ten key points for implementing key performance indicators (kpi's) or metrics
TRANSCRIPT
![Page 1: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/1.jpg)
TEN KEY
for implementing
POINTS
Key Performance Indicators (KPI’s) Excerpts from Mistakes Millionaires Make, by Harry Clark
Take the Entrepreneurial Risk Assessment at: www.pathwaypartnersllc.com
![Page 2: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/2.jpg)
The purpose of Key Performance Indicators
MEASURABLE
SUCCESS
for team members within an organization.
GUIDELINES
(“KPI’s” or often called “metrics”) is to provide
![Page 3: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/3.jpg)
Most organizations operate without KPI’s.
An analogy of a business without KPI’s
would be similar to playing
basketball full-time without knowing
how to or being allowed to keep score.
![Page 4: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/4.jpg)
How long would the game
to the players?
INTEREST
without scores be of
![Page 5: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/5.jpg)
How
would the game be?
POPULAR
![Page 6: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/6.jpg)
If you think about it,
if you don’t measure your performance
and contribution to the company
it is pretty much like playing basketball
without keeping score...
![Page 7: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/7.jpg)
Let’s take the analogy
one step further
![Page 8: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/8.jpg)
If no one knew the rules of the game and there was no
clarity about how to win, what would it look like?
![Page 9: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/9.jpg)
One player might assume that dribbling the ball is
best and therefore bounces the ball repeatedly.
![Page 10: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/10.jpg)
Another might think passing the ball is how to win
and therefore does nothing but pass the ball.
![Page 11: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/11.jpg)
Yet another might think
hitting the backboard
with the ball is how to win.
![Page 12: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/12.jpg)
You see, without clearly defined
it is hard for a team to be truly successful.
METHODS OF
DETERMINING SUCCESS
![Page 13: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/13.jpg)
KPI’s that are well implemented create total
alignment of energy and an environment for success
for each team member and the team as a whole.
![Page 14: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/14.jpg)
Having KPI’s allows all team members to feel
successful and to understand how their contribution
is directly related to the overall success of the company.
![Page 15: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/15.jpg)
TEN KEY
The following are
POINTS
to understand about KPI’s
![Page 16: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/16.jpg)
1
KPI’S
3-5
![Page 17: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/17.jpg)
Each and every team member has three to five KPI’s.
![Page 18: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/18.jpg)
Do not fall for the temptation to think
“I have 23 items that are important for me
to measure each week.”
![Page 19: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/19.jpg)
Everyone in the organization from the receptionist
to the CEO must have 3 to 5 KPI’s,
NO MORE.
![Page 20: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/20.jpg)
The KPI’s are generated from the bottom-up,
meaning that the CEO’s KPI’s cannot be any different
than the aggregate of those created for
all the other team members.
![Page 21: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/21.jpg)
2
MEASURABLE
![Page 22: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/22.jpg)
The KPI’s must be unambiguously measureable.
There cannot be any question as to what is being measured.
For example: Produce 30 widgets per hour Average 15% profit on projects,
Customer satisfaction score of 9.85 or greater, etc
![Page 23: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/23.jpg)
3
TIME
BOUND
![Page 24: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/24.jpg)
There must be definitive dates or timeframes
associated with each KPI.
For example, 2016 Average Employee Satisfaction
Score of 74/100, or Reduce A/R aging to 32 days
by November 15th.
![Page 25: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/25.jpg)
4
PASEO PRINCIPLE
![Page 26: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/26.jpg)
“What gets measured gets done” is very true.
It is vital that you consider in advance what
the potential unintended consequence might be of
measuring each KPI.
![Page 27: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/27.jpg)
In some cases, if you measure one facet then
there may be more important areas that
will be detracted from
and overall performance will be reduced.
![Page 28: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/28.jpg)
Make sure you are measuring
the most important functions for the organization.
![Page 29: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/29.jpg)
5
PRACTICALITY
![Page 30: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/30.jpg)
Make sure the KPI data elements are easily obtainable.
You do not want to spend significant time and expense
developing processes or systems to measure your KPI’s.
![Page 31: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/31.jpg)
6
FORMULAS
AND
PERCENTAGES
![Page 32: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/32.jpg)
One easy way to track KPI’s is to turn many numbers
into a single factor, percentage or ratio.
That way it is easy to track.
The A/R aging stated previously is a calculation,
and 32 days is easy to understand.
![Page 33: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/33.jpg)
7 PROFESSIONAL
DEVELOPMENT
![Page 34: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/34.jpg)
Consider encouraging each team member to add
one KPI as a professional development goal.
For example, enroll in MBA program by January,
start Toastmasters in February.
![Page 35: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/35.jpg)
8
TIME CYCLE
AND
REVIEW AND
FEEDBACK
![Page 36: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/36.jpg)
The best KPI’s have short cycle times.
This means how quickly they can be measured.
For example, “Average 6 calls per day” is more quickly
measured than an annual employee satisfaction score
![Page 37: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/37.jpg)
The faster cycle times allow for
quicker process improvement.
![Page 38: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/38.jpg)
It is important that the teams review the KPI’s and
discuss how to refine them to make them
more meaningful and challenging.
Remember, the idea is to make the team
function better and more successfully.
![Page 39: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/39.jpg)
9
LONG
PROCESS
TERM
![Page 40: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/40.jpg)
KPI’s typically take about 30-60 days
to fully implement and about six to eight months
for the teams to really get into them.
![Page 41: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/41.jpg)
It will initially feel uncomfortable and odd
for some team members but after six months or so
they take on a life of their own and
changes the game of business!
![Page 42: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/42.jpg)
10
EVALUATION
PERFORMANCE
![Page 43: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/43.jpg)
KPI’s are helpful for use in periodic performance reviews.
Eventually, it is important for the KPI evaluation to have
some influence on income (whether bonuses or base pay).
![Page 44: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/44.jpg)
Learn more by reading my up-coming book
![Page 45: Ten Key Points for Implementing Key Performance Indicators (KPI's) or Metrics](https://reader033.vdocuments.site/reader033/viewer/2022050614/58ab62e71a28abbc2a8b5d09/html5/thumbnails/45.jpg)
Or by taking the
Entrepreneurial Risk Assessment Survey at
http://pathwaypartnersllc.com/
Or by subscribing
And remember: to my blog
sharing is caring