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Key Performance Indicators: Developing, Implementing, and Using Winning KPIs by David Parmenter

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Chapter 2. Foundation Stones for Implementing Key Performance Indicators

The ultimate success of a change strategy depends greatly on how the change is introduced and implemented, rather than on the merit of the strategy itself. Successful development and utilization of key performance indicators (KPIs) in the workplace is determined by the presence or absence of four foundation stones (see Exhibit 2.1):

  1. Partnership with the staff, unions, key suppliers, and key customers

  2. Transfer of power to the front line

  3. Integration of measurement, reporting, and improvement of performance

  4. Linkage of performance measures to strategy

Four Foundation Stones for KPI Development

Figure 2.1. Four Foundation Stones for KPI Development

Four Foundaton Stones Guiding the Development and Use of KPIs

Partnership Foundation Stone

The successful pursuit of performance improvement requires the establishment of an effective partnership between management, local employee representatives, unions representing the organization’s employees, employees, major customers, and major suppliers. Implications of the partnership foundation stone include:

  • Recognition by all stakeholders that significant organizational and cultural change requires a mutual understanding and acceptance of the need for change and how it is to be implemented

  • Commitment to the establishment and maintenance of effective consultative arrangements with unions, employee representatives, and employees ...

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