the time toour key customersInnovation is adaily activityWe finish what westart
Cascading: beautiful in nature butdeadly with critical success factors
5 to 8 CSFsSFs have less linkages and less impact
Critical success factors “A list of issues or aspects of organisationalperformance that determine ongoing health,vitality and well-being” source AusIndustry The missing link to making your performancemeasures work
How strategy and the CSFs worktogether
Not knowing your CSFs is like Romaniagoing to the 2018 World Cup without agoal keeper!
Why performancemeasures are notworkingHow you designgood measuresMyths ldevelopmentwith your KPIsOverview of thethree stageprocessWhat are KPIs& the two typesof measuresFinding yourorganisation’scritical successfactors
The three stage process
Peter Drucker’s abandonment“Don’t tell me what you’re doing, tellme what you’ve stopped doing.”Management Guru Peter Drucker26
Stage 1: Getting the enterprisecommitted to the change & upskilling an in-house KPI team Senior management team commitmentEstablishing a "winning KPI" project teamEstablishing a "just do it" culture and processSetting up a holistic KPI developmentstrategy Marketing KPI system to all employees
KPI team structure
Stage 2:Ascertaining the operationalCSFsThree options to chose from:1. Attended by the oracles who are in the organization2. Run the two-day workshop as part of the executiveretreat3. Run the two-day workshop as a series of three-hourwebinars
Stage 3:Determining measures andgetting them to work Performance measures two day workshop Staff trained in what makes a good measure Staff ascertain measures from the CSFs
Reporting top of the cliff measures Understand bullet and spark graphs Use technology to convey need for action
Why performancemeasures are notworkingHow you designgood measuresMyths ldevelopmentwith your KPIsOverview of thethree stageprocessWhat are KPIs& the two typesof measuresFinding yourorganisation’scritical successfactors
Performance measurement myths
Rules for designing & wording measures “Top of the cliff” timely measures for managementDerived from the organization’s CSFsMeasuring the exception rather than everythingSort by result and performance indicatorsSort by past, current and future indicatorsLook for the unintended consequence
Rewording example #1 Original measure: Number of staff employeesuggestions received in monthThe improvement "Number of employee suggestions implementedby team” "Number of employee suggestions to beimplemented, next week/fortnight, by team”
Rewording example #2 Original measure: Number of staff with noformal systems trainingThe improvement "Number of employees trained onsystem (advanced technologyonly)”.
Rewording example #3 Original measure: Percentage of staff attendingscheduled trainingThe improvement : "List of scheduled training sessions in the nextthree and six months" “List of departments who have not registered staffto attend inhouse course”
P# of recognitions last weekby departmentFDate of next staffsatisfactionsurveyRecognition# of CEO recognitions planned next week/fortnightFList of resignations received todayfrom key staff# of safety initiativesplanned nextweek/fortnightPCStaff turnoverin past monthCompetitive remuneration(date of next review)FF# of incidents or near misses(immediate reporting)# of health relatedtraining to beorganised over thenext 1-2 months, 3-4monthsList of staff sick forover 2 weeksPF# of workplace improvements tobe implemented over the next 12 months, 3-4 monthsCFP# of implementations completedfrom last staff satisfaction surveyNames of sick staff with no‘back-to-work’ programmeP# of planned celebrations innext week/fortnightF
Suggested next steps for those whowish to start a KPI project Attend the two workshop 15/16 Oct Access my website for recorded webinarsand KPI keynote addresses Read the material I have prepared for you onwww.davidparmenter.com
Useful books
Visit my website www.davidparmenter.comfor some templatesPassword: digital era
Some I call Key Performance Indicators. The 10/80/10 rule Key result indicators (Board KPIs) 10 Performance indicators 80 Result indicators Key performance indicators . Setting up a holistic KPI development strategy Marketing KPI system to all employees. KPI team structure. Stage 2:Ascertaining the operational CSFs
