kpi course slides

KEY PERFORMANCE INDICATORS MASTERCLASS

Towards the use of a rigorous KPI Management Framework

11th - 12th of November 2015 | Riyadh | Kingdom of Saudi Arabia

Adrian Brudan

General Manager TKI - EMEA, The KPI Institute

The Fairmont Dubai, 21st floor, Office 2103 – Suite 13

PO Box 119724, Dubai, United Arab Emirates

T: +971 4 311 6556 | M: +971 56 427 9177

E: adrian.brudan@kpiinstitute.com | W: www.kpiinstitute.org

CONTACT DETAILS

www.purposefulidentity.com

www.balancedscorecardreview.com

www.integratingperformance.com

Life.lab Building

Suite 606, 198 Harbour Esplanade

Melbourne Docklands, VIC 3008

Australia

office@kpiinstitute.org

+61 3 9028 2223

ADDITIONAL RESOURCES

KEY RESOURCES

At the core of smartKPIs.com is an

online catalogue of over 20,000 KPI

examples from 16 business

functional areas and 25 industries.

An online magazine containing more

than 1,000 articles on topics like

strategy, Balanced Scorecard, KPI,

organizational performance.

An online catalogue

illustrating the use of

corporate identity

elements in practice.

A platform for

integrating performance

management knowledge

at all levels.

The most

comprehensive online

resource dedicated to

the Balanced Scorecard.

RESEARCH

Top KPIs Reports by

Functional Area

54 Reports

Details at: http://kpiinstitute.org/publications/

Top KPIs Reports by

Industry

57 Reports

PUBLICATIONS

The KPI Dictionaries

3 Books

Certified Strategy and Business

Planning Professional

Certified Data Visualization

Professional

Certified Benchmarking

Professional

Certified Supplier

Performance Professional

Certified Customer Service

Certified Personal

Certified KPI Professional

Certified Performance

Improvement Professional

Certified Employee

Certified Data Analysis

Professional

EDUCATION

Source: The KPI Institute (2015)

EDUCATION

OUR CLIENTS

In-house training and advisory services

Telecommunications

Aviation

Chemicals

Utilities

Public Authority

Financial Services

OUR CLIENTS

Open Courses

Manufacturing Chemicals Public Authority

Aviation Healthcare Financial Services

PROFESSIONAL FORMATION

Professional Associations CertificationsAcademic

Economics | Business Administration | Performance Management

AGENDA

DAY 1 DAY 2

Introduction and

Context

Understanding KPIs

KPIs and Objectives

SettingKPI Selection

KPI Documentation

and Target Setting

Data Gathering

and Visualization1

7Learning

Assessment Quiz

Key learning points Case study Session review

Exercise Video References

LEGEND

LEARNING OBJECTIVES

• Differentiate between objectives, KPIs and initiatives;

• Apply best practice techniques to KPI selection;

• Understand KPI selection in different contexts;

• Document KPIs in a standardized template;

• Learn when and how to use benchmarking in target setting;

• Optimize the KPI activation and data gathering process;

• Enhance the use of data through effective data visualization.

AGENDA

Introduction and

Context1. Challenges in working with KPIs

2. The value added by KPIs

3. Organizational levels

4. KPI concept map

1. Identify main challenges in performance measurement;

2. Understand the role of business performance measurement systems;

3. Acknowledge 6 arguments to get buy-in for a KPI implementation project.

Key Learning Points

Which are the major challenges:

• You are interested in addressing?

• Your organization/ team is facing?

• Are relevant to the practice overall?

CHALLENGES IN WORKING WITH KPIS

51.26%

14.83% 13.88%10.09% 9.94%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Selecting the rightKPIs

Gathering data forKPIs

Documenting KPIsclearly andconcisely

Root cause analysis Decision makingbased on KPI

results

What is the most challenging aspect of working with KPIs?

CHALLENGES IN WORKING WITH KPIS

PERFORMANCE MEASUREMENT VS PERFORMANCE

MANAGEMENT

Performance Measurement =

evaluation and assessment of results.

1. Sub-process of performance

management

2. Focuses on the

identification of KPIs

tracking of KPIs

communication KPIs results

Performance Management =

taking action based on the results of the

evaluation to ensure targets achieved.

1. The overarching discipline that deals

with performance.

2. Reflects the approach one entity has

towards performance

3. Includes sub-processes such as:

The formulation of a plan

Actively monitoring

implementation

Readjusting the plan

Performance measurement

Capability development

THE VALUE ADDED BY KPIS

Clarity

Improvement

Communication

THE VALUE ADDED BY KPIS

CLARITY • Provide a detailed numerical view of which are the desired results aimed to be achieved

• Facilitate line of sight by mapping contribution to success across organisational levels

FOCUS • Convey what matters

• Convey what requires attention

IMPROVEMENT • Objectively evaluate the level of achievement of desired results

• Readily available data which accelerates corrective action initiation

ENGAGEMENT • Lead to a sense of ownership through responsibility and accountability

• Motivate in achieving better results

• Contribute to building a performance culture

COMMUNICATION • Provide common understanding of the numbers that matter

• Enables precise stakeholder communication

• Demonstrate interest and ability to use state of the art management concepts

LEARNING • Enable comparison of results in time, to reflect trends

• Identify opportunities by comparing to others

• Lead to a better understanding of the business

MAIN ROLES OF BPM SYSTEMS

Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007)

41% 41% 41%35%

29%24%

18% 18%12% 12%

6% 6% 6%

MAIN FEATURES OF BPM SYSTEMS

Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007)

29%24%

12% 12% 12% 12%

TERMS & TOOLS LINKED TO “PERFORMANCE”

Budgets

Communications

Dashboards

Discussions

Forums

Meetings

Objectives

Performance reviews

Projects

Reports

Rewards

Scorecards

Targets

Technology

Training

A better structure, alignment, integration

and use of what is already in place is the

answer to improve performance

management practices.

INTEGRATION OF TOOLS WITHIN A PERFORMANCE MANAGEMENT SYSTEM

Source: http://commons.wikimedia.org/wiki/File:Fleischwolf-zerlegt.jpg

Photo taken by: Kku, Modified by: Rainer Zenz

Organizational and Departmental Level

System Map

Desired State of Evolution

Strategy Map

Performance Scorecard

Organisational KPI Catalogue

Portfolio of Initiatives

Dashboard

Performance review meetings

Individual Level

Individual performance plans

Performance evaluations

Performance conversations

Personal Level

Personal performance

Performance reviews

SYSTEM INTEGRATION

ORGANIZATIONAL STRATEGY

INTEGRATED PERFORMANCE

MANAGEMENT SYSTEM

OUTCOMES

IDENTIFY PERFORMANCE MANAGEMENT TOOLS

Match Description No. Tool

90% 1 Goal

# Employees 2 KPI

% Patient satisfaction 3 Initiative

Patient Engagement Program 4 Metric

Deliver the first survey results by 30 July 5 Milestone

Develop the patient satisfaction survey 6 Mission Statement

Integrity 7 Program

Maintain high level of patient satisfaction 8 Objective

Opt 1.Provide best talent for the business / Opt 2.

Growth for the business9 Target

Quality 10 Task

To be the regional destination provider of innovative and

complex care, setting the standard in the field.11 Value Driver

Bi-annual patient satisfaction assessment 12 Value Statement

To provide medical care services at high quality

standards to the citizens of the state.13 Vision Statement

ORGANIZATIONAL LEVELS

Departmental

• Performance

expectations aligned to

departmental and

organizational objectives

Employee

Organizational

• Overall

organizational

objectives

• Departmental (operational) or sub-

departmental (team) processes, aligned

to organizational strategy

PERFORMANCE MANAGEMENT SYSTEM ARCHITECTURE

SYSTEM INTEGRATION

1. DESIRED STATE OF EVOLUTION

2. STRATEGY MAP

3. PERFORMANCE SCORECARD

4. PERFORMANCE DASHBOARD

5. KPI DOCUMENTATION FORM

6. KPI REPORT FORM

7. PORTFOLIO OF INITIATIVES

8. INITIATIVE DESCRIPTION FORM

KPI CASCADING

KPI MANAGEMENT FRAMEWORK CONCEPT MAP

KPI MEASUREMENT FRAMEWORK GOVERNANCE

Top Management

Department Department Department

Strategy / Performance Office

• Promote

• Support

• Design

• Implement

• Maintain• Assume

ownership of

targets

• Collect data

• Report data

KPI ARCHITECTURE SKILLS

Research

Analysis Synthesis

Software

MS PPT

MS XLS

Strategy Data visualization

Performance Measurement Architecture

Coaching

Communication

Facilitation

Technology Interpersonal

Performance

ManagementData

1. Most common challenge: KPI selection

2. Why use KPIs?

• Clarity

• Focus

• Improvement

• Engagement

• Communication

• Learning

SESSION REVIEW

• Franco-Santos, M., Kennerley, M., Micheli, P., Martinez, V., Mason, S., Marr, B., Gray, D. and Neely, A.

