key performance indicators · critical success factors as seen through the board member’s eyes....

KEY PERFORMANCE

INDICATORS

DEVELOPING, IMPLEMENTING,

AND USING WINNING KPIS

THIRD EDITION

BY DAVID PARMENTER

Contents

Exhibit P.1 6

Exhibit P.2 7

Exhibit P.3 8

Exhibit P.4 9

Exhibit P.5 10

Exhibit P.6 11

Exhibit P.7 12

Exhibit 1.1 13

Exhibit 1.2 14

Exhibit 1.3 15

Exhibit 1.4 16

Exhibit 1.5 17

Exhibit 1.6 18

Exhibit 1.7 19

Exhibit 1.8 20

Exhibit 1.9 21

Exhibit 1.10 22

Exhibit 2.1 23

Exhibit 2.2 24

Exhibit 2.3 25

Exhibit 2.4 26

Exhibit 2.5 27

Exhibit 2.6 28

Exhibit 2.7 29

Exhibit 2.8 30

Exhibit 2.9 31

Exhibit 3.1 32

Exhibit 4.1 33

Exhibit 4.2 34

Exhibit 4.3 38

Exhibit 4.4 41

Exhibit 4.5 45

Exhibit 4.6 47

Exhibit 4.7 50

Exhibit 4.8 51

Exhibit 4.9 52

Exhibit 5.1 53

Exhibit 5.2 54

Exhibit 5.3 55

Exhibit 5.4 56

Exhibit 5.5 57

Exhibit 6.1 58

Exhibit 6.2 59

Exhibit 7.1 60

Exhibit 8.1 61

Exhibit 8.2 62

Exhibit 9.1 63

Exhibit 9.2 64

Exhibit 9.3 65

Exhibit 10.1 66

Exhibit 10.2 67

Exhibit 10.3 68

Exhibit 11.1 69

Exhibit 11.2 70

Exhibit 11.3 71

Exhibit 11.4 72

Exhibit 11.5 73

Exhibit 11.6 74

Exhibit 11.7 75

Exhibit 11.8 76

Exhibit 11.9 77

Exhibit 11.10 78

Exhibit 11.11 79

Exhibit 11.12 80

Exhibit 11.13 81

Exhibit 11.14 82

Exhibit 11.15 83

Exhibit 12.1 84

Exhibit 12.2 85

Exhibit 12.3 86

Exhibit 12.4 87

Exhibit 12.5 88

Exhibit 12.6 90

Exhibit 12.7 91

Exhibit 13.1 92

Exhibit 13.2 93

Exhibit 14.1 94

Exhibit 14.2 95

Exhibit 14.3 97

Exhibit 14.4 98

Exhibit 14.5(a) 99

Exhibit 14.5(b) 100

Exhibit 14.6 101

Exhibit 14.7 102

Exhibit 14.8 103

Exhibit 14.9 104

Exhibit 14.10 108

Exhibit 14.11 109

Exhibit 14.12 110

Exhibit 14.13 111

Exhibit 15.1 112

Exhibit 15.2 113

Exhibit 15.3 114

Exhibit 15.4 115

Exhibit 15.5 116

Exhibit 16.1 117

Exhibit 16.2 118

Exhibit 16.3 120

Exhibit 16.4 121

Exhibit 16.5 122

Exhibit 16.6 123

Exhibit 16.7 124

Exhibit 16.8 125

Exhibit 16.9 126

Exhibit 17.1 127

Exhibit 18.1 136

Exhibit 18.2 137

Exhibit 18.3 139

Exhibit 18.4 140

Exhibit 18.5 141

Appendix A 143

Appendix B 160

Appendix C 164

Appendix D 171

Appendix E 172

EXHIBIT P.1 Discord with Strategy

6

EXHIBIT P.2 Alignment with Strategy

7

EXHIBIT P.3 Linkage of KPIs to Strategic Objectives

8

EXHIBIT P.4 New Content in this Third Edition

The barriers toKPIs

The myths surrounding KPIsUnintended behavior: the dark side of performancemeasuresThe misuse of KPIs in job descriptions, performancerelated pay, and service level agreementsThe reasons why the traditional balanced-scorecardapproach has failedWhere the winning KPIs methodology fits with thebalanced scorecard and strategy

A broader viewon becoming afuture readyenterprise

Revitalizing performance management includingreference to the work of the Paradigm Shifters (Drucker,Collins, Welch, Hamel, Peters and Waterman, and Hope)Keeping KPIs out of performance related pay

Changes in thewinning KPImethodology

More emphasis on ascertaining the critical success factorsMore examples to aid with finding your critical successfactorsCritical success factors are operationally focusedA simplified five-stage methodology which incorporatesthe original twelve stepsGreater linkage to published thought leadersSubstantial changes to the foundation stones of a KPIproject (including the importance of having an in-houseKPI expert; a chief measurement officer)

Toolkit Case studies in the private and public sectorExample critical success factors and matchingperformance measuresMeasures that are commonly mislabeled as KPIsChief measurement officer job description and toolkitRelevant performance measures

Selling change A greater emphasis on the sales processPowerPoint templates

9

Prework 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Post1 Senior management team commitment2 Establishing a "winning KPI" project team3 Establishing a "just do it" culture and process4 Setting up a holistic KPI development strategy5 Marketing KPI system to all employees6 Identifying operational critical success factors7 Recording of performance measures in a database8 Selecting team performance measures9 Selecting organizational winning KPIs10 Developing the reporting frameworks at all levels11 Facilitating the use of "winning KPIs"12 Refining KPIs to maintain their relevance

