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Key Performance Indicators (KPI)

Key Performance Indicators (KPI) Developing, Implementing, and Using Winning KPIs, 3rd Edition

Author: David Parmenter
Publisher: John Wiley & Sons
ISBN: 9781118925102
Published In: April 2015
Format: Hardback , 448 pages
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

HKD 550.00

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Streamline KPIs to craft a simpler, more effective system of performance measurement

Key Performance Indicators provides an in-depth look at how KPIs can be most effectively used to assess and drive organizational performance. Now in its third edition, this bestselling guide provides a model for simplifying KPIs and avoiding the pitfalls ready to trap the unprepared organization. New information includes guidance toward defining critical success factors, project leader essentials, new tools including worksheets and questionnaires, and real-world case studies that illustrate the practical application of the strategies presented. The book includes a variety of templates, checklists, and performance measures to help streamline processes, and is fully supported by the author’s website to provide even more in-depth information.

Key Performance Indicators are a set of measures that focus on the factors most critical to an organization’s success. Most companies have too many, rendering the strategy ineffective due to overwhelming complexity. Key Performance Indicators guides readers toward simplification, paring down to the most fundamental issues to better define and measure progress toward goals. Readers will learn to:

separate out performance measures between those that can be tied to a team and result in a follow-up phone call (performance measures) and those that are a summation of a number of teams working together (result indicators)
look for and eradicate those measures that have a damaging unintended consequence, a major darkside
Sell a KPI project to the Board, the CEO, and the senior management team using best practice leading change techniques
Develop and use KPIs effectively with a simple five stage model
Ascertain essential performance measures, and develop a reporting strategy

Learn the things that a KPI project leader needs to know

A KPI project is a chance at a legacy – the project leader, facilitator, or coordinator savvy enough to craft a winning strategy can affect the organization for years to come. KPI projects entail some risk, but this book works to minimize that risk by arming stakeholders with the tools and information they need up front. Key Performance Indicators helps leaders shape a performance measurement initiative that works.

Preface

Acknowledgments

Part I: Setting the Scene

Chapter 1 The Great KPI Misunderstanding

Key Result Indicators

Result Indicators

Performance Indicators

Key Performance Indicators

Seven Characteristics of KPIs

Difference between KRIs and KPIs and RIs and PIs

Lead and Lag Confusion

Number of Measures Required – The 10/80/10 Rule

Importance of Timely Measurement

Where Are You in Your Journey with Performance Measures?

Notes

Chapter 2 The Myths of Performance Measurement

Myth #1: Most Measures Lead to Better Performance

Myth #2: All Measures Can Work Successfully in Any Organization, At Any Time

Myth #3: All Performance Measures Are KPIs

Myth #4: By Tying KPIs to Remuneration You Will Increase Performance

Myth #5: We Can Set Relevant Year-End Targets

Myth #6: Measuring Performance Is Relatively Simple and the Appropriate Measures Are Obvious

Myth #7: KPIs Are Financial and Non-Financial Indicators

Myth #8: You Can Delegate a Performance Management Project to a Consulting Firm

The Balanced Scorecards Myths

Notes

Chapter 3 Unintended Consequence: The Dark Side of Measures

Example: City Train Service

Example: Accident and Emergency Department

Examples from Dean Spitzer’s Book

Performance-Related Pay

Dysfunctional Performance Measures Checklist

Notes

Chapter 4 Revitalizing Performance

Five Foundation Stones

The Many Facets of Performance Management

Notes

Chapter 5 Strategy and Its Relevance to Performance Measures

Articulate Your Organization’s Mission, Vision, Values, and Management Principles

Create a Strategy That Is Understood by Staff

Ensure That Your Strategy Is Balanced

Monitor Implementation of Your Strategy

Creating the Future

Notes

Part II: Winning KPI Methodology

Chapter 6 Background to the Winning KPI Methodology and Its Migration

The Original Twelve-Step Process

The New Six-Stage Process

Winning KPI Methodology and Its Migration

An Overview of the Six Stages

Chapter 7 Foundation Stones for Implementing Key Performance Indicators

“Partnership with the Staff, Unions, and Third Parties” Foundation Stone

“Transfer of Power to the Front Line” Foundation Stone

“Measure and Report Only What Matters” Foundation Stone

“Source KPIs from the Critical Success Factors” Foundation Stone

“Abandon Processes That Do Not Deliver” Foundation Stone

“Appointment of a Home Grown Chief Measurement Officer” Foundation Stone

“Organization-Wide Understanding of the Winning KPIs Definition” Foundation Stone

Notes

Chapter 8 Getting the CEO and Senior Management Committed to the Change (Stage 1)

Obtaining Senior Management Team Commitment

Agree on Timing, Resources and Approach

Appendix 8A Templates and Checklists: Obtaining Senior Management Team Commitment

Senior Management Team Worksheets Questionnaire

Selecting a Facilitator

Appendix 8B Templates and Checklists: Setting Up a Holistic KPI Development Strategy

Notes

Chapter 9 Up-Skill In-House Resources to Manage the KPI Project (Stage 2)

Establish a Winning KPI Team Working Full Time on the Project

Establish a Just-Do-It Culture and Process

Appendix 9A Checklist and Worksheets: Establishing a Winning KPI Team

Appendix 9B: Checklist and Worksheets: Establish a “Just Do It” Culture and Process for This Project

Notes

Chapter 10 Leading and Selling the Change (Stage 3)

Leading Change by John Kotter

Learn to Sell by Appreciating the Emotional Drivers of the Buyer

Sales Pitches You Will Need

Selling the Winning KPIs to the Organization’s Staff

Appendix 10A An Employee Questionnaire to be Used Prior to the Staff KPI Workshop