(2007), Towards a definition of a business performance measurement system, International Journal of

Operations and Production Management, 27(8): 784-801. Available at:

https://dspace.lib.cranfield.ac.uk/bitstream/1826/2789/1/Towards%20a%20definition%20of%20busines

s%20performance%20measurement%20system.pdf

Images:

• The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:

http://store.kpiinstitute.org/hr-performance-management-system-toolkit.html

REFERENCES

AGENDA

Key Learning Points

2 Understanding KPIs1. KPI related terminology

2. KPIs use case scenarios

3. KPI lifecycle

1. Define objectives, KPIs and initiatives according to terminology standards;

2. Identify the KPI lifecycle stages.

KPI RELATED TERMINOLOGY

• Key Result Areas

(KRAs);

• Key Performance

Indicators (KPIs);

• Performance

Indicators (PIs);

• Measures;

• Metrics;

• Key Result Indicators

(KRIs);

• Analytics;

• Evaluation criteria.

OPTION 2 KRAs KPIs PIs Measures

Metrics – to inform decisions

KPIs – to evaluate performanceOPTION 1

METRICS – KPIS- KRIS - ANALYTICS

Decision Making

Performance

Assessment

Measurement

Metrics

Analytics

METRICS

# Air temperature

# Air humidity

# Air purity

# Square meters per room

# Employees

# Highway kilometres

# Employee age

# Working hours per year

$ Budget

KEY PERFORMANCE INDICATORS

Source: Spider Strategies (2015)

% Net promoter score

% Budget variance

% Hospital bed occupancy rate

$ Revenues

$ Operating costs

# Patient consultation time

# Caseload per physician

KEY RISK INDICATORS

• Key risk indicators are metrics used by organizations to provide an early

signal of increasing risk exposures in various areas of the enterprise.

Objective: Manage the collection of accounts receivable to reduce loss due to write-offs

Key Performance Indicator (KPI) Key Risk Indicator (KRI)

Data about write-offs of accounts in most recent month, quarter,

Analysis of reported financial results for the company’s 25 largest

customers or general collection challenges throughout the industry

that highlight trends signaling future collection concerns.

$ Write-offs of accounts % Large customers in financial difficulty

Linking Objectives to Strategies to Risks to KRI’s

Profitability

Increase

Revenues

Reduce Costs

Strategic

Initiative #1

Strategic

Initiative #2

Strategic

Initiative #3

Strategic

Initiative #4

Potential Risk

Potential Risk KRI

Source: Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010)

ANALYTICS

Source: Google (2015)

Refers to extracting key information from large volumes of data in

order to:

• predict future trends

• identify patterns Support decision making

1. % Employee satisfaction

2. $ Turnover

3. Finalise project by 31 December

4. # Patients from referrals

5. # Employees

6. % Projects delivered on time and on budget

7. Quality

8. % Hospital bed occupancy rate

9. $ Budget

10. Increase market share to 28%

IDENTIFY THE KPIS

KPI Definition:

A measurable expression for the achievement of a desired level of results in an area relevant

to the evaluated entity’s activity.

(The KPI Institute)

TERMINOLOGY STANDARDS

Objectives

start with

$ = Value of

# = Number of

% = Percentage of

Initiatives

start with

Increase customer satisfaction

$ Revenue per clientCRM software

implementation

# Complaints received

% Customer satisfaction

“Corporate Goal 1 – To obtain profit before interest, taxes, depreciation and amortization (EBITDA) ≥

B/.1,110 million up to September 30, 2009.

Corporate Goal 2 – To establish a new pricing structure up to September 30, 2009 depending on the phases

established in the work plan.

Corporate Goal 3 – To provide a preliminary report of the Technical Cooperation Project up to September

30, 2009.

Corporate Goal 4 – To implement planned activities for the Third Set of Locks Project up to September 30,

2009, in compliance with the milestones of the established schedule.

Corporate Goal 5 – To make optimal use of the existing plant to meet transit demands, ensuring a service

level compliance average ≥ 85 percent.”

“Corporate Goal 6 - To adapt the organization through the improvement of the processes identified up to

September 30, 2009.

Source: Panama Canal Authority (2009)

ANALYZE PANAMA CANAL AUTHORITY

CORPORATE GOALS 2009

Corporate Goal 7 – To implement 100.0 percent the activities of the Sustainability and Corporate Social

Responsibility Action Plan scheduled for fiscal year 2009.

Corporate Goal 8 – To develop the Monitoring and Evaluation Plan for Sustainable Development and

Integrated Management of Water Resources for the Panama Canal Watershed up to September 30, 2009.

Corporate Goal 9 – To prepare a talent management plan and to provide a generational shift and to meet

emerging needs in the operation up to September 30, 2009.

Corporate Goal 10 – To improve the working environment ≥ 5.0 percent, measured by a satisfaction,

commitment and work climate survey up to September 30, 2009.

Corporate Goal 11 – To ensure that the Corporate Performance Index (CDI) is ≥ 100, up to September 30,

2009.”

Positive examples:

“Objective 1 - To increase profitability in a sustainable manner for the benefit of the

country.

Objective 2 - To expand the range of services and products.

Objective 3 - To enhance good corporate governance.

Objective 4 - To efficiently manage the volume and quality of the water resources of the

Panama Canal Watershed.

Objective 5 - To increase productivity through excellence in performance and the wellbeing

of human resources”

INTERDISCIPLINARY SYSTEMIC WORLDVIEW

KPI USE CASE SCENARIOS

Strategy Management

1 Organizational strategy

2 Organizational operations tracking

3 Departmental strategy

4 Departmental operations tracking

Interlink Level

5 Alliances / Joint ventures relationship scorecard

6 Portfolio management

7 Project management

Operations Management

8 Quality / process management

9 Service level agreements

10 Supplier performance management

Individual Performance 11 Employee performance management

Personal Performance12 Fitness training

13 Personal performance management

Evaluation

14 Sustainability performance reporting

15 Benefits realization management

16 General strategic / operations reporting

17 Audit

18 Compliance reporting (micro and macroeconomic level)

1. ORGANIZATIONAL STRATEGY

Context: Scorecards to monitor the achievement of strategy, through KPIs.

Positive aspects: KPIs are monitored in 5 perspectives: Financial, Customer, Operations and

People. Traffic lights are used to enable immediate understanding of performance data.

Recommendations: Link KPIs to more specific strategic objectives, not only to goals.

Comments: The scorecard contain some of the most important fields to track performance.

2. ORGANIZATIONAL OPERATIONS STRATEGY

Source: KPI Institute (2014)

Context: Dashboards to provide a more detailed overview of corporate performance.

3. DEPARTMENTAL STRATEGY

Context: Scorecards to monitor strategy at operational level.

4. DEPARTMENTAL OPERATIONS TRACKING

Source: Godrejinfotech.com (2010)

Context: Dashboards to offer visibility into key processes.

Positive aspects: KPIs

are visualized in both

tables and graphs with

the purpose to enhance

data meaning.

Recommendations:

Cluster KPIs around key

processes or activities.

Comments: The interactivity of the dashboard enables managers to access

different data sets with ease, supporting timely decision making.

5. ALLIANCES / JOINT VENTURES RELATIONSHIP

SCORECARD

Context: Scorecards to monitor performance of alliances or other business

partnerships.

Positive aspects: KPIs are linked to clear objectives established for the alliance.

Recommendations: Standardize KPI names and allocate a section to comment KPI results.

Comments: Key value drivers for the alliance were identified, such as relationship value or

strength that cluster the scorecard objectives and help managers focus on what matters the

6. PORTFOLIO AND PROJECT MANAGEMENT

Context: KPIs to monitor the performances in

terms of managing more projects.

Positive aspects: KPI results are displayed

through graphs, in the format of a dashboard.

Recommendations: Replace pie charts, with

more effective data visualization tools;

Comments: Dashboards are very useful in

managing a portfolio of projects as they provide

key information in order to ensure initiatives are

finalized on time, within budget and resources

are used efficiently.

7. PROJECT MANAGEMENT

Source: SmartKPIs.com (2015)

8. QUALITY / PROCESS MANAGEMENT

Source: Adapted from Oak Ride Institute for Science and Education (2005)

Context: KPIs to measure quality and compliance with standards, as well as to

support process optimization.

Positive aspects: Process

mapping is used to

standardize activities and

to support process

optimization.

Recommendations:

Establish KPIs to assess

the quality of processes.

8. QUALITY / PROCESS MANAGEMENT

Process improvement

Work Time (value

Before

Wait Time (non

value add)

Defects

Lead time

Inventory

Waste!

Capacity

Cash flow

Customer satisfaction

Customer responsiveness

On time delivery

Productivity

Profit

Quality

9. SERVICE LEVEL AGREEMENT (SLA)

Source: Texas State University (n.d)

Context: KPIs to ensure the quality of services delivered – whether is about third

party providers (suppliers) or internal providers (departments, divisions).

Positive aspects: Clear targets

are established for each

performance measure.

