“The greatest ability in business is to get along with others and influence their actions.”
John Hancock(1737 – 1793)
Founding Father of the United States of America, signer of the Declaration of Independence, President of the Second Continental Congress, and first and third Governor of the Commonwealth of Massachusetts
KPIs represent a set of measures focusing on those aspects of organizational performance that are the most critical for the current and future success of an organization. There are only a few KPIs in an organization (no more than 10) and they have certain characteristics.
KPI characteristics include:
When you put a Pound or Dollar sign to a measure you have not dug deep enough. Sales made yesterday will be a result of sales calls made previously to existing and prospective customers, advertising, amount of contact with the key customers, product reliability etc. I label any indicator expressed in monetary terms as result indicator, see below for more explanation.
[wcm_restrict]KPIs should be monitored and reported 24/7, daily and a few perhaps weekly. How can a KPI be measured monthly? This surely is “shutting the barn door well after the horse has truly bolted”. KPIs are “current” or “future” measures as opposed to “past” measures. When you look at most organizational measures, they are very much past indicators measuring events of the last month or quarter. These indicators cannot be and never were a KPI. That is why a satisfaction percentage (e.g. 65%) from a customer satisfaction survey performed every six months can never be a KPI.
All good KPIs that I have come across, that have made a difference, had the CEO’s constant attention, with daily calls to the relevant staff. Having a potentially “career limiting” discussion with the CEO is not something staff want to repeat, and in the airlines case, innovative and productive processes were put in place to prevent a recurrence.
A KPI should tell you about what action needs to take place. The British Airways “late plane” KPI communicated immediately to everybody that there needed to be a focus on recovering the lost time. Cleaners, caterers, ground crew, flight attendants, and liaison officers with traffic controllers would all work some magic to save “a minute here and a minute there” whilst maintaining or improving service standards.
A KPI can be tied down to a team. In other words, the CEO can ring the manager and ask “why”. Return on capital employed has never been a KPI as it cannot be tied down to a manager, it is a result of many activities under different managers. Can you imagine the reaction if a GM was told one morning by the CEO “Pat, I want you to increase the return on capital employed today”.
A KPI will affect more then one critical success factor and most of the balanced scorecard perspectives. In other words, when the CEO focuses on the KPI, and the staff follows, the organization scores goals in all directions.
A KPI has a flow on effect on other performance measures. Reducing late planes would improve performance measures around improved service by ground staff as there is less “fire fighting” to distract them from a quality and caring customer contact.[/wcm_restrict][wcm_nonmember]
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About the Author
David Parmenter, author of Key Performance Indicators: Developing, Implementing, and Using Winning KPIs
David’s work on KPIs has received international recognition with clients in Auckland, Wellington, Sydney, Melbourne, Brisbane, Adelaide, Canberra, Perth, Kuala Lumpur, Singapore, Tehran, Prague, Dublin, London, Birmingham, Manchester and Edinburgh. David is a fellow of the Institute of Chartered Accountants in England & Wales and has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and Price Waterhouse Coopers.
David’s recent thinking is accessible from www.davidparmenter.com. He can be contacted at parmenter@waymark.co.nz or telephone +64 4 499 0007.
This articles is an extract from his “Implementing winning KPIs” whitepaper which can be downloaded from http://davidparmenter.com/how-to-guides)
First and foremost, find an idea you love.
Whether it’s ice cream, bean bags, or shirts with funny slogans, find a product or service you’re passionate about selling. I started my career as a marketing executive. One day, I was invited to dinner with Japanese business associates. The dinner was a great success, and afterwards we moved to a Japanese tea house where, following tradition, everyone removed their shoes. I looked down, and I had two different socks on – one with a hole in the big toe. I sat cross-legged for an entire evening, trying to hide my foot. I’m passionate about helping executives avoid such embarrassments by allowing them to buy fine-quality essentials in one convenient place online, and have them delivered to their doorstep. Because wouldn’t it be wonderful if your sock drawer could replenish itself?
[wcm_restrict]Keep your Internet presence fresh.
The first version of Blacksocks’ website was launched in 1999. It was a single shot of a washing machine. Customers entered their orders into a slot in the machine, which sent an e-mail directly into my inbox. As the Web has developed, our site has become increasingly sophisticated, with the most recent relaunch this April. We’ve positioned content more intuitively and enhanced visual communication to make for smoother and more enjoyable shopping for Blacksocks clients. Ask yourself, if I were a customer looking at my site, what would I want to be different?
Maintain a human connection with your customer.
No one likes to feel they’re buying products from a machine. Remind your customers that there’s a human face to behind your online business. Humor helps. At Blacksocks, we’re lucky to have a funny story behind the origins of the brand, and no one can take the business of selling socks too seriously anyway – after all, they’re just socks. Incorporating humorous touches into your website’s content will make a virtual transaction feel personal, enhancing the customer experience.
Experiment with social media.