Project weeks

EXHIBIT P.5 Twelve-Step Implementation 16 Week Timeline

10

Stage Steps Prework 1 2 3 4 5 6 7 to 11 12 to 16 Post

1 1,4Getting the CEO and senior management committed to the change

2 2,3Up-skill in-house resources to manage the KPI project

3 5 Leading and selling the change

4 6Finding your organization's operational critical success factors

5 7,8,9Determining measures that will work in your organization

6 10,11,12 Get the measures to drive performance

Project weeks

EXHIBIT P.6 The 12 Steps Merged into a Six-Stage Process

11

EXHIBIT P.7 The Seven Foundation Stones Underpinning the Six-Stage Process

12

EXHIBIT 1.1 The Importance of Knowing Your Critical Success Factors

13

EXHIBIT 1.2 Characteristics of KPIs

Nonfinancial 1. Nonfinancial measures (e.g., not expressed in dol-lars, Yen, Pounds, Euros, etc.)

Timely 2. Measured frequently (e.g., 24/7, daily, or weekly)

CEO focus 3. Acted upon by the CEO and senior managementteam

Simple 4. All staff understand the measure and what correctiveaction is required

Team based 5. Responsibility can be tied down to a team or a clus-ter of teams who work closely together

Significant impact 6. Major impact on the organization (e.g., it impactson more than one of top CSFs and more than onebalanced scorecard perspective)

Limited dark side 7. They encourage appropriate action (e.g., have beentested to ensure that they have a positive impacton performance, whereas poorly thought throughmeasures can lead to dysfunctional behavior)

14

EXHIBIT 1.3 Difference between KRIs and KPIs

KRIs KPIs

Can be financial and nonfinancial(e.g., return on capital employedand customer satisfactionpercentage).

Nonfinancial measures (notexpressed in dollars, yen, pound,euros, etc.).

Measures are performed mainlymonthly and sometimes in aquarterly time period.

Measured frequently (e.g., 24/7,daily or weekly).

Reported to the board as a goodsummary of progress to date.

Reported to the CEO and seniormanagement team.

It does not help staff or managementbecause nowhere does it tell whatyou need to fix.

All staff understand the measure andwhat corrective action is required.

Commonly, the only personresponsible for a KRI is the CEO.

Responsibility can be tied down to ateam or a cluster of teams workingclosely together.

A KRI is designed to summarizeprogress in a particular area.Tends to focus on the externalcritical success factors as seenthrough the board member’s eyes.

Significant impact (e.g., it impacts onmore than one internal criticalsuccess factor and more than onebalanced scorecard perspective).

A KRI is a result of many activitiesmanaged through a variety ofperformance measures.

Focuses on a specific activity.

Normally reported by way of a trendgraph covering at least the lastfifteen months of activity.

Normally reported by way of anintranet screen indicating activity,person responsible, past history,so that a meaningful phone callcan be made.

15

EXHIBIT 1.4 Difference between RIs and PIs

RIs PIs

Can be financial and nonfinancial. Nonfinancial measures (notexpressed in dollars, yen, pound,euros, etc.).

Measured daily, weekly, biweekly,monthly, or sometimes quarterly.

Measured daily, weekly, biweekly,monthly, or sometimes quarterly.

Designed to summarize overallperformance by a collection ofdiverse teams.

Tied to a discrete activity, and thusto a team, or a cluster of teamswho work closely together.

A result of more than one activity. Focuses on a specific activity.Does not tell you what you need to

do more or less of.All staff understand what action is

required to improve performance.Normally reported in a team

scorecard.Normally reported in a team

scorecard.

16

EXHIBIT 1.5 Past/Current/Future Performance Measures Analysis

Worksheet Causing Late Planes

Past Measures (pastweek/two weeks/month/quarter)

Current Measures(real-time/today/yesterday)

Future Measures(next week/month/quarter)

Number of late planeslast week/last month.

Planes more than twohours late (updatedcontinuously).

Number of initiatives tobe commenced in thenext month, twomonths to target areasthat are causing lateplanes.

Date of last visit by keycustomer.

Cancellation of order bykey customer (today).

Date of next visit to keycustomer.

Sales last month in newproducts.

Quality defects foundtoday in newproducts.

Number ofimprovements to newproducts to beimplemented in nextmonth, months twoand three.

17

EXHIBIT 1.6 Examples of More Future Measures

Future innovations To be an innovative organization we need tomeasure the number of initiatives which areabout to come online in the next week, twoweeks, and month.

Future sales meetings To increase sales we need to know thenumber of sales meetings which havealready been organized/scheduled with ourkey customers in the next week, twoweeks, and month.

Future key customer events To maintain a close relationship with our keycustomers a list should be prepared withthe next agreed social interaction (e.g., dateagreed to attend a sports event, a meal, theopera, etc.).

Future PR events To maintain the profile of our CEO we needto monitor the public relations events thathave been organized in the next one tothree, four to six, seven to nine months.

Future recognitions To maintain staff recognition the CEO needsto monitor the formal recognitions plannednext week/next two weeks by the CEO andSMT.

Key dates Date of next product launch, date for signingkey agreements.

