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Key Performance Indicator (KPI) and Performance Measure Development

Most of us have heard some version of the standard performance measurement cliches: “what gets measured gets done,” “ if you don’t measure results, you can’t tell success from failure and thus you can’t claim or reward success or avoid unintentionally rewarding failure,” “ if you can’t recognize success, you can’t learn from it; if you can’t recognize failure, you can’t correct it,” “if you can’t measure it, you can neither manage it nor improve it,” but what eludes many of us is the easy path to identifying truly strategic measurements without falling back on things that are easier to measure such as input, project or operational process measurements.

What is a KPI?

KPI’s are performance measures that indicate progress toward a desirable outcome. Strategic KPIs monitor the implementation and effectiveness of an organization’s strategies, determine the gap between actual and targeted performance and determine organization effectiveness and operational efficiency.

Key Performance Indicators (KPIs) are the critical (key) indicators of progress toward an intended result. KPIs provides a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most. As Peter Drucker famously said, “What gets measured gets done.”

Managing with the use of KPIs includes setting targets (the desired level of performance) and tracking progress against that target. Managing with KPIs often means working to improve leading indicators that will later drive lagging benefits. Leading indicators are precursors of future success; lagging indicators show how successful the organization was at achieving results in the past.

Good KPIs:

  • Provide an objective way to see if our strategy is working
  • Offer a comparison that gauges the degree of performance change over time
  • Focus employees’ attention on what matters most to success
  • Allow measurement of accomplishments, not just of the work that is performed
  • Provide a common language for communication
  • Help reduce intangible uncertainty
  • Are valid, to ensure measurement of the right things
  • Are verifiable, to ensure data collection accuracy

BSS Africa consultants and trainers are experts at advanced KPI development and analysis.  If you would like to learn more about how BSS Africa can help your organization develop strategic performance measures, please contact us electronically.