Recommendations:

Standardize KPI names for more

clarity.

Comments: Internal SLAs can

be used for both internal and

external providers.

10. SUPPLIER PERFORMANCE MANAGEMENT

Compliance with client requirements

Quality and severity of defects

The objectives of the engagement were achieved

Timely delivery schedule

Ability to meet interim milestones

Ability to complete work within agreed upon budget

Ability to control costs / Cost improvements over time

Value for money / Competitiveness of pricing

Provides effective and timely communication

Service and product delivery problems were quickly resolved

Documentation requirements / Understanding of business requirements

Innovative in helping delivering solutions

Understanding of the client’s business processes and practices

Understanding of the industry and market and how it applies to VG

Technical skills and experience

Personnel quality (i.e. independence and thoroughness)

Overall project management

Reasonable negotiations and contract, ease of doing business

Effective, accurate and efficient billing system

Flexible, accessible and responsive to inquiries

Overall satisfaction with vendor deliverables and services

Professional and cooperative behaviour with the client personnel

Work ethic, flexibility and responsiveness

c) 24 Indicatorsb) 8 Categoriesa) 3 Perspectives

Outcomes

Schedule

Budget

Communication

Value add/Innovation

Delivery capability

Responsiveness /

Account Management

Client satisfaction

Outcome performance

Delivery performance

Service excellence

Context: KPIs to monitor performance of supplier, for a streamlined supply chain.

11. EMPLOYEE PERFORMANCE MANAGEMENT

Context: KPIs and scorecards to evaluate performance of each employee in the

organization.

12. FITNESS TRAINING

Source: Body Media Fit (2015)

Context: KPIs to track performance of athletes.

Positive aspects: The

dashboard allows target

setting for KPIs and enables

you to visualize progress in

Comments: A clear

perspective on current fitness

performance contributes to

better planning workouts.

13. PERSONAL MANAGEMENT

Source: Felton, N. (2013), Annual report

Positive aspects: It provides an instant

overview upon the performance achieved in

several personal areas.

Recommendations: Structure the KPIs under

objectives and assign specific targets that

need to be attained.

Comments: Common personal areas to be

monitored are finances, household

management, professional development,

time management, social activity –

interactions with friends and family.

Context: KPIs to monitor personal achievements, to track daily activities, to

improve time management.

14. SUSTAINABILITY PERFORMANCE REPORTING

Source: Apple (2011)

KP Taxonomy 72

Comments:

Transparency in KPI

results can positively

contribute to brand

image.

Context: KPIs to assess the environmental impact of

activities. Results are presented in sustainability scorecards

or in dedicated performance reports.

Positive aspects: there is a trend in representing

performance data in annual reports through infographics.

Recommendations: Structure the KPIs under

sustainability objectives and outline specific targets that

are desired.

15. BENEFITS REALIZATION MANAGEMENT

Source: Western Australia Department of Treasury and Finance (2005)

Positive aspects:

KPIs are accompanied by

target values.

Recommendations: KPI

names should be

standardized.

Comments: benefits

realization management

through KPIs provides the

necessary visibility in

assessing investment

projects.

Context: Benefits realization is an important part of project management and

should rely on KPIs that clearly outline expected benefits.

16. GENERAL OPERATIONAL REPORTING

Source: Clebsch, B., Dougherty, J. D., and Anderson, G. (2004)

Recommendations:

Structure the KPIs under

sustainability objectives

and outline specific

targets that are desired.

Comments:

Operational reporting

must be focused on

providing essential data

for decision making.

Context: KPIs are commonly used by departments or teams to report the

performance of their activities.

Positive aspects: KPI results are accompanied by comments to facilitate

understanding of current performance level.

17. AUDIT

Source: Australian National Audit Office (2011)

• The checklist from the

example is used to

evaluates the KPIs used

by a set of organizations

to track if their projects

deliver the expected

outputs.

Context: KPIs can be used to assess the quality of the audit department, but also to

analyze how an organization is coordinated.

• The audit aims to

identify the mix

between qualitative and

quantitative KPIs and

whether they had clear

targets assigned.

18. COMPLIANCE REPORTING

Source: Ontario Buys (2010)

Positive aspects: KPIs are clustered on

different perspectives.

Recommendations: KPI names should be

standardized.

Comments: Reporting to governmental

institution can also serve for organizations

as a benchmarking technique if results are

published.

Context: KPIs are commonly used to report

compliance with regulations.

KPI LIFECYCLEKPI lifecycle – Stage 1

Establishment

KPI lifecycle – Stage 2

KPI lifecycle – Stage 3

Evolution

•Needs identification

•Selection

•Documentation

•Visualization

•Activation

•Analysis

•Reporting

•Decision making

•Communication

•Documentation refresh

•Data gathering

•Analysis

•Reporting

•Decision making

•Communication

•Documentation refresh

• Maintain

• Refresh

• Conserve/Suspend

• Supercede

1. KPI definition: a measurable expression for the achievement of a desired

level of results in an area relevant to the evaluated entity’s activity.

2. Terminology standards:

• Objectives - Verb

• KPIs - Symbols (#, %, $)

• Initiatives - Noun.

3. KPI lifecycle:

• Establishment

• Use

• Evolution

SESSION REVIEW

Understand

• Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010.), Developing Key Risk Indicators to

strengthen enterprise risk management: How Key Risk Indicators can sharpen focus on emerging

risks. Available at: http://www.coso.org/documents/COSOKRIPaperFull-

FINALforWebPostingDec110_000.pdf

• Panama Canal Authority (2009), Annual report. Available at:

http://www.pancanal.com/eng/general/reporte-anual/

• Panama Canal Authority (2013), Annual report. Available at:

http://www.pancanal.com/eng/general/reporte-anual/

Images:

• Google (2015), Google Analytics. Available at: http://www.google.com/analytics/

• Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-

dashboard-balanced-scorecard-software/

REFERENCES

AGENDA

Key Learning Points

3 KPIs and Objectives

Setting 1. SMART objectives decomposed

2. Leading vs lagging KPIs

1. Formulate SMART objectives

2. Differentiate leading and lagging KPIs in different contexts;

SMART OBJECTIVES DECOMPOSED

Objective

Target

• Increase market share

• % Market share

• By financial year end

• 28%

• Marketing Director

Option 1: Increase market share to 28% by the end of the financial year

under Marketing Director coordination.

Option 2:

OBJECTIVES SETTING

Value drivers Objective KPIsMission

Vision

Corporate

values

Initiatives

LEADING VS LAGGING KPIS

Source: International Association of Oil & Gas Producer (2011)

International Customer Management Institute (n.d)

Leading indicators = measure

things that address what can

create future value

Lagging indicators = look back at

past performanceVs.

• “outcomes, forward-looking

indicators”

Advantage:

• Being predictive allows the

organization to take better

decisions to address future

events.

Challenge:

• May be difficult to identify

and capture results.

• “measures events / incidents and consequences, retrospective”

Advantage:

• Easy to identify and to measure / collect results.

Challenge:

• Indicates past performance, does not reflect current activities.

• Cluster the following examples into leading and lagging

LEADING VS LAGGING KPIS

No. KPI examples

1 % Employee engagement

2 % Patients from referrals

3 % Patients satisfaction

4 % Market share

5 $ Profit

6 # Medical service lead time

7 % Staff with competencies at desired level

1. SMART objectives: Objective – KPI – Target – Time - Owner

2. Leading or lagging ? – depends on the context

SESSION REVIEW

• Australian Federal Government (2011), Department of Climate Change and Energy Efficiency annual

report 2010–11. Available at: http://www.climatechange.gov.au/about-us/annual-reports/annual-

report-2010-11

• Australian National Audit Office (1998), Better practice principles for performance information,

available at: http://www.anao.gov.au/Publications/Better-Practice-Guides

• Charted Accountants Professionals Canada (2010), Performance indicators. Available at:

http://www.camagazine.com/archives/print-edition/2010/march/regulars/camagazine34812.aspx

• International Association of Oil & Gas Producer (2011), Process safety – recommended practice on

Key Performance Indicators. Available at: http://www.ogp.org.uk/pubs/456.pdf

• International Customer Management Institute (n.d.), Leading and Lagging Indicators. Available at:

http://www.icmi.com/files/ICMILeading_LaggingIndicatorsExplained.pdf

• Public Record Office Victoria, Australia (2010), Strategic management guidelines: Key Performance

Indicators. Available at: http://prov.vic.gov.au/wp-content/uploads/2011/05/1010g3.pdf

• WACOSS (2011), Qualitative vs. quantitative data collection. Available at:

http://www.wacoss.org.au/CommunitySectorFundingReform/Resources/Fundingreformconsidering/

QualitativeQuantitative.aspx

• Western Australia Police (2005), General Audit. Available at:

http://www.police.wa.gov.au/LinkClick.aspx?link=PDFs/AR05_Performance.pdf&tabid=935

REFERENCES

REVIEW DAY 1 – CROSSWORD

Scenario

• You are split in teams, with the objective of finding out the

crosswords from the next slide.