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EXHIBIT 1.7 The Differences in the Four Measures and the Time Zones

19

EXHIBIT 1.8 The 10/80/10 Rule

Types of Performance Frequency of Number of

Measures (PMs) Characteristics Measurement Measures

1. Key result indicators (KRIs) give an overviewon the organization’s past performance and areideal for the board as they communicate howmanagement have performed (e.g., return oncapital employed (%), employee satisfaction(%), net profit before tax and interest).

These measures can be financialor nonfinancial. Does not tellyou what you need to domore or less. A summary ofthe collective efforts of a widenumber of teams.

Monthly, quarterly Up to 10

2. Result indicators (RIs) give a summary of thecollective efforts of a number of teams on aspecific area (e.g., yesterday sales ($),complaints from key customers)

24/7, daily, weekly,biweekly, monthly,quarterly

80 or so. If it gets over150 you will begin tohave serious problems

3. Performance indicators (PIs) are targetedmeasures that tell staff and management whatto do (e.g., number of sales visits organizedwith key customers next week/next fortnight,number of employees’ suggestionsimplemented in last 30 days).

These measures are onlynonfinancial. Staff know whatto do to increase performance.Responsibility can be tieddown to a team or a cluster ofteams who work closelytogether.

4. Key performance indicators (KPIs) tell staff andmanagement what to do to increaseperformance dramatically (e.g., planes that arecurrently over two hours late, late deliveries tokey customers).

24/7, daily, weekly Up to 10

(you may haveconsiderably less)

20

Scorecard on the weeklyKPIs

24/7 or 9 a.m. report onup to five KPIs (e.g.,number of planes overtwo hours late)

Reporting performance tomanagementand teams

Monthly dashboard of up to 10 KRIs(such as customer satisfaction, takeup of new services, innovation, stateof finances, etc.)

Monthly team and business unitscorecards with relevant PIs and RIs

Dashboard forthe Board/GovernmentOfficial

Monthly organizational scorecardson the major PIs and RIs

Weekly reporting onsome PIs and RIs

Monthly report to the organization'sstaff (icons not numbers)

Weekly reporting

Monthly reporting

24/7 or 9 a.m. reporting

Frequency of reporting

EXHIBIT 1.9 Suggested Reporting Framework

21

Balanced scorecard implementation4. We have established our balanced scorecard

perspectives◽ Yes ◽ No

5. The project was largely run by in-house resources withsome outside advisory assistance

◽ Yes ◽ No

6. Measures have been ascertained by teams so there isbalance between the scorecard perspectives

◽ Yes ◽ No

7. Measures have be derived from brainstorming theidentified critical success factors

◽ Yes ◽ No

8. Measures have been segregated into different types sothat only measures with specified criteria are calledKPIs

◽ Yes ◽ No

9. There is a sound understanding about performancemeasurement, KPIs, critical success factors within thesenior management team

◽ Yes ◽ No

How KPIs are operating10. All measures are carefully monitored to ensure they pro-

mote appropriate behavior◽ Yes ◽ No

11. Teams monitor their performance measures ◽ Yes ◽ No12. Senior management review performance measures

more frequently than monthly◽ Yes ◽ No

13. The CEO is daily focusing on the KPIs and contactingthe appropriate people to rectify identified issues

◽ Yes ◽ No

14. There are less than 10 KPIs in the organization and theseare monitored frequently 24/7, daily, or weekly

◽ Yes ◽ No

15. KPIs are not linked to pay; they are seen as “tickets tothe game”

◽ Yes ◽ No

Your score:Under 5: Need to review the reference books listed in Chapter 15 Between 5 to 10: This book will assist you with improvements Over 10: You should write a case study and I will feature it

EXHIBIT 1.10 Assessing Your Progress with PerformanceMeasures Checklist

Is it covered?Knowledge of the critical success factors1. Senior management have a common understanding of

the organization’s success factors◽ Yes ◽ No

2. The organization has identified the critical successfactors

◽ Yes ◽ No

3. The critical success factors have been communicated toall staff and are used on a daily basis to focus priorities

◽ Yes ◽ No

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EXHIBIT 2.1 The Difference Between Result And Performance Indicators

The Two Groups of MeasureThe Two Types of Measuresin Each Group

Result indicators reflect the fact thatmany measures are a summation ofmore than one team’s input. Thesemeasures are useful in looking at thecombined teamwork but,unfortunately, do not helpmanagement fix a problem as it isdifficult to pin-point which teamswere responsible for the performanceor nonperformance.

Result Indicators (RIs) and KeyResult Indicators (KRIs)

Performance indicators are measuresthat can be tied to a team or a clusterof teams working closely together fora common purpose. Good or badperformance is now the responsibilityof one team. These measures thusgive clarity and ownership.

Performance Indicators (PIs) andKey Performance Indicators(KPIs)

23

EXHIBIT 2.2 Performance-Related Pay Systems That Will Never Work

ScorecardPerspective

PerspectiveWeighting Performance Measure

MeasureWeighting

Financial Results 60% Economic value added 25%Unit’s profitability 20%Market share growth 15%

Customer Focus 20% Customer satisfactionsurvey

10%

Dealer satisfaction survey 10%Internal Process 10% Ranking in external quality

survey5%

Decrease in dealer deliverycycle time

5%

Innovation andLearning

10% Employee suggestionsimplemented

5%

Employee satisfactionsurvey

5%

24

EXHIBIT 2.3 Similarities between Hoshin Kanri and Balanced Scorecard

Perspectives

Hoshin Kanri Balanced Scorecard

Quality objectives and measures Customer focusCost objectives and measures FinancialDelivery objectives and measures Internal processEducation objectives and measures Learning and growth