Appendix 10B Identifying Employee Concerns and Learning Issues Worksheet

Appendix 10C Agenda for the Road Show (Larger Organizations)

Appendix 10D Marketing the KPI System to All Employees Checklist

Notes

Chapter 11 Finding Your Organization’s Operational Critical Success Factors (Stage 4)

Operational Critical Success Factors Verses External Outcomes

The Missing Link

Importance of Knowing Your Organization’s Operational Critical Success Factors

Characteristics of Critical Success Factors

Four Tasks for Identifying Operational Critical Success Factors

Alternative Methodologies

Appendix 11A Preparing a List of Draft Operational Success Factors Checklist

Appendix 11B Common Operational Success Factors

Appendix 11C A Suggested Draft of the Invitation Which Should Be Sent By the CEO

Appendix 11D A Suggested Timetable for the Two-Day Operational Critical Success Factor Workshop

Two-Day Workshop

Appendix 11E A Workshop Planning Checklist

Appendix 11F Workshop Instructions

Exercise 1: Revisiting Some of Your Performance Measures

Notes

Chapter 12 Determining Measures That Will Work in Your Organization (Stage 5)

How to Derive Measures: An Overview

Ascertain the Team Performance Measures

Recording Performance Measures in a Database

Sorting the Wheat from the Chaff

Find the KRIs That Need to Be Reported to the Board

Find the Winning KPIs

Measures Gallery

Benefits of this Stage

Appendix 12A Proposed Agenda for the KPI Workshop for All Staff

Appendix 12B Team Balanced Scorecards Workshop Exercises

Appendix 12C Assess the Level of Understanding of the Organization’s CSFs Worksheet

Appendix 12D Checklist to Ensure You Have a Successful Staff Workshop

Appendix 12E Key Tasks for Recording Performance Measures in a Database

Appendix 12F Selecting Organization-wide Winning KPIs Worksheet

Notes

Chapter 13 Get the Measures to Drive Performance (Stage 6)

Develop the Reporting Framework at All Levels

Facilitate the Use of Winning KPIs

Refine KPIs to Maintain Their Relevance

Appendix 13A Checklists

Appendix 13B Worksheets

Developing Display, Reporting, and Review Frameworks at All Levels

Worksheet for Facilitating the Use of KPIs

Worksheets: Refining KPIs to Maintain Their Relevance

Chapter 14 Reporting Performance Measures

The Work of Stephen Few in Data Visualization

The Work of Jon Moon on Clarity and Impact

Reporting the KPIs to Management and Staff

Reporting Performance Measures to Management

Reporting Performance Measures to Staff

Reporting Performance Measures to the Board

Reporting Team Performance Measures

How the Reporting of Performance Measures Fits Together

Notes

Part III: Chief Measurement Officer’s Toolkit

Chapter 15 Resources for the Chief Measurement Officer

The CMO Needs a Cluster of Mentors

Guidelines for the External KPI Facilitator

Remember the Fundamentals

Resources

Running Workshops

Workshop Preparation Checklist

Implementation Lessons

Appendix 15A Templates and Checklists: Chief Measurement Officer’s Corner

Appendix 15B KPI Typical Questions and Answers

Notes

Chapter 16 Case Studies on the Critical Success Factor Workshops

Private Sector Case Study # 1: An Asian Conglomerate

Private Sector Case Study #2: Medical Company

Private Sector Case Study #3: Forestry Company

Private Sector Case Study #4: Timber Merchant

Private Sector Case Study #5: Investment Bank

Non Profit Membership Organization Case Study #1: Golf Club

Non Profit Membership Organization Case Study #2: Surf Life Saving

Government Department Case Study #1

Government Department Case Study #2

Professional Accounting Body Case Study #1

Charity Case Study #1

Chapter 17 Common Critical Success Factors and Their Likely Measures

Chapter 18 Comparison to Other Methodologies

Main Differences between the Balanced Scorecard and Winning-KPIs Methodologies

Stacey Barr’s PuMP

Paul Niven’s Balanced Scorecard Work

Notes

Chapter 19 CEO Toolkit

Letter to You, the Chief Executive Officer

Measurement Leadership Has to Come from the Chief Executive Officer

Note

Appendix A Foundation Stones of Performance-Related Pay Schemes

The Billion Dollar Giveaway

The Foundation Stones

Notes

Appendix B A Draft Job Description for the Chief Measurement Officer

Outline

Duties/Responsibilities of the Chief Measurement Officer

Skills and Experience

Appendix C Delivering Bulletproof PowerPoint Presentations

Appendix D Presentation Templates

Appendix E Performance Measures Database

Index

DAVID PARMENTER is an international presenter known for his thought-provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in the development of winning KPIs, replacing the annual planning process with quarterly rolling planning and lean finance team practices. Parmenter's work on KPIs is recognized internationally as a breakthrough in understanding how to make performance measures work. He has delivered workshops to thousands of attendees in 30 countries around the world. Parmenter has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and PricewaterhouseCoopers, and is a fellow of the Institute of Chartered Accountants in England and Wales. He is a regular writer for professional and business journals. He is also the author of Winning CFOs: Implementing and Applying Better Practices, Key Performance Indicators for Government and Non Profit Agencies: Implementing Winning KPIs, and The Leading-Edge Manager's Guide to Success (all from Wiley). He can be contacted via [email protected]. His website, www.davidparmenter.com, contains many white papers, articles, and freeware that will be useful to readers.

The reader can access, free of charge, a PDF of the suggested worksheets, checklists, and templates from www.kpi.davidparmenter.com/thirdedition