• Identify the 10 words hidden behind letters from the next

slide;

• All words connect to the previous day key concepts.

REVIEW DAY 1 – CROSSWORD

A S L E A D I N G E T G G V D E R A C K B E K K G

Q T I L O S Z Q L I N D E C Q B C Q P P M K Q E D

A F O B J E C T I V E I A Q D M H R O I L R D Y C

A B O N A S O A R S N B B M D F N Q A S C V B I S

Q E Y P V B N M L Q H C G I L A A A L L H U J S C

W B H O A A S S G T Y S T N O L E Z C A X S C K D

X E N I C D V B M D P E R F O R M A N C E U I I F

C R M K O C V B K A U V E X S W E D X R T Y U N L

D V J M D A N M I O I I E V R Y T E O E G H J D O

Q E R T Y U I O P C Y N R E W Q R A S W V E R I U

D A S H B O A R D R N N R T C Y I Z X I V B N C T

A S C V B N M J H K D I X A A A C G H E K L O A R

I U Y T R E W Q S D G T J L F L F J H W F D S T E

A S C O R E C A R D I I P O C E T S R T D N G O W

C M N B V C U P O L U A T R A Q Y E L H G F S R Q

Q W E R T Y U I O P K T H L A G G I N G E S S D D

G F L A G G I N G W U I O P E L T J H G F D S A F

A S D F G L H Q A Z E V W C R V B N H G F D E W G

V B N M P L O I U Y R E W Q U W L I X A T I Z E H

• Apple (2011), Environmental responsibility. Available at: http://www.apple.com/environment/

• Australian National Audit Office (2011), Development and implementation of Key Performance Indicators to support the outcomes and programs framework. Available at: http://www.anao.gov.au/~/media/Uploads/Audit%20Reports/2011%2012/201112%20Audit%20Report%20No%205.pdf

• Body Media Fit (2015), Activity Manager. Available at: http://www.bodymedia.com/?whence=

• Clebsch, B., Dougherty, J. D., and Anderson, G. (2004), Management by fact: Benchmarking university IT services. Available at: http://www.educause.edu/ero/article/management-fact-benchmarking-university-it-services

• Felton, N. (2013), Annual report. Available at http://feltron.com/FAR13_11.html

• Godrejinfotech.com (2010), Products. Available at: http://www.godrejinfotech.com/godrej/godrejinfotech/offerings/products/sap/pro_sap_busiObj.html

• KPI Institute (2014), Human Resources Performance Management Toolkit. Available at: http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html

• KPI Institute (2015), Individual Performance Management Toolkit. Available at: http://store.kpiinstitute.org/individual-performance-management-toolkit.html

• Oak Ride Institute for Science and Education (2005), Performance measurement process. Available at: http://www.orau.gov/pbm/handbook/1-1.pdf

• Texas State University (n.d.), Global service level objectives. Available at: http://www.tr.txstate.edu/ser-cat/sc-object.html

• Western Australia Department of Treasury and Finance (2005), 2004-05 Procurement Reform benefits realisation report

REFERENCES

AGENDA

Key Learning Points

4 KPI Selection 1. KPI selection in practice2. KPI selection sources

3. KPI selection techniques

4. KPI selection criteria

1. Design a well structured KPI selection process;

2. Recognize useful KPI selection sources;

3. Deploy KPI selection techniques.

ALLOCATE KPIS FOR EACH OBJECTIVEFinancial

Increase profitability

Maintain financial discipline

Customer

Maintain high levels of patient satisfaction

Expand medical service reach

Internal Processes

Optimize facilities management

Improve patient waiting times

People, Learning & Growth

Nurture engagement, creativity and innovation

Develop workforce skills and competences

Ensure talent availability

No. KPIs list

1 $ Operating expenses

2% Employees meeting professional development

requirements

3 # Complaints from customers

4 # New patients

5 % Budget variance

6 # Innovation ideas

7 # Employee engagement index

8 # Training hours per full time equivalent (FTE)

9 % Market share

10 % Net profit margin

11 # Patient wait time

12 $ Net cash flow

13 % Hospital bed occupancy rate

14 # Positions filled

15 % Customer satisfaction

16 # Available beds

17 % Critical positions with succession plans in place

18 % Patients seen by the doctor within SLA

KPI SELECTION PROCESS AND TEHNIQUES

Scope clarifications

KPI expo

KPI clustering

Prepare for KPI selection

Facilitate the KPI selection

KPI selection workshop

Relevant questions framing

Value flow analysis

KPI balancing

KPI documentation

First performance review

meeting

Follow up on KPI selection

SCOPE CLARIFICATIONS

Defining what needs to be measured:

Channels the selection process on a clear path with

specified scope and outputs expected.

Objectives

Processes

Scorecard

Dashboard

KPI SELECTION SOURCES

Workshop

KPI Sources

External lists

Management

Industry

standards

Benchmarking

Competitors

Historical

Workshop

Compliance

KPI SELECTION SOURCES

INTERNAL EXTERNAL

• Strategic development plan

(3-5 years)

• Annual business / strategic

• Annual reports

• Internal operational reports

• Competitor review reports

• Printed catalogues

• Online catalogues

(http://www.smartkpis.com/)

• Annual reports of other

organizations (KPIs in

Practice)

• Front-line employees input

• Managers input

• Board input

• Suppliers input

• Customers input

• Expert advice

• Questions in discussion forums

KPI EXPO

• Collection, curation and presentation of relevant KPI

examples.

• Consolidating lists from external sources, like smartKPIs.com.

• Using internal sources to identify KPIs, like operational

reports.

Informs Educates Inspires

KPI CLUSTERING

Grouping KPIs in different categories:

• Balanced Scorecard perspectives;

• Objectives;

• Dashboard sections;

• Value Flow Analysis stages;

• Process steps.

• Enables alignment and identification of possible gaps.

KPI CLUSTERING

Scenario:

• You are part of the management

team operating in the healthcare

industry.

• The board asks you to present 5

KPIs you will be using to track the

performance of the organization.

• Write down 5 KPIs you would

recommend.

• Use one single post-it note for

each KPI (5 post-it notes per

team).

RELEVANT QUESTIONS FRAMING

• Focus on the importance and relevancy of context

Examples:

• What numbers will demonstrate the objectives achievement?

• What process are we going through and how long will it take?

• What will we learn from the data?

• What matters?

• So what?

RELEVANT QUESTIONS FRAMING

FAQsDuring the KPI selection

workshop

Questions to prepare in

case they are asked

What are the most relevant

sources for KPI selection?

How many KPIs should we

select?

What will we do with KPI

results?

What is the order of

importance in which the KPI

selection sources should be

analyzed?

What is the procedure for

validating the KPIs selected?

What efforts are required for

data gathering for each KPI?

Who should participate in

the KPI selection process?

What process are we going

through and how long will it

What will we learn from the

What is the ideal format for

KPI selection process?

What figures will reflect the

achievement of company

objectives?

How do we link KPI results

with bonuses?

What are the most relevant

criteria for the KPI selection?

What sort of data we need to

keep track of to ensure

informed decision making?

What are we trying to

achieve by setting up KPIs?

What matters?

VALUE FLOW ANALYSIS

• Logical model to indicate the value generation

from inputs, process outputs and outcomes.

• Gain insight into how the objective can be measured

from different perspectives.

• Provides an overview of the process involved by

achieving the objective.

• Enables the selection of the most relevant KPIs for the

objective.

VALUE FLOW ANALYSIS

Optimize

inpatient inflows

% Bed occupancy

% Bed turnover

$ Operating costs

$ Revenue per

INPUTS PROCESSES OUTPUTS OUTCOMESOBJECTIVES

# Medical staff

available

# Hospital beds

# Patients

discharged per

# Length of stay

INPUT METRICS

• Measure the quantity/quality of input resources to organizational

activities.

• Generally include: human resources, financial resources

infrastructure.

• Examples:

Human Resources: # Employees, # Physicians, # Clinical trial

implementation team

Financial Resources: $ Budget, # Grants, $ Bank loans

Infrastructure: # Medical equipment available, # Length of stay

Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334

INPUTS PROCESSES OUTPUTS OUTCOMES

PROCESS METRICS

• Measure the quantity/quality of the activities required to provide

certain expected outputs.

• Generally include: transformation in terms of time and utilization

rates.

• Examples:

Time: % On-time delivery vaccination, # Time to finalize task

Utilization: % Equipment utilization rate, # Ambulance response

OUTPUT METRICS

• Measure the quantity/quality of the goods or services created or

provided through the use of inputs;

• They generally include quantifiable results.

• Examples:

# Patients vaccinated

# Treatments delivered

# Surgeries performed

# Examinations completed

OUTCOME / IMPACT METRICS

• Measure the quantity/quality of the results achieved through the

provision of goods and services.

• They generally include: added value, impact.