25

EXHIBIT 2.4 The Suggested Six Perspectives of a Balanced Scorecard

FINANCIALRESULTSAsset utilization, salesgrowth, riskmanagement,optimization ofworking capital, costreduction

CUSTOMERFOCUSIncrease customersatisfaction, targetingcustomers whogenerate the mostprofit, getting close tononcustomers

ENVIRONMENTAND COMMUNITYEmployer of firstchoice, linking withfuture employees,community leadership,collaboration

INTERNALPROCESSDelivery in full ontime, optimizingtechnology, effectiverelationships with keystakeholders

STAFFSATISFACTIONRight people on thebus, empowerment,retention of key staff,candor, leadership,recognition

INNOVATION ANDLEARNINGInnovation,abandonment,increasing expertiseand adaptability,learning environment

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EXHIBIT2.5

How

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✓✓

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✓possible

27

EXHIBIT 2.6 Alternative to the Lead/Lag Debate

Past Measures Current Measures Future Measures

(past week/twoweeks/month/quarter)

(24/7 and daily) (next day/week/twoweeks/month/quarter)

Number of lateplanes lastweek/last month

Planes more than twohours late (updatedcontinuously)

Number of initiatives, to becommenced in monthsone, two, three to targetareas which are causinglate planes.

Date of last salesvisit to keycustomers

Key customer ordercancellation (today)

Date of next visit to keycustomers and date ofnext social interactionwith key customers

New product salesin last month

Quality defects foundtoday in newproducts

Number of improvementsto new products to beimplemented in nextmonth, months two andthree

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EXHIBIT 2.7 Strategy Mapping

29

Level 1

Level 2

Divisional

PM <20

Departmental

PM <20

TeamPM <20

Third*

All KPls reported to SMT

Some KPls

reported to SMT

Som

e KPls

repo

rted

to S

MT

KP

ls r

eport

ed

Only

rele

vant

Level 3 Third*

Level 4 First*

<20 Organizational

wide RIs and

PIs and

<10 KPIs <10

Organization-

wide KPIsSecond*

* = order of process

PM = Performance measures

EXHIBIT 2.8 Interrelated Levels of Performance Measures in an Organization

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EXHIBIT 2.9 How Strategy and the CSFs Work Together

31

EXHIBIT 3.1 Dysfunctional Performance Measures Checklist

Does it happen?1. Is the reward structure tied to the key performance

indicators?◽ Yes ◽ No

2. Are measures constructed by teams or individualsbased on what they think will work?

◽ Yes ◽ No

3. Are annual targets set that will trigger bonuses ifmet?

◽ Yes ◽ No

4. Does the organization believe that performance canonly be achieved if there is a financial rewardattached to that performance?

◽ Yes ◽ No

5. Are measures typically adopted by whoever dreamsthem up, without the necessity to trial them toassess their potential negative behavioral impact?

◽ Yes ◽ No

6. Are there instances where staff are asked “to force”compliance to a measure just to achieve a targeteven though the action may damage theorganization’s reputation?

◽ Yes ◽ No

7. Have you got some measures that are leading todysfunctional behavior?

◽ Yes ◽ No

8. Have you had to remove measures due to the dam-age they have created?

◽ Yes ◽ No

9. Do you have measures that are solely used to makedepartments look good rather than the benefit theymight give to the organization?

◽ Yes ◽ No

10. Do you have instances in your organization wherethe messenger has been shot when they report the“bad news”?

◽ Yes ◽ No

11. Do you have a history of “gaming”performance measures in the organization?

◽ Yes ◽ No

12. Do you have over 100 measures in yourorganization?

◽ Yes ◽ No

13. Are measures implemented without a fullcost-benefit analysis performed?

◽ Yes ◽ No

14. Is there a high degree of cynicism about theeffectiveness of performance measures in yourorganization?

◽ Yes ◽ No

15. Are the CEO and senior management team naïvewhen it comes to performance management?

◽ Yes ◽ No

Your score: Every yes indicates a problem.With over five affirmatives, it may be best to put a temporary halt on using all performance measures in the organization until they have been reviewed for their damaging dark side.

32

EXHIBIT 4.1 Revitalizing Our Performance Management Model

33

EXHIBIT 4.2 Peter Drucker’s Lessons for Performance Management

Peter Drucker’s WisdomImpact on PerformanceManagement

Know your customers. Explicitlydefining customer groups is thefoundation stone of an outside-inperspective. One charity Druckernoted had 46 customer segments.

This will impact measurementbecause we can now measure thekey segments more frequently forrevenue, satisfaction, growth, andso on.

Have an outside-in focus to yourbusiness. See the operation fromyour customers’ perspective,especially the perspectives of yourimportant customers.

Outside-in initiatives will bemeasured, particularly as afuture-orientated measure.For example, date of nextcustomer feedback survey.Implementation of surveyrecommendations beingmonitored weekly after the surveyreport is issued.

Focus on your noncustomers. Whichof your noncustomers should yoube doing business with?

We will need to measure the successwe have in doing business withnew targeted customers.

Look for opportunities as if your lifedepended on it. Druckeremphasized the importance ofinnovation.

Measurement of innovation will bevery important.

Management versus Leadership.Management is ensuring that staffare doing things right andleadership is ensuring that staff aredoing the right thing.

Measurement of the progress withleadership training anddevelopment will be veryimportant.

