Key Performance Indicators, 4th Edition

CHAPTER 3Background to the Winning KPI Methodology

Overview

Organizations often begin to develop a KPI system by immediately trying to select KPIs without the preparation that is indicated in the three-stage Winning KPI Methodology. This chapter provides an overview of the three stages and discusses the seven foundation stones that need to be laid before we can successfully develop and utilize key performance indicators (KPIs) in the workplace.

I explain the seven foundation stones, which are: (1) partnership with the staff, unions, and third parties; (2) transfer of power to the front line; (3) measure and report only what matters; (4) only source performance measures from the critical success factors; (5) abandon processes that do not deliver; (6) appointment of a home-grown KPI team leader; (7) organization-wide understanding of the winning KPIs definition.

Key learning points from the chapter include:

1. The three stages of the winning KPIs process
2. The seven foundation stones of the winning KPIs process
3. Empowerment of the organization's employees, particularly those in operations, is vital to the success of a KPI project
4. Each measure should have a linkage to a success factor or critical success factor
5. The main purpose of performance measures is to ensure that staff spend their working hours focused primarily on the organization's critical success factors
6. Importance of Peter Drucker's advice on “Abandonment” and “Never give a new job to a new person”
7. Implementing the Winning ...