• Examples:

Impact: % Incidence of disease, % Mortality rate

Added value: $ Savings generated by innovation ideas,

# Patient satisfaction index, % Net promoter score

VALUE FLOW ANALYSIS

Objective INPUT PROCESS OUTPUT OUTCOMES

Ensure population

immunization

$ Budget

# Doctors

% On time

delivery of

vaccination

programs

# Population

vaccinated

% Incidence of

disease

% Mortality rate

Maintain high

compliance levels

with regulations

$ Budget

# Audit team

# Time to

complete an

internal audit

# Non-

compliances

% Compliance

rate with

regulations

Provide effective

emergency

services

$ Budget

# Ambulances

# ER medical

staff available

# Time to reach

an emergency

% Patients seen

in < 15 minutes

after requesting

% Mortality rate

on emergency

# Innovation

champions in

each area

# Staff in the

innovation program

7$ Value generated by

innovation ideas10

% Innovation ideas

funded

2# Innovation

focus groups5

# Time to evaluate

an idea8

% Ideas evaluated within

the SLA target of 2 weeks11

% Innovation ideas

implemented

3 # Patents 6 $ Budget 9% Innovation ideas

evaluated12

% Innovation ideas

that generated value

Objective: Operate in an environment that fosters creativity and

innovation

VALUE FLOW ANALYSIS

Input Process Output Outcome

VALUE FLOW ANALYSIS

Scenario:

• Select one objective of your

choice.

Tasks:

• Write at least 2 input, 2

process, 2 output and 2

outcome metrics.

• Select from these metrics 2-3

KPIs to measure the

achievement of the objective.

• Propose 1-2 initiatives to

address the implementation of

the objectives.

KPI BALANCING

• Quality assurance technique consisting in

selecting at least 2 KPIs for the same objective.

• To avoid focusing on certain KPIs at the expense of

others.

• To provide a wider perspective upon actual

performance.

Write the correct KPI number under each objective, in order

to assure a balanced approach.

KPI BALANCING

FAs Objectives No. KPIsAmbulance

servicesA. Provide timely ambulatory services 1 # Surgeries conducted

2 # Flue cases

3 % Diagnosis accuracy

Surgery

servicesB. Ensure reliable surgery services 4 # Ambulances available

5 # Discharges per day

6 # Time to conduct a laboratory test

Facilities

managementC. Optimize inpatient flow 7 % Unplanned readmission rate

8 % Population vaccinated

9 % Ambulance reaching patients within SLA

Medical

laboratoryD. Provide timely and accurate diagnosis 10 % Post surgery infections

Preventive

healthcareE. Increase the citizens immunity

KPI BALANCING

Leading Lagging

# Incidents of non-compliance # Fatal accidents

# Training hours per FTE % Employees with competencies at desired level

Efficiency Effectiveness

$ New customers acquisition cost # New customers

# Call duration % First call resolution rate

Quantity Quality

# Maintenance requests resolved % Maintenance requests resolved within SLA

# Ideas expressed % Ideas implemented

Subjectivity Objectivity

# Patient satisfaction # Patient complaints received

% Net promoter score # Clients from referrals

Source: Heinrich, H.W. (1931)

KPI BALANCING

KPI SELECTION WORKSHOP

• Collective intelligence insights

• Learning

• Buy-in

• Clients

• Suppliers

• Employees

• Board

• Management

• Facilitators

KPI SELECTION WORKSHOP

Agenda

Topics

Context (60 minutes)

5 Agenda and meeting scope review

5 Needs review

10 Terminology and KPI format clarification

20 Selection process and tool review

20 Sample Value Flow Analysis (VFA) as a model

Selection activities (140 minutes)

60 Interactive VFA team exercises

60 Consolidation of KPI wall

20 List revision based on filtering criteria

Review and closing (40 minutes)

20 Review of draft

10 Answering questions

10 Clarifying next steps

240 minutes

FOLLOW UP ON KPI SELECTION

KPI documentation

• KPI measurement limitations

• Cost benefit analysis

First performance review

meeting

• Review and reconsider

some KPIs that may prove

inefficient to measure and

report in practice.

KPI SELECTION CRITERIA

Performance criteria

found in practice:

• Attainable

• Complete

• Direct

• Incentivized

• Practical

• Reliable

• Specific

• Tested

• Time bound

• Useful for management

Relevant

Clearly defined

Balanced

Performance criteria

recommended:

1. KPI selection sources: internal and external, primary and

secondary.

2. Main KPI selection techniques:

• KPI expo;

• KPI clustering;

• Value Flow Analysis;

• KPI balancing;

• KPI selection workshop.

3. KPI selection criteria: clearly defined, balanced, relevant.

SESSION REVIEW

• SmartKPIs.com (2015), KPI examples. Available at:

http://www.smartkpis.com/kpi_examples/dashboard/

• Heinrich, H.W. (1931), Industrial accident prevention: A scientific approach. Available at:

http://www.worldcat.org/title/industrial-accident-prevention-a-scientific-approach/oclc/3493629

REFERENCES

AGENDA

Key Learning Points

5 KPI Documentation

and Target Setting1. KPI documentation form design and

functions

2. KPI documentation process

3. Target setting approaches

1. Design a KPI documentation form;

2. Identify sources of information to document a KPI;

3. Set relevant targets by using a variety of information sources.

KPI DOCUMENTATION FORM FUNCTIONS

Ensure understanding of KPI measurement

Facilitates communication through standardisation

Activation prerequisite

Automation enabler

Knowledge management

Educates stakeholders (KPI owners, data custodians)

Contributes to buy-in by involving the stakeholders

KPI DOCUMENTATIONWHAT

• Identify metadata fields

• Fill in the required fields for each KPI

• Simplify communication

• Alignment

• “Setting the rules”

• Standardized KPI documentation form

Benefits of the organizational KPI Library

• Top performers are 53% more likely than the industryaverage to maintain a library of KPI examples and39% promote the use of performance management totheir employees.

Source: SmartKPIs.com (2015)

Source: Aberdeen (2011)

KPI DOCUMENTATION FORM DESIGN

Form sections Fields

Identification Name, number, functional area

Definition and usage Definition, link to strategic objective

Calculation Sub-measures, formula, trend

Orientation Meaning, impact, implementation level,

indicator type

Purpose Link to strategic objective

Data profile Automation, frequency, time-lag,

integrity, limitations

Targets Intervals, benchmarking fit

Administration Owner, custodian, source

KPI DOCUMENTATION FORM (1)

Source: Ontario Buys (2009)

Positive aspects: A comprehensive 2-3 pages

documentation form;

Recommendations: A table format for the

document is recommended.

Comments: Other fields, besides the ones

present in the right image are: • Rational (the need for this KPI);

• Benefits;

• Underlying leading practices;

• Relevancy;

• Target considerations (establishment and impact

with other metrics);

• Related metrics and standards;

• Implementation (calculation parameters, formula,

what to include and exclude )

• Data accessibility;

• Data source;

• Implementation challenges.

Source: HSE (2012)

Positive aspects: Proper display of

information – using a 1 page table, while

providing the critical information for KPI

measurement.

Recommendations: Standardize KPI

names.

Comments:

• The use of predefined checklist, to

standardize response options;

• The insert of hyperlinks in the

documents to redirect the reader to

additional information;

• Provides direct contact details, such

email addresses.

KPI DOCUMENTATION FORM

• Organizations use on average 12 different fields to

document a KPI

• The most popular fields are:

21 19 1813 12 11

8 7 7 6

Name Definition Calculationformula

Data source KPI IDrecord

Purpose Targets/Thresholds

Subordinatemeasuresused for

calculation

Limitations Standardreportingfrequency

KPI DOCUMENTATION PROCESS

Review internal literature

Review external resources

Consult with staff collecting or using the data

Present to KPI owner for approval

Review and approve by KPI architect / SME / Strategy Manager

Approve by management team

Add to organizational KPI library

THE ORGANIZATIONAL KPI LIBRARY

Process

Design the initial KPI

documentation form

Update KPI documentation forms

Review, update and sign-off KPI

documentation forms

Approve

Centralize all KPI documentation

forms in a KPI library

Governance

Strategy Office / KPI

implementation team

Data custodians

KPI data owners

Top management

Strategy Office / KPI

implementation team

PRACTICE KPI DOCUMENTATION

WORKING WITH TARGETS

• Show the desired result level for KPIs

• Represent the starting point in the

measuring and analysis process

(comparing to actual / desired level)

• Impact behavior

WHY The Goal Setting Theory (Ed Locke, Gary Latham)

Working with

Targets

TARGET SETTING PROCESS

Consultations in target

setting should start with

the top management. As KPIs are active and data

is gathered, targets may be

reviewed and recalibrated Targets need to be

adjusted periodically as

the internal and external

environment of the

company is in a

permanent change.

TARGET SETTING SOURCES

Contextual Analysis

Internal Benchmarking

External Benchmarking

External analysis (market trends)

Historical records

Working with

Targets

TARGET SETTING APPROACHES

Top-down

Bottom-up# Turn time

15 min

Pre-flight check

5 min.

Meal & beverage

provisioning

5 min.

