KPI’s

MAKES IT TURN

Key Performance Indicators

Critical for any organization or structure is to set KPI's

KPI = indicator showing how far have you have succeeded in achieving your strategic objectives.

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Key Performance Indicators

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Vision Mission & Values

STRATEGY

Customers

Sales

Internal Business Processes

HR Development

KPI

KPI

KPI

KPI’s are the indicator showing how far have you have succeeded in achieving your strategic objectives

Guidelines on setting KPI’s

Formulating & Communicating KPI’s

The measure of success must show clear, specific and measurable performance indicators

The measure of success must be declared explicitly and in details, so it is clear what is being measured

The measure of success must be communicated through all of the organization

Regular communication is as critical as setting the KPI’s

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Guidelines on setting KPI’s

Does the settled KPI’s have a clear link with the strategic objectives of the organization?

Are the KPI’s and achievements under regular control?

What actions can be taken to improve the performance of the organization?

Are the KPI’s easy to explain?

Are KPI’s easy to manipulate?

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Relevant to Strategy

Control

Action

Simple

Credible

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KPI Dimensions

KPI Dimension

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Measures the ability to meet and/or exceed the requirements and the expectations of the customers

Measures employees output (units/ transactions /sales / vale), the uptime levels and how employees use their time – sales to assets ratio, revenue from new customers, sales in the pipeline

KPI Dimension

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Measures the time (hour, day, week, month) in which employee tasks are completed (on-time delivery)

Measures the overall effectiveness of the organization/structure in generating profits (Profit contribution by segments, by customers, by margin spreads)

KPI Dimension

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Measures how effectively the organization/structure leverages exiting business resources (sales per channel, conversion ratio)

Measures how effectively the organization/structure incorporates the quality control - best practices to streamline operational processes

KPI Dimension

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Measures the ability of the organization/structure to maintain competitive economic position in line with the industry (market share, customer retention, account penetration)

Measures how effectively the organization/structure achieves economies on scale and scope of work with its people, staff and practices to control operational and overhead costs (cost per unit, ext. )

KPI Category Dimension

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The comparison of the changes in performance of one value relative to the same value at different time (e.g. percentage change in sales vs last year )

The actual raw data values as measured (e.g. sales volumes)

KPI Category Dimension

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Multiple measures, such as standard deviation and variance that capture the spread and distribution of the performance (sales distribution by geography, by channel)

The addition of the weighed average of the several similar measures that result in an overall composite indicator of performance (customer satisfaction, survey results, focus groups and product returns/profitability)

So WHY setting KPI’s

They mirror your organization vision

They set goals on all organizational levels

They are based on legitimate data

They drive action

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Did you set the KPI’s for

your structure?

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