Recruitment is a life-and-deathdecision. Drucker was adamantabout the significance of recruitingthe right staff.

The recruiting of the KPI teamshould be done very carefully,ensuring they have the right mixof knowledge, experience, andcredibility within the organizationto be successful.

Many organizations focus on“recruiting the right people all thetime” as a critical success factor,and they will need to developspecific measures to trackrecruitment processes.

34

EXHIBIT 4.2 (Continued)


Do not give new staff new assignments.He referred to these jobs as widowmakers, jobs where the incumbentdid not have a chance to succeed.

In this KPI project, it is important toensure that the project team ismade up of experienced staff whoknow the critical success factorsand the members of the seniormanagement team. Bringing inconsultants to manage the KPIproject will, more than likely, leadto failure. Drucker told you so.

The scarce resource in anorganization is performing people.Drucker highlighted that thesescarce resources need to bespecifically monitored and not takenfor granted. Their goals should bechallenging enough to stretch themand keep them interested.

Performance measures will bedesigned to monitor highperforming staff.

Outstanding performance isinconsistent with a fear for failure.Without the will to take risks, toventure into the unknown and letgo of the familiar past, anorganization cannot thrive in thetwenty-first century.

Measuring the go-forward nature ofthe organization and themeasurement of the mistakes willflag whether we are movingquickly enough. Mistakes are seenas necessary learning experiences.

Today’s advanced knowledge istomorrow’s ignorance. Drucker sawit as very important to harnessknowledge in every aspect of theorganization.

It is necessary to measure theextent the organization isgathering, sharing, and usingknowledge.

Abandonment. Drucker said: “The firststep in a growth policy is not todecide where and how to grow. It isto decide what to abandon. In orderto grow, a business must have asystematic policy to get rid of theoutgrown, the obsolete, and theunproductive.”

Promote Peter Drucker’s concept ofabandonment. Many existingmeasures should be abandonedalong with processes and reports.The KPI project needs space towork. Other systems need to beabandoned to allow enough timefor the KPIs to function properly.

35



He also said: “Don’t tell me whatyou’re doing, tell me what you’vestopped doing.”

Measuring the extent of innovation andabandonment will help focusmanagement’s attention on these twoimportant areas. Abandonment is asign that management is recognizingthat some initiatives will never workas intended and it is better to facethis reality sooner than later.

The amount of abandonment willneed to be measured.

Collaborate with other organizations,even your competitors. Jack Welchturned GE into a powerhouse bystriving to focus on what GE wasgood at. This led Welch to followDrucker’s advice on collaboration,and he pointed out that “Your backroom is someone’s front room.” Inother words, if others can do a jobbetter than you can, subcontract tothem rather than diverting energy tobe good at everything, a task that isimpossible to achieve.

We will need to measure the extentto which collaboration ishappening. The date of the nextcollaboration meeting, the dateof the next shared collaboration,the date of the next agreement tocontract out a service can all bemeasured.

(continued)

Know what information you need todo your job and from whom youneed it. When and how? Byanswering these basic questions, wecan streamline much of thereporting formats, dispensing withthose reports that add no value.

We can measure the reports thathave been removed fromcirculation.

Understand the importance ofself-renewal. Drucker emphasizedthe importance for leaders to havebalance, to have interests outsidethe work environment that helpthem maintain a balancedperspective.

The chief executive officer (CEO)should monitor the extent towhich the senior managementteam and their direct reports areinvesting in self-renewal.

36



Have three test sites. Drucker pointedout that to do one pilot was neverenough.

On a KPI project, we should followthe sage’s advice and pilot the KPIproject in three entities.

Place people according to theirstrengths. Drucker was adamant thatyou focus on what people can dorather than focus on what theycannot do well.

The selection of the KPI team shouldfocus on the candidates’ strengths.Organizations can highlight thosestaff members who are not in theright place (e.g., not performing)and take action to reposition themor assist them to find the right jobelsewhere.

Generate three protégés for each seniorposition.

Status of succession planning for allkey positions should be monitoredon a quarterly basis. FollowingDrucker, any shortage from thethree protégés for each seniorposition should be reported as anexception once a month.

37

EXHIBIT 4.3 Jim Collins’s Lessons for Performance Management

Jim Collins’ WisdomImpact on PerformanceManagement

By measuring the next occurrenceof balanced feedback on keymanagers (360-degree feedback)we will ensure managers getappropriate feedback on theirleadership.

Getting the right people on the bus.Collins emphasized the need fororganizations to place more emphasison recruiting.

The recruiting for the KPI teamshould be conducted carefully.Organizations can measure amanager’s rate of success atrecruiting. Managers who have arecord of failure should beretrained or relieved of recruitingduties.

Getting the wrong people off the bus.Collins is very consistent withDrucker. Move staff on if they are apoor fit with the organization’svalues.

Organizations can highlight thosestaff members who are not in theright place (e.g., not performing)and take action to repositionthem or assist them in findingthe right job elsewhere.

The “hedgehog” concept. Collins pointsout that organizations need to knowwhat they can be the best in theworld at, what they are deeplypassionate about, and what drivestheir economic engine. Organizationsneed to translate that understandinginto a simple, crystal clear conceptthat guides all their efforts.

By understanding an organization’scritical success factors andderiving performance measuresfrom them, you will create analignment that is consistent withCollins’ thinking.

(continued)

The flywheel effect. This refers toforward steps consistent with thehedgehog concept. The resultantaccumulation of visible results willlead to a lineup of people energizedby the results.