Passenger

boarding and

deplaning 10 min.

Cargo loading and

unloading

10 min.

Cabin grooming

3 min.Fuelling

5 min.

• Some activities can take place in the same time like cabin grooming and cargo

loading or unloading, allowing the process to be more efficient

Establishing thresholds

Set target value

Determine trend

• Increasing

• Decreasing

• Within range

Establish thresholds

• Above target

• In tolerance range

• Below target

Define each threshold

KPIS TREND

Increasing

Within range

Decreasing

KPI THRESHOLDS

Popular methodologies to express thresholds

Traffic light:

• 2 points scale

Meets or exceeds target

Below target

• 3 points scale

Meets or exceeds target

Acceptable range

Far below target

• 4 points scale

Above target

Meets target

Acceptable range

Far below target

KPI THRESHOLDS

Perspective / Strategic Objectives / KPIs SRF Actual result Target Thresholds Status

Financial

Ensure financial stability

$ Revenue M 10,500 10,000

>10,000

9,000-10,000

<9,000

Customers

Maintain high level of patient satisfaction

% Patient satisfaction Q 65% 80%

70-80%

Internal Processes

Ensure timely services

# Waiting time for consultation M 20 30

People, Learning and Growth

Develop staff competencies

# Training hours per employee Y 30 24

20-24; 28-32

<20; >32

CHALLENGES IN WORKING WITH TARGETS

Technical

• Historical data does not

exist;

• Accuracy of forecasts or

analysis on which targets

are set;

• The use of benchmarking

• Assigning weights.

Social

• Targets are perceived

either too high or too low;

• Targets are imposed, not

established collaboratively;

• Negative behaviors driven

by target setting.

Which negative behaviors are associated with performance

based pay? Allocate the correct number in front of each

statement.

CHALLENGES IN WORKING WITH TARGETS

Match Description No. Behavior

Establishing lower targets than the realistic

level estimated as possible.1 Gaming

Looking after the achievement of own

targets, without consideration of the

implications for other areas in the

organization.

2 Sandbagging

Disregarding environmental and safety

considerations in the process of meeting

targets.

3 Tunnel behavior

Influencing results through unapproved means

to ensure target achievement.4

Unethical

behavior

1. KPI documentation form functions are to:

• Provide an easier understanding of KPIs;

• Facilitate communication;

• Prepare KPIs activation;

• Enable automation;

• Ensure knowledge management;

• Educate stakeholders;

• Contribute to buy-in;

2. Most important fields in a KPI documentation form: name, definition,calculation formula, target, data source, data owner, data custodian.

3. Challenges in working with targets: sandbagging, tunnel behavior,unethical behavior and gaming.

SESSION REVIEW

• Aberdeen Group (2011), Enterprise performance management. Available at:

http://www.aberdeen.com/Aberdeen-Library/6659/RA-enterprise-performance-management.aspx,

• The KPI Institute (2014), KPI documentation forms research study

Images:

• HSE (2012), KPI guidelines. Available at:

http://www.hse.ie/eng/services/Publications/corporate/performancereports/kpiguidelines2012.pdf

• Khaled, A., Sanjoy, K. P., Ripon, K. and Salahuddin A. (2011), Selection of suppliers through different

multi-criteria decision making techniques. Available at:

journalofbusiness.org/index.php/GJMBR/article/download/479/426

• KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:

http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html

• Ontario Buys (2009), Performance measurement. Phase II - User guide. Available at:

http://www.doingbusiness.mgs.gov.on.ca/mbs/psb/psb.nsf/Attachments/BPSPerformMeasurePhaseII-

UserGuide-pdf-eng/$FILE/perf_meas_userguide-eng.pdf

• SmartKPIs.com (2015), Net promoter score. Available at: http://www.smartkpis.com/kpi-key-

performance-indicator/net-promoter-score-1303.html

REFERENCES

AGENDA

Key Learning Points

6 Data Gathering and

Visualization1. KPI activation process

2. KPI activation tools and techniques

3. Scorecards and dashboards design

1. Identify data quality dimensions;

2. Use KPI activation techniques and tools;

3. Design effective data visualization tools.

IDENTIFY DATA QUALITY ISSUES

KPI NameActual

ResultDepartment Data Custodian Position

Submission

deadline

# Time to fill a vacant position 35 HR Allan Smith Finance Manager 29-05-14 01-06-14

% Employee satisfaction 89% HR Allan Smith Finance Manager 28-05-14 01-06-14

% Return on capital employed

(ROCE)5% Finance Allan Smith Finance Manager 30-05-14 01-06-14

# Caseload per physician 55 Operations Dan McKenny Operations Manager 29-05-14 01-06-14

% Net promoter score Marketing Joe Linch Marketing Manager 25-05-14 01-06-14

% Patients retention 10% Marketing Joe Linch Marketing Manager 28-05-14 01-06-14

% Contracts signed 234 Logistics Julien Harrison Logistics Manager 02-06-14 01-06-14

# Consultation rooms available 4 Operations Dan McKenny Operations Manager 25-05-14 01-06-14

$ Consultation time 30 Operations Dan McKenny Operations Manager 27-05-14 01-06-14

% Brand awareness 50% Marketing Joe Linch Marketing Manager 27-05-14 01-06-14

% Suppliers accounting for 80% of

spending10% Logistics Julien Harrison Logistics Manager 27-05-14 01-06-14

You have received the following data to compile a report. You are requested

to perform a quick data audit and identify possible issues.

Data quality

Timeliness

Completeness

Consistency

Conformity

Uniqueness

Accuracy

DATA QUALITY DIMENSIONS

Is all the necessary

data present?

Is the data available

at the time needed?

Are there

duplicate

records for

the same

Does data

reflect the

real world

objects or

a verifiable

source?

Is the data compliant with the

format, type and range

requested?

Is the data

presenting the same

values in different

systems?

DATA QUALITY DIMENSIONS

Most common challenges:

Completeness

Availability

AccuracyTimeliness

THE KPI ACTIVATION / DATA GATHERING PROCESS

1• Meet with data custodians

2• Secure activation budget

3• Design the data gathering template

4• Communicate the template to data custodians

5• Send KPI data gathering notification

6• Send reminder email

7• Receive data

activation

On-going

gathering

process

DATA GATHERING GOVERNANCE

KPI Owner

• Responsible to reach KPI targets

Data Custodian

• Responsible to gather data for KPIs

Report Generator

This role can be taken by:

• Data custodian

• KPI owner

• A third party within the organization (e.g. data analyst, strategy/performance manager)

DISCOVER DATA CUSTODIAN ROLES

Analyze KPI measurement options

Reach the targets for the KPIs

Document KPIs

Select KPIs

Activate KPIs

Take decisions based on KPI results

Cascade KPIs to lower organizational levels

Find solutions for inactive KPIs

Ensure quality of data gathered: compliance with measurement

methodology, accuracy and timeliness of submission

Update KPI documentation forms

KPI DATA GATHERING SOURCES

SourcesSurveys

Internal

Operations

Benchmarkingreports

External entities (accreditations,

ratings)

# Customer satisfaction

# Employee engagementUniversities

Hospitals

Oracle

Production reports

HSSE observation sheets

External

benchmarking reports

KPI ACTIVATION TOOLS

Data gathering process map

Data gathering template

KPI documentation form

Data gathering process map11

Data gathering template1

KPI Documentation form1

KPI ACTIVATION / GATHERING TECHNIQUES

Meeting KPI data custodians in

person

Involving data custodians in a

community of practice

Sending reminder email

After KPI activation, involving data custodians in a

community of practice and sending a reminder email

become part of an on-going process to gather data.

KPI ACTIVATION TECHNIQUES

Meeting KPI data custodians in person

Maritz Institute - 3 main benefits for conducting faceto face meetings:

Source: EQAVET (n.d.)

Inspires a

positive

attitude

Strengthens

human networks

and business

relationships

Captures

attention

Involving data custodians in a community of

practice

Source: EQAVET (n.d.)

• Provides a common platform for data custodians to

communicate and share work related experience;

• Stimulates learning by supplying a medium for

sharing best practices and tutoring;

• Creates collaborative processes that add value and

maximize data custodian efficiency.

Custodian name# KPIs to

report

# KPIs already

reported onKPIs not reported on yet Due date Status Comment

John Doe 8 8 none 13-Jan-15 Submitted

Ann Smith 9 8

% Ambulance service budget

out of total operational

budget

13-Jun-15 Outstanding

Emory Lafayette 5 3% Profit rate, $ Revenue per

patient13-Jun-15 Outstanding

Carlos Mendoza 6 5% Successful treatments

delivered13-Jun-15 Outstanding

Ahmed Alsaudi 5 3# Visits per patient,

# Physicians per shift13-Jun-15 Outstanding

Luis Ramirez 4 3# Emergency room patient

wait time13-Jun-15 Outstanding

Anthony Gleason 2 0

# Medical service quality

rating, % Treatment price

variance from market

average

13-Jun-15Not

submitted

Mike Myers 1 0 % Market share 13-Jun-15Not

submitted

Sending reminder email1

DATA COLLECTION METHODS

• Manual - Microsoft Excel

• Automated:

Off-the shelf software;

Custom-designed software.

