Key performance indicators are not just numbers, but tell a data based story.
Ideally, a way the key performance indicator is measured needs to be an accurate reflection of the attitude and behavior the organization is looking to exhibit. The challenge for performance measurement is that they sometimes need a number of measures around the same issue to gain a complete picture. Thus, it’s important to select the appropriate key performance indicators and measure them in the right way.
C-level executives’ follow up of key performance indicators at the strategic level: The firm's C-Level reports establish the firm's vision, true north direction, and build strategic goals that are needed to deliver the desired outcome. Each of the key strategies becomes the responsibility of a specific C-Level executive. All indicators must be related to the outcomes identified in the organization's strategic plan.
As strategies are invariably cross-functionally, the corporate executives must work with cross-functional teams to ensure their strategy is implemented and evaluated smoothly. The effective way to track the achievement of strategic goals is to cascade those down throughout the organization with the use of fine-tuned key performance indicators to reach high performance results.
Operational metrics are not in conflict with strategic objectives or with each other among different functional groups: In order to implement corporate strategy, organizations manage a balanced portfolio of business initiatives for “running, growing and transforming.” Strategic-operational KPIs alignment gives the organization a powerful tool to use when implementing strategy. Lower level operational metrics nearly always fall hierarchically under some higher-level corporate goal, such as multifaceted business value, quality, customer satisfaction, time to market, innovation, treatment of employees, etc. Related operational KPIs include:
-Time schedule, cost and budget: Are tasks being completed on time? Are the business initiative expenses occurring as expected? Are the right projects being done for the right cost?
Quality, risk management: Are issues being resolved appropriately? Are risks being managed, mitigated and addressed? Are defects being found as expected?
Key performance indicators definition and continuous evaluation: The more metrics you have, the more difficult it is to tell which performance indicators are important for driving business performance and signaling success. It is important to ensure that key performance indicators are aligned to the overall strategy and operations of the business; Identifying the “critical few” metrics is important because this helps to bring clarity, alignment and focus on what is important.
C-level executives’ follow up of key performance indicators at the strategic level: The firm's C-Level reports establish the firm's vision, true north direction, and build strategic goals that are needed to deliver the desired outcome. Each of the key strategies becomes the responsibility of a specific C-Level executive. All indicators must be related to the outcomes identified in the organization's strategic plan.
As strategies are invariably cross-functionally, the corporate executives must work with cross-functional teams to ensure their strategy is implemented and evaluated smoothly. The effective way to track the achievement of strategic goals is to cascade those down throughout the organization with the use of fine-tuned key performance indicators to reach high performance results.
Operational metrics are not in conflict with strategic objectives or with each other among different functional groups: In order to implement corporate strategy, organizations manage a balanced portfolio of business initiatives for “running, growing and transforming.” Strategic-operational KPIs alignment gives the organization a powerful tool to use when implementing strategy. Lower level operational metrics nearly always fall hierarchically under some higher-level corporate goal, such as multifaceted business value, quality, customer satisfaction, time to market, innovation, treatment of employees, etc. Related operational KPIs include:
-Time schedule, cost and budget: Are tasks being completed on time? Are the business initiative expenses occurring as expected? Are the right projects being done for the right cost?
Quality, risk management: Are issues being resolved appropriately? Are risks being managed, mitigated and addressed? Are defects being found as expected?
Key performance indicators are a combination of leading, lagging, financial and non-financial indicators, to reflect both well-performing activities and those that need to improve. Keep key performance indicators relevant, but do not revise the Key performance indicators unnecessarily and risk losing the ability to evaluate performance over time objectively.
Key performance indicators are not just numbers, but tell a data based story. The organization that didn’t have a systematic approach to measurement and analysis has a giant blind spot that is impairing their business performance and effectiveness. At the strategic level, performance management should connect multidisciplinary management dots to tell the full story with the business context, and ensure the business as a whole is superior to the sum of its parts.
Key performance indicators are not just numbers, but tell a data based story. The organization that didn’t have a systematic approach to measurement and analysis has a giant blind spot that is impairing their business performance and effectiveness. At the strategic level, performance management should connect multidisciplinary management dots to tell the full story with the business context, and ensure the business as a whole is superior to the sum of its parts.
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