By measuring within the criticalsuccess factors, we will beconsistent with Collins’ thinking.

38



Big Hairy Audacious Goals (BHAGs).aJim Collins and Jack Welch are atone here. They say incrementalimprovement will never stretch yourthinking. We are asking what wouldwe need to do to achieve this BHAG.It is not implying that falling short ofthe BHAG is a failure or that bonuseswill not be paid.

The KPI team needs to set someBHAGs for the project that willstretch the KPI team’s thinking.

The silent creep of impending doom.Collins warns us about the first stageof decline, “hubris born of success,”excessive pride leading themanagement team down the slipperyslope. An organization always needsto focus on its economic engine,make sure its flywheel is turning, andmaintain a profound understanding ofthe fundamental reasons for success.

The highlighting of the criticalsuccess factors coupled with theKPIs will ensure the seniormanagement team focuses onwhat matters to their flywheel.

Try a lot of stuff and keep what works.Collins points out that visionarycompanies often made their bestmoves not by detailed strategicplanning, but rather byexperimentation, trial and error,opportunism, and, in some cases, byaccident. Collins comparedinnovation to branching and pruning.Clever gardeners let a tree addenough branches (variation) and thenprune the dead wood (selection).

The CEO and senior managementteam need to encourageinnovation. The number ofinnovations by teams should bemeasured. The benchmark isToyota, which has an average often implemented innovations peremployee per year.

39



Risks above or below the waterline.Collins specifies that, when makingdecisions, you need to know if theywill affect you above or below thewaterline if they go wrong. Thosebelow the waterline will obviouslysink the organization. Governmentand nonprofit agencies are protectedby their surety of annual incomefrom the public purse and, hence,are so easily blind to theserisks.

The focus on the right measureswill give clarity and purpose.

Grasping for salvation. Collins pointsout the propensity for organizationsin this stage to bring in an outsideCEO to be the savior. These initiativesfail more often than they succeed. AsWelch observes, to bring in a CEOfrom outside is a sure sign that yourorganization failed to nurtureprotégés. In the public sector, it iseven worse where excellent protégésare deliberately overlooked to bringin an externalperson.

In the private sector this stage ofdecline is categorized, as Collinspoints out, by the silver bullet, amassive merger that will turnthe organization around.Naturally enough, less thanone in six of these mergersever breaks even.

It is important for all organizationsto revisit their values and toinclude a bold statement thatindicates they should developtheir own leaders. The progressin this development of in-houseleaders should be measured.

We can also measure the numberof protégés for all seniorpositions.

aJim Collins and Jerry Porras, Built to Last: Successful Habits of Visionary Companies(New York: HarperBusiness, 1994).

40

EXHIBIT 4.4 Jack Welch’s Lessons for Performance Management

Jack Welch’s WisdomImpact on PerformanceManagement

Candor. Welch has reinvigorated thisword and placed it in front ofmanagement. He said, “It is aleader’s obligation to tell their staffhow they are doing and how theycan improve performance in acandid way.” As Welch points out,candor allows more people toparticipate in the conversation,generates speed, cuts costs, andencourages underperformers toreflect on their achievements andmove forward or move on.

The KPI team needs to ensure that itis open and honest aboutperformance measurement in theorganization.

Jack Welch’s 20/70/10 differentiationrule. Tied to candor is Welch’s20/70/10 differentiation rule. Thetop 20 percent of performersshould be promoted into jobs thatare a good fit for their strengths,assist the next 70 percent to bettermeet their potential, and make itclear to the bottom 10 percent thattheir future lies elsewhere. Goodcommunication will see these staffmembers moving on to betterpastures for themselves; failingthat, these staff members need tobe assisted in moving on.

It is important for organizations tomeasure the handling of poorperformers. Staff in the wrongpositions may be a significantissue for the organization.

Organizations can measuremanagers’ success rates atrecruiting.

A cluster of mentors. As Welch says,“There is no right mentor for you;there are many right mentors.” Hesees mentoring more holistically.A mentor can come from a staffmember many levels below whopasses their knowledge on to you.In Winning, Welch was forevergrateful for the young humanresources (HR) advisor whopatiently helped him master e-mail.

Ensure that all KPI team membershave appropriate mentor support.

Measures need to be developed tomonitor take-up of mentors bymanagement and staff. First, targetsenior managers who do not havea mentor.

41



Read, read, read. Great leaders havea thirst for knowledge and areconstantly looking at ways tomove their learning on; they arecontinuously reinventingthemselves. Welch was an avidreader of the financial andmanagement press and journals.He makes it very clear that it is aleader’s role to be up to date.

The KPI team will need to read thebooks indicated in the epilogue.

Organizations can measure theextent to which the seniorexecutives are maintaining theirlearning, especially the CEO.

Raise the profile of human resourcesin your organization. Greatleaders like Jack Welch havealways recognized that the humanresources team are vital to theorganization. At GE, the head ofHR was a member of the seniormanagement team and

The KPI team should work closelywith the HR team. The HR teamwill be able to help sell therequired change and get moresenior managers on board. Insome organizations, the balancedscorecard has been implementedby the HR team.

the team was involved in allrecruiting, promoting, training,and disciplining processes.

Performance measurement initiativeswill work much better with skilledHR input. Leaving humanresources to a young graduate towrite meaningless policy insertsfor a never-read manual is asurefire way to run down anorganization.

