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[zz]11 Powerful KPI Insights



11 Powerful KPI Insights

by Stacey Barr, Performance Management Specialist,
Stacey Barr Pty LtdWednesday, March 24, 2010

The greatest management thought-leaders in the world insist that
measuring the performance of your business or organisation is
essential to its succeeding. There are no qualms about that. If you
want to improve the performance of your business (or anything), you
must measure performance.

Fewer and fewer managers are struggling with this premise, that you
have to measure performance to manage it. But what they do struggle
with is how to do measurement properly. These eleven insights will
guide you to improve how you do go about measuring performance.

Insight 1: Only measure what you’re going to do something

Don’t measure just because you can, just because you always have,
just because you’ve got the data, just because someone says to.
Measure only the results you are going to give your time to improving,
by “working on the business, not just in it”.

Insight 2: Measure drivers, not just outcomes.

It’s great to know how profitable your business is, or how well
you’ve kept to budget, or how happy your customers are. It’s at least
as important to know also what operational results have the most
influence over these outcomes. It’s those drivers that you can do
something about, to get the outcomes you want. You can’t influence
outcomes directly. So find the drivers, and measure them too.

Insight 3: Measure not what you can control, but what you can

No-one really has control over anything other than their thoughts. We
do have a lot of control over what we do, but even extraneous factors
can limit that control too. If we only measured what we could
control, we’d be measuring useless things. So expand your thinking to
what you can influence, and you’ll find yourself measuring much more
meaningful results. Remember, your target doesn’t have to be 100%.

Insight 4: Measures impervious to change are useless.

Why do call centres continue to measure the number of calls received?
It’s not a performance measure – it doesn’t measure how well the call
centre is performing. It just tells them how many calls they’re
getting. And even if they could change this number in some way, what
kind of change would reflect an improvement anyway? Measure only the
results you know you can (and should) change for the better.

Insight 5: It is essential that your measures conflict with
one another.

Everything is about balance. Cycle time versus quality, profit versus
customer retention, employee satisfaction versus productivity. These
things are in conflict with one another, and that’s how it should be.
Management is about balancing the conflicts that are important, so if
your measures aren’t in conflict with one another, then you’re missing
essential information to manage.

Insight 6: Think like a marketer to engage people in

What do great marketers do? They capture people’s attention, they get
the right message across, and they influence people to act in a way
consistent with that message. Traditionally, we think of marketers as
selling products or services. But why can’t we use the same process to
sell performance measurement? Consider collaborating with your
marketing department, or learning more about marketing yourself, to
increase the engagement your colleagues have in performance

Insight 7: There is no “set it and forget it” with measuring

There is no set of industry standard performance measures you can buy
off the shelf, bolt onto your organisation or business, and then sigh
in relief that you’ve “done performance measurement”. Performance
measures are a reflection of the things that matter most, and the
things that matter most are a reflection of what’s going on in your
business and it’s environment. And in case you haven’t noticed, this
is constantly changing!

Insight 8: Reward people for local results AND
organisational results.

Reward people just for local results, and you’ll be encouraging them
to compete internally with other departments and teams and
individuals, or cause unintended consequences for them. Reward people
just for organisational results and you’ll be frustrating them with
the expectation to influence results they can’t directly influence.
Reward people for both local results and organisational results and
collaboration across traditional organisational boundaries toward
common goals is what you’ll get.

Insight 9: Use data and not opinion to determine causality.

Sitting around the meeting room table to discuss an increase in error
rates (or cycle time or costs or whatever), everyone’s got an opinion
about why. We’re so quick to find solutions that we often forget to
define the problem properly. A proper cause-effect analysis has to
involve scoping potential causes and using data to determine which are
the most influential causes.

Insight 10: Measuring performance is not a tool, it’s a way
of life.

If you’ve been interested in performance measurement for more than a
few months, you’ve probably already discovered that it’s not all about
numbers and data. Mostly it’s about culture, a culture of
results-orientation, feedback, learning and continuous improvement.
It’s not enough to learn the tools and steps of performance
measurement, you need to live the philosophy.

Insight 11: Performance measurement requires humility and
transparency to work.

Ego, fear, arrogance, carelessness and sloppy thinking lead to
performance measurement attempts that fail because bad results are
swept under the rug, data is manipulated, only good results are
measured, and any kind of objective evidence is ignored in favour of
intuition and experience. Those who are humble will learn from the
valuable feedback measures offer, and those who aren’t afraid of
transparent feedback will turn their performance measures into
performance improvement.

About the author:

Stacey Barr is a
specialist in organisational performance measurement, helping
corporate planners, improvement officers, business analysts and
performance measurement officers confidently facilitate their
organisation to create and use meaningful performance measures with
lots of buy-in.
Sign up for Stacey’s free email tips at
and receive a complimentary copy of her renowned e-book
“202 Tips for Performance Measurement”.

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