Everyone knows that Facebook has now overtaken Google as the most popular U.S. website, but not everyone is sure how to turn social media into profit. Explore these new distribution channels and marketing concepts. Blacksocks has an active presence on Facebook; Joe and Jane Blacksocks run Twitter accounts on the company’s behalf; and Blacksocks is the official sock sponsor of iwearyourshirt.com, run by two guys who serve as human billboards. We also strive to keep our customers engaged by inviting them to post comments on the Blacksocks site.
Invest in long-term success.
Many budding Web-preneurs give up after only a few months. Be realistic about your goals: it’s extremely unlikely that you’ll achieve financial success immediately, particularly if you’re one person on a shoestring budget. Most decisions, whether they’re for online businesses or brick-and-mortar ones, need to be made within a working time frame of two to five years at least. Think about where your website will be a decade from now. If you’re creating original content, timeless content, content that connects with customers, and you have researched the market your product is aimed at thoroughly, you have the tools you need to create a successful online enterprise.
Additional tips can be found at Blacksocks.com.[/wcm_restrict][wcm_nonmember]
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About the Author
Following his studies of economics and business administration at the University of St. Gallen, Paris and Toronto (earning the title of lic. oec. HSG in 1993) Samy Liechti was a marketing and communications consultant for various agencies in Switzerland and abroad, working with numerous prominent brands. Samy Liechti has been Blacksock’s managing director ever since its foundation in the summer of 1999.
As change agents, we find ourselves regularly challenged to get the buy-in and follow-through we need. We often start with a great premise and desired outcome, but few tools to enlist the necessary buy-in.
Two things must happen before change will occur:
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Unfortunately, we’ve never been taught how to help manage the behind-the-scenes – and often unconscious – issues necessary to create and maintain systemic change. We’ve operated on the assumption that with a rational initiative and good communication folks will know how and why to adopt the change – and if they don’t, we handle their resistance.
I suggest there is a more effective way to be successful: become a GPS system and lead the change from the inside out.
Be the GPS System, Not the Consultant
During change initiatives, we often don’t manage the unconscious issues that underlie the status quo and will shift during change. People will take no action – or will resist any request for change – until they address these in a way that maintains internal congruence. But because they are often hidden, we tend to ignore them until it’s too late.
Before designing a change initiative, we need to:
When we attempt to use negotiation skills or OD skills at the wrong time in the change cycle – and almost all change agents attempt to get folks to agree to change well before they have figured out their personal routes through their change issues – we are delaying the change and opening up the possibilities for rejection and sabotage.
Current strategic change models only manage the ‘push/information’ half of the change process. Let’s add a ‘pull/buy-in’ skill set.
To ensure buy-in to change, become a neutral GPS system to navigate followers through the old and new systems issues that will shift, and help them create their own new rules, roles, and relationship patterns.
Help them develop the sort of environment that will both match the change and manage the personal, idiosyncratic elements that have made the folks successful in their pre-change situation.
As part of your new GPS skill set, become a decision facilitator and lead change where it begins: within the system that created the need for change to begin with, and through the people who will be leading the charge.
About the Author
Sharon Drew Morgen is founder of Morgen Facilitations, Inc. (www.newsalesparadigm.com). She is the visionary behind Buying Facilitation®, the decision facilitation model that enables people to change with integrity. A pioneer who has spoken about, written about, and taught the skills to help buyers buy, she is the author of the acclaimed New York Times Business Bestseller Selling with Integrity
Every problem possesses unique nuanced qualities and it is often these minor details that renders a decision a striking success, a monumental failure, or, most frequently, simply average. Those who recognize these details can exploit them to their organization’s advantage.[wcm_restrict plans=”49267, 25542, 25653″] Those who fail to make the observation at best forfeit the possibility to exploit these opportunities and at worst find their actions rendered ineffective or even counterproductive.
How does on improve the chances of observing the nuanced details important to a decision? By observing the opportunity or problem first hand.
All too often decision-makers legislate from distant offices; relying on the perceptions of others to provide the basis of their option selection. And while well-meant, the observations of others are always, in unintentionally, filtered by their knowledge, experiences, and biases. This filtering of information threatens the loss of the very details the decision-maker may need to recognize and fully seize upon the opportunity at hand. To avoid such filtering, the decision-maker should go to the field and observe the opportunity or issue first hand. Only then will he or she gain a full, unfiltered appreciation of the situation.
Final Thought…
Observing the opportunity or problem first hand is not to suggest that the decision-maker should be the only information gatherer and analyst. The opposite is true. Multidiscipline teams add diverse perspectives to the decision-making process; offering insights to options and opportunities that may not otherwise be identified. But it is equally important for the decision-maker to possess direct knowledge of the circumstances surrounding the opportunity or issue as this individual is typically the most experienced member of the team and as the decision owner, he or she should be personally involved – not an owner at a distance.[/wcm_restrict][wcm_nonmember plans=”49267, 25542, 25653″]
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