Many organizations that have operated with key performance indicators (KPIs) have found the KPIs made little or no difference to performance. In many cases this was due to a fundamental misunderstanding of the issues. Organizations often begin to develop a KPI system by immediately trying to select KPIs without the preparation that is indicated in the six-stage implementation plan. Like painting the outside of the house, 50 percent of a good job is in the preparation. Establishing a sound environment in which KPIs can operate and develop is crucial. Once the organization understands the process involved and appreciates the purpose of introducing KPIs, the building phase can begin.
In the first two editions of my KPI book I talked about a 12-step process that should be put into an organization with over 500 FTEs within a 16-week timeframe (see Exhibit 6.1). I also gave a shorter version with a six-week time frame for organizations with fewer than 200 FTEs where there is a motivated CEO and senior management team.