Source: Gartner (2015)

SPIDER STRATEGIES

SOFTWARE SPOTLIGHT

DATA VISUALIZATION GUIDELINES

Graphical Representation Checklist:

Is it necessary that the viewer makes his own

calculations?

Is data missing?

Are the axes visible enough?

Do lines intersect the data?

Is there an informative title?

Are all tags correctly associated with the graph

elements?

Are there too many dimensions in the graph?

Are there scales for all axes included?

Is 0 included in all line graphs?

Source: Hichert (2006)

163Data

Visualization

DATA VISUALIZATION GUIDELINES

COMMONLY USED GRAPHS IN PRACTICE

Bar charts

Bullet graphs

Dial charts

Line charts

Pie charts

Sparkline

BAR CHARTS

Source: Adapted from Adecco (2013)

2009 2010 2011 2012 2013

Revenues (EUR billions)

0% 5% 10% 15% 20% 25% 30%

Australia & New Zealand

Switzerland

Iberia

Nordics

Benelux

Germany & Austria

UK & Ireland

Emerging markets

North America

France

2013 Revenue split by segment (%)

0% 20% 40% 60% 80% 100%

Branch managers

Senior managers

All managers

Gender distribution in 2013 (%)

Female Male

Column chart Bar chart

Stacked-bar chart

For comparing individual values

BULLET GRAPH

Source: Adapted from Centrelink (2010)

To compare actual results with targets

% Community

satisfaction

% Medical practitioner

satisfaction

% Practice manager

satisfaction

% Pharmacist satisfaction

0% 20% 40% 60% 80% 100%

Thresholds (Under target, within tolerance limits, above targets)

Target

Actual performance

Data 167

DIAL CHARTS

Source: Adapted from http://dashboard.virginiadot.org/default.aspx

Useful for signalling threshold values

LINE CHART

Source: Adapted from Unilever (2013)

Useful for tracking trends

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Net profit margin (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Net profit (EUR million)

PIE CHART

Useful for comparing different parts of a whole

651%49%

% Net sales by segment

Hardware (1,140 € m) Software (1,099 € m)

% Net sales by segment Asia / Pacific / Africa (332 € m) Americas (304 € m)

Germany (644 € m) Europe (959 € m)

% Net sales by segment

Banking (1,497 € m) Retail (742 € m)

SPARKLINE

Source: Adapted from United States Office of Personnel (2012),

Useful for showing data trends in a condensed manner

SPARKLINES & BULLET GRAPHS DASHBOARD

USABILITY IN TERMS OF VISUAL DESIGN

Source: Equinox Center (2014)

Pie chart

Donut chart

Crowded graphs

Scales from 0

Background

1 2 3 4 5

3D or not?

1 2 3 4 5

Source: Adapted from Word Bank (2014)

Avoid 3D graphics

2009 2010 2011 2012

% Health expenditure

19.4% 19.3% 18.6% 17.9%

Canada

2009 2010 2011 2012

% Healthexpenditure

14.7%12.8% 13.4% 13.2%

Singapore

2009 2010 2011 2012

25.6% 25.9% 25.1% 23.9%

United States

2009 2010 2011 2012

% Healthexpenditure

16.6% 16.2%14.0%

19.4% 19.3% 18.6% 17.9%

2009 2010 2011 2012

Canada

14.7%12.8% 13.4% 13.2%

2009 2010 2011 2012

Singapore

25.6% 25.9% 25.1% 23.9%

2009 2010 2011 2012

United States

25.6% 25.9% 25.1% 23.9%

2009 2010 2011 2012

Source: Adapted from US Government (2014)

Pie charts: Inefficient use of space

Healthcare, 27%

Pensions, 25%

Defense, 22%

Wefare, 11%

Interest, 6%

Education, 3%

Transportation, 3%

Protection, 1%General

Government , 1%Other spending, 1%

Federal Spending for United States (2014)

0% 5% 10% 15% 20% 25% 30%

Healthcare

Pensions

Defense

Wefare

Interest

Education

Transportation

Protection

General Government

Other spending

Federal Spending for United States (2014)

Source: Adapted from Astra Zeneca (2012)

Doughnut charts = an ink saving version of pie-charts

27%39%

Base salary

Variable

Base salary

Variable

34%29%

Base salary

Variable

Base salary

Variable

Base salary

Variable

Base salary

Variable

Source: Adapted from MuRata (2014)

Avoid crowded graphs

6¥0.0

¥50.0

¥100.0

¥150.0

¥200.0

¥250.0

¥300.0

Sales by product

2010 2011 2012 2013 2014

Too much information

on one graph creates

confusion and relevant

data is no longer

visible.

Source: MuRata (2014)

Avoid crowded graphs

*The black line represents the average

value of the 5 analyzed years

*The green column represents the average

sales value of all products

¥50.0

¥100.0

¥150.0

¥200.0

¥250.0

¥300.0

¥50.0

¥100.0

¥150.0

¥200.0

¥250.0

¥300.0

¥50.0

¥100.0

¥150.0

¥200.0

¥250.0

¥300.0

¥50.0

¥100.0

¥150.0

¥200.0

¥250.0

¥300.0

¥50.0

¥100.0

¥150.0

¥200.0

¥250.0

¥300.0

Source: Hichert (2006)

“Simplicity is the ultimate sophistication” – Leonardo DaVinci

Source: Adapted from Luftansa (2014)

Scales should start from 0

2009 2010 2011 2012 2013

Capital expenditure and cash flow form operating activities (EUR million)

Capital expenditure Cash flow from operating activities

2,4052,273

2,5662,359

2009 2010 2011 2012 2013

Capital expenditure and cash flow form operating activities (EUR million)

Capital expenditure Cash flow from operating activities

Source: Adapted from United Stated Census Bureau (2008)

Background

65.0%62.5%

70.0%66.5%

59.4%64.8%

69.3% 66.5%

United States Northeast Midwest South West

Homeownership Rates by Region

First quarter 2013 First quarter 2014

65.0% 62.5%

70.0%66.5%

59.4%64.8% 62.4%

69.3% 66.5%59.4%

65.0%62.5%

70.0% 66.5%

59.4%64.8%62.4%

69.3%66.5%

Strong colors are not

recommended for backgrounds.Avoid using strong gridlines, as they

hinder visibility of data.

Recommended visual

representation

KPI TOOLKIT SPOTLIGHT: BALANCED SCORECARD

IN PRACTICE: SCORECARD

Medicare Australia BSC

Source: Medicare Australia (2009)

• The BSC perspectives can be

adapted;

• 6 perspectives identified:

Financial, Services, Internal

Business Processes, Growth and

Development, People, Social and

Environment;

• For more consistency, the target

field should be the last one, not

inserted between actual results.

Imperial College Healthcare, UK

Source: Imperial College Healthcare, UK (n.d.)

• Clustering KPIs under relevant

objectives adds structure to the

data provided;

• An additional field that illustrates

previous results enables better

trend analysis and comparison;

• Color codes are used in order to

understand the information in a

more efficient manner.

NYS Office of Mental Health

Source: New York State Office of Mental Health (2015)

• Current and past target achievements are illustrated

• Differentiating between KPIs and objectives helps improve the performance reporting process

• Standardization provides a clear segmentation between KPIs and objectives

Alberta Health Services, Canada

Source: Alberta Health Services (2012)

• The table is easy to read;

• The “status” column provides useful information regarding the KPIs which require immediate attention;

• Actual results are compare to previous results.

Hospital Medicine Faculty, University of California

Source: University of California (2012)

Positive aspects: Targets are clearly stated; the yearly progression of KPIs enables results comparison.

Recommendations: The use of a 2 points scale may be too narrow: green - at and above target; pink - below target;

Other comments: Given the lack of objectives or goals, the scorecard can be regarded as more of an operational tool.

SCORECARD DESIGN

Checklist:

• Numerical guide (to show if data has been shrink, if this is the

case);

• Legend;

• Eliminate and minimize grids;

• Delineate and group data (strategic themes, perspectives,

objectives);

• Outline status of results ( ≥target, acceptable range,<target);

• Provide essential data (not nice to know information);

• Align characters appropriately;

• Use optimal size font for easy reading.

Source: CLIMB (n.d.)

KPI TOOLKIT SPOTLIGHT: DASHBOARD

IN PRACTICE: DASHBOARD

South Australia Health

Source: South Australia Health (2013)

• Traffic lights point out

areas with problems,

outlining where

actions must be taken.

• Colors used have a

meaning.

• Combines a variety of

visual representations

that are well

positioned in one

Source: Department of Health United Kingdom (2013)

National Health Services, UK

• No contrast

background, no

strong grids;

• Contrast colors

for line charts to

outline different

data sets;

• Interactive

charts, providing

comprehensive

details for each

set of data.