(continued)

Make innovation work. Welch was achampion of innovation. He wanted innovation to be part of the culture. Workshops were held called “work-out process” where groups discussed better practices and at least 75 percent of all recommendations from the brainstorming sessions had to be given a yes or no by the manager at the close of the workshop and the remaining recommendations had a maximum 30-day gestation

Innovation needs to be measuredboth in the past (“How manyinnovations did each team do lastmonth?”) and in the future (“Howmany innovations will be up andrunning in the next two weeks,four weeks?”).

42



Recognition and celebration. Welchsays great leaders celebrate more.As he points out, “Work is toomuch a part of life not torecognize moments ofachievement.” You can sense fromlistening to his webcasts that hiscelebrations would have been funto attend.

Welch was all about makingbusiness fun. You need to realizethat it is not life or death, but agame you want to win.

The KPI project team will need to beactive with recognition andcelebration to assist with buy-inand maintain interest andmomentum.

Recognition and celebration needsto be measured both in the past(“the number of recognitions andcelebrations that occurred lastmonth”) and in the future(“recognitions and celebrationsplanned for next week, nextfortnight”).

period before a decision had to be made. This technique forced the decision makers to apply innovation practices, which allowed for some failure but ensured much success at the same time.

Government or nonprofit agenciesalso need to measure the numberof positive press releases printedin the papers for, as sure as nightfollows day, the press will have afield day on the negative eventsthat are press worthy and happenbecause of the very nature of thework a government or nonprofitagency performs.

Crisis management.All exceptional leaders aregreat in a crisis and Welch is noexception. He had a large realismstreak in his body. He wouldtake the necessary action, facethe necessary music, and moveon. Welch handled each crisison the following assumptions:

It would be worth measuring theintegrity gap within theorganization, that is, the timebetween when an event is knownabout and when it is conveyed tothe senior management team.

43



◾ The crisis will be worse than itfirst appears.

◾ The bad news will come outsometime, so may as well facethe music now.

◾ The situation will be portrayedin the worst possible light by thepress.

◾ There will be carnage.◾ His organization will survive.

Setting goals that stretch (Big hairyaudacious goals, as Jim Collinswould say). Welch liked to seegoals that were a mix of possibleand the impossible. He went on tosay, “Effective leaders are not

In performance measurement, it is asure way to limit performance bylinking KPIs to bonuses. The keydriver here will be politics andquestionable measurementpractices. (See Appendix A.)

afraid to envision big results.” Byraising the bar so high that staffand management were forced tototally rethink the route plan, newways had to be found to succeedand so often this was achieved.

Be number one or two in the game.Welch was aware that many ofGE’s investments did not makesense. The answer would havebeen no to the Drucker question,“If you were not in the businesswould you enter it now?”Consequently Welch was knownas ruthless for his directive of “fixit, sell it, or close it” when abusiness did not meet the strictcriterion of being either numberone or two in that particularsector.

We need to measure our success atservice delivery and the amount ofabandonment we are doing inthose services that can be betterdone by other organizations.

44

EXHIBIT 4.5 Thomas Peters and Robert Waterman’s Lessons for

Performance Management

Peters and Waterman’s WisdomImpact on PerformanceManagement

Understand human motivations. In InSearch of Excellence, Peters andWaterman go into much detail aboutbehaviorist studies.

This book has as its foundationan emphasis on understandinghuman nature in order tominimize the carnageassociated with performancemeasurement.

Importance of chaos rather thanunnecessary order. Throughout thefirst three chapters of In Search ofExcellence the importance of allowingoverlap, internal competition,impromptu contact, while minimizinghead office command and controlwas highlighted through the casestudies quoted.

The project team needs to bewary of adopting the easiercommand and controlapproach. The KPI team mustallow a fair degree ofautonomy in the pilots androllout stages so long as thefoundation stones are intact.

A bias for action. The emphasis is onaction, getting something intoprototype, test, test, test rather thantrying to second guess. Thedisbanding of committees that meetand do not convert anything to actionis a very strong message.

The CEO should have a weeklyrecord of the last meaningfulaction from every standingcommittee. If the last actionwas over six weeks ago, maybeit is time to abandon it.

Close to the customer. Being close to thecustomer does not only help withcustomer retention, it is the majorsource of innovation. Peters andWaterman found compellingevidence that customers are the mainsource of innovative ideas.

We need to measure thefrequency of our interactionwith customers:◾ Date of next contact with key

customers.◾ Date of next customers’ focus

group.◾ Date of next research project

into customer needs andideas.

◾ Follow-up on ideas fromcustomers.

(continued)

Autonomy and entrepreneurship. Petersand Waterman observed that radicaldecentralization and autonomy, withtheir attendant overlap, messiness,lack of coordination, and internalcompetition, were necessary in orderto breed the entrepreneurial spiritand champions who were required totake risks in developing new ideas.

We need to measure the speed ofdecentralization andempowerment until it is welland truly embedded.

45


Peters and Waterman’s WisdomImpact on PerformanceManagement

◾ Intense communication◾ Tolerating failure◾ Internal competition◾ Promote legends◾ Absence of excessive planning and

paperworkProductivity through people. Peters and

Waterman noted that the followingwere evident in the best-runorganizations:◾ Unabashed hoopla◾ Internal competition◾ Family atmosphere◾ Available information◾ Trust◾ Keeping units small and fast and

flexible

The KPI team will need to applythese techniques to besuccessful.