Visualization

Source: Health Authority Abu Dhabi (2012)

Health Authority Abu Dhabi - UAE

• Appropriate use

of colors;

• Trends can be

deducted from

the graphs.

• Adding measures

to the X axes

will add clarity

to the

dashboard.

The KPI Institute, Quickscore - SpiderStrategies

• Background

designed based on

thresholds to

provide instant

understanding of

performance

results;

• Monthly evolution

trends.

KPI TOOLKIT SPOTLIGHT: PERFORMANCE HEALTHOGRAM

Source: The KPI

Institute (2014)

1. Data quality dimensions: completeness, validity, accuracy,

consistency, integrity, timeliness.

2. KPI activation tools:

• Data gathering process map;

• KPI documentation form;

• Data gathering template.

3. KPI activation techniques

• Meeting KPI data custodians in person;

• Involving data custodians in a community of practice;

• Sending reminder email.

SESSION REVIEW

1. Scorecards use tables to visualize data, therefore:• It keeps tables simple;• No grids, no strong color combination;• Clusters data based on strategic themes, perspectives or objectives.

2. Dashboards:

• Bar charts: to compare individual values;

• Bullet graphs: to compare actual results to targets;

• Dial charts: to indicate threshold values;

• Line charts: to track trends;

• Pie charts: to compare different parts of a whole;

• Sparklines: to show trends in a condensed manner.

3. Avoid using:

• 3D graphs: distort data

• Pie and donut charts: inefficient use of space;

• Crowded graphs: data is no longer visible;

• Strong colors for backgrounds: hinder visibility.

SESSION REVIEW

• Adecco Group (2013), Annual report 2013. Available at:

http://annualreport2013.adecco.com/fileadmin/user_upload/redakteure/ar2013/pdf/Adecco_Group_A

R2013.pdf

• Astra Zeneca (2012), Annual report 2011. Available at: http://www.astrazeneca-

annualreports.com/2011/documents/pdfs/annual_report_pdf_entire.pdf

• Centrelink (2010), Annual report 2009-10, available at:

http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual-

report/resources/0910/centrelink-annual-report-0910-full-report.pdf

• Digital Inspiration (2012), Choose the right chart type for your data, available at:

http://www.labnol.org/software/find-right-chart-type-for-your-data/6523/

• Domo (2011), How Fort Worth Police Department uses domo. Available at:

https://www.youtube.com/watch?v=pKbakXit9H4

• Equinox Center (2014), Quality of life dashboard. Available at:

http://www.equinoxcenter.org/assets/files/2014%20Final%20Dashboard%281%29.pdf

• EQAVET (n.d.), Mission. Available at: http://www.eqavet.eu/gns/about-eqavet/mission.aspx

• Fusion Charts (2013), Line & area charts, available at:

http://www.fusioncharts.com/demos/gallery/#line-and-area

• Gartner (2015), CIO Agenda insights. Available at:

http://www.gartner.com/imagesrv/cio/pdf/cio_agenda_insights2015.pdf

• Hichert (2006), Skalen ud deren manipulation, available at:

http://www.hichert.com/downloads/success/check/Skalenmanipulation_2006-11.pdf

REFERENCES

• MuRata (2014), Investor relations. Available at:

http://www.murata.com/ir/information/sales_product/index.html

• SA Health (2013), Emergency department dashboard. Available at:

http://www.sahealth.sa.gov.au/wps/wcm/connect/public+content/sa+health+internet/about+us/our+p

erformance/our+hospital+dashboards/about+the+emergency+department+dashboard/emergency+depar

tment+dashboard

• Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-dashboard-

balanced-scorecard-software

• The KPI Institute (2014), KPIs Infographic. Available at: http://store.kpiinstitute.org/key-performance-

indicators-infographic.html

• Tufte, E. (1983), The visual display of quantitative information. Cheshire, CT: Graphics Press

• Tufte, E. (2001), Presenting data and information, One-day course, September 17, 2001. New York

• Unilever (2013), Making sustainable living commonplace, available at:

http://www.unilever.com/images/ir_UNI_10-Year_Charts_2013_030314_tcm13-384260.pdf

• United Stated Census Bureau (2008), Housing vacancies and homeownership, available at:

http://www.census.gov/hhes/www/housing/hvs/qtr407/graph407.html

• United States Government (2014), US Federal Budget Pie. Available at:

http://www.usgovernmentspending.com/federal_budget_pie

• United States Office of Personnel (2012), Annual performance report 2011. Available at:

• World Bank (2014), Data. Available at:

http://data.worldbank.org/indicator/GC.XPN.TOTL.GD.ZS/countries/1W-DE?display=default

REFERENCES

Images:

• Alberta Health Services (2012), Performance Report. Available at:

http://www.albertahealthservices.ca/Publications/ahs-pub-pr-2012-03-performance-report.pdf

• Gartner (2015), Magic Quadrant. Available at: http://www.gartner.com/technology/reprints.do?id=1-

2AEDBU3&ct=150223&st=sb

• Health Authority Abu Dhabi (2012), http://www.haad.ae/haad/tabid/1156/Default.aspx?Cat=1

• Medicare Australia (2010), Annual report 2009-10. Available at:

http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual-report/resources/0910/centrelink-

annual-report-0910-full-report.pdf

• New York State Office of Mental Health (2015), Balanced Sorecard. Available at: http://bi.omh.ny.gov/scorecard/view

• Department of Health United Kingdon (2013), NHS Procurement Dashboard. Available at:

• The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:

• The KPI Institute (2014), Medical Center Performance Management Toolkit. Available at:

• The KPI Institute (2014), Performance Healthogram. Available at: http://kpiinstitute.org/research/about-performance-

management/performance-healthogram/

• Victoria Government Procurement (n.d.), Supplier performance scorecard. Available at:

http://www.procurement.vic.gov.au/CA2575BA0001417C/WebObj/KPIandSupplierPerformanceScorecardTool(Appendix6)/

$File/KPI%20and%20Supplier%20Performance%20Scorecard%20Tool%20(Appendix%206).XLS

• World Bank (2014), World Bank global scorecard. Available at:

http://siteresources.worldbank.org/CSCARDEXT/Resources/2014_WBG_corporate_scorecard_e-version.pdf

• University of California (2013), Division of Hospital Medicine Faculty Balanced Scorecard FY 2012. Available at:

http://hospitalmedicine.ucsf.edu/bsc/fy2012.html

REFERENCES

Scenario

• You are split in teams, with the objective of recalling as many

key concepts as possible, connected to today’s sessions, starting

from the central theme of the crossword game.

• The rally race lasts for 3 minutes and team members take turns

to run to the board and write down a key term starting from the

letters provided by the central theme;

• Words can be written as well based on the letters provided by

other team members, both vertically and horizontally.

• The team who generates as many relevant concepts in the

limited timeframe wins the game.

REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS

Example

• Consider the following example to understand how key

concepts can be build around the central theme (SUMMER)

and around other team members ideas.

I C E C R E A M

Working with

Targets

10 takeaways to implement in your organization:

1. Connect your KPIs to strategy.

2. Articulate the KPI selection process – apply techniques like

KPI selection workshop, KPI clustering, VFA and KPI

balancing.

3. Avoid measuring what is easy to measure or familiar for the

organization.

4. Use a balanced approached of performance measurement –

Balanced Scorecard.

5. Use both scorecards and dashboards.

COURSE REVIEW

10 takeaways to implement in your organization:

6. Cascade the performance measurement framework down to

employee level.

7. Develop the performance measurement capability in the

organization.

8. Involve stakeholders in the KPI implementation project.

9. Avoid making irrelevant comparisons through flawed

benchmarking.

10. Analyze objectives and KPIs in correlation, not as isolated

elements.

COURSE REVIEW

http://kpiinstitute.org/

http://www.smartkpis.com

http://www.purposefulidentity.com/

http://www.balancedscorecardreview.com

http://www.integratingperformance.com

http://www.performancemagazine.org/

http://elearning.smartkpis.com

Why choose The KPI Institute?

Global expertise in:

• Strategy Management

• Performance Management

• KPIs and analytics

• Business Intelligence

Rigorous research programs

Extensive collections of publications

Comprehensive educational programs

Headquarters

Melbourne Office

Life.lab Building

198 Harbour Esplanade,

Suite 606, Melbourne Docklands,

VIC 3008, Australia

T: +61 3 9028 2223

M: +61 4 2456 8088

Middle East Division

Dubai Office

The Fairmont Dubai

Suite 13 - Office 2103, 21st Floor

Sheikh Zayed Road, POB 119724,

Dubai, UAE

T: +971 4 311 6556

M: +971 5 5787 6427

European Division

Sibiu Office

Sibiu City Center

Somesului Street, No. 3

550003 - Sibiu,

Romania

T: +61 3 9028 2223

M: + 40 7 4706 0997

SE Asia Division

Kuala Lumpur Office

Wisma UOA II

21 Jalan Pinang,

Unit 11-10, 50450

Kuala Lumpur,

Malaysia

M: +60 11 3303 2135

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