Stick to the knitting. Peters andWaterman coined this famous phrase,and it is consistent with Jim Collins’,“hedgehog” concept.

We can measure the degree towhich resources and time aredirected away from the coreactivities, indicating a loss offocus.

Simple form, lean staff. Peters andWaterman offered the followingadvice:

Avoid the trap of economies ofscale—they seldom eventuate.◾ Avoid constantly hiving off into new

divisions◾ Maintain a small corporate office◾ Keep a flatter organizational

structure

We can report the levels ofcommand, the head count ofhead office, and the numbersof staff reporting to managers.

46

EXHIBIT 4.6 Gary Hamel’s Lessons for Performance Management

Gary Hamel’s WisdomImpact on PerformanceManagement

Continuous managementinnovation. You need to have aprocess for continuousmanagement innovation to be anorganization that is capable oftrauma-free renewal rather thanone that is moved to changethrough a crisis.

The KPI team needs to be veryopen to new managementthinking and processes. It is veryimportant that new managementconcepts are embraced by theproject team.

Creative apartheid. Hamel pointsout that most human beings arecreative in some sphere of theirlives. The point he makes is thatthis creativity needs to beembraced at the workplace. Hebelieves that creativity can bestrengthened through instructionand practice, (e.g., Whirlpoolhas trained more than 35,000employees in the principles ofbusiness innovation).

The KPI team must be open tonew ideas during the project. Beflexible with how workshops arerun, ensuring that creativity isgiven time to flourish.

Too much hierarchy, too littlecommunity. Hamel points outhierarchies are good ataggregating effort (coordinatingactivities) but not good atmobilizing effort (inspiringpeople to go above andbeyond). The more youconsolidate power in the handsof a few leaders, the less resilientthe system will be.

The KPI team must promote acommunity feel to the project,selling the benefits through theemotional drivers and gainingcredibility by abandoningprocess, measures, and reportingthat is not delivering.

(continued)

Aggregate collective wisdom. Hamelpoints out the compellingevidence that “large groups ofpeople are often smarter thanthe smartest people in them.”

The KPI team should consultwidely and hold sessions duringeach workshop to ensure anadequate chance for all to havetheir say. This is best done bylimiting each workgroup in theworkshop to no more thanseven.

47



Embrace differences. Hamel is veryconsistent about the need to:◾ Embrace irregular people; their

irregular ideas can be veryvaluable

◾ Look for positive deviants

The KPI team should be selectedfrom all experienced employees.It is important to consider thoseemployees who have alwaysshaken the cart. They may havethe X factor to make this projectwork.

Mission matters. The mission mustbe compelling enough toovercome the gravitational pullof the past and spur individualrenewal.

The KPI team should ensure itsmission statement is wordedcarefully so it will energize andassist with the selling of thewinning KPI methodology.

Opt-in commitment. Hamelbelieves organizations shouldhave an opt-in and self-chosencommitment.

The KPI team should have an openselection process so that a widenet is cast for the best teammembers. Passion forperformance management willbe a very important attribute tolook for.

The Internet and intranet should beused widely by the KPI team totap into the collective wisdomwithin the organization.

New management order. Hamelwants to see a new managementorder and the signs are there inhow the Internet works. Hepoints out that the reason theInternet is so successfulis:

The KPI team members shouldbecome familiar with GaryHamel’s book The Future ofManagement.

48



◾ Everyone has a voice.◾ The tools of creativity are

widely distributed.◾ It is easy and cheap to

experiment with.◾ Capability counts more than

credentials and titles.◾ Commitment is voluntary.◾ Authority is fluid and

contingent on value added.◾ The only hierarchies are

“natural” hierarchies.◾ Just about everyone is

decentralized.◾ Ideas compete on an equal

footing.◾ It’s easy for buyers and sellers

to find each other.◾ Resources are free to follow

opportunities.◾ Decisions are peer-based.

49

EXHIBIT 4.7 Jeremy Hope’s Lessons for Performance Management

Jeremy Hope’s WisdomImpact on PerformanceManagement

Most systems incorrectly aim toimprove top down control—ratherthan bottom-up.

The KPI project needs to focus ona bottom-up process.

Always use tried and testedtechnologies.

The KPI team should utilize onlytried and tested balancedscorecard software.

Be skeptical about investing in new,untried systems

Cut back on measurement to the pointwhere only six or seven measuresare used at every level.

Follow the 10/80/10 principle andensure that teams do not havemore than six to seven measures.

Recognize and reward shared successon relative performance withhindsight, not on meeting fixedtargets.

If there is an incentives scheme,ensure that it is consistent withthe foundation stones inAppendix A.

Best to have team rather thanindividual incentives.

Be wary of aggressive targets andincentives. They lead to high-riskstrategies and the wrong behavior.

Re-read Chapter 3 on theUnintended behavior—thedark-side of performancemeasures.

Avoid turning measures into targetsand performance contractsotherwise they will lead to thewrong behavior.

Important to understand the issueabout why a fixed performancecontract is always broken. It iseither too hard or too soft.

When using the balanced scorecardbe careful that measures do notbecome an annual contract.

Select operating measures on the basisof whether they help managers toimprove the system. Measures thatdon’t pass this test should bequestioned and probablyabandoned.

We need to avoid all measures thatdo not help improve or supporta system.

Whatever you do don’t makemanagement life more complex!Avoid complex systems. Aim tosimplify everything at every level.

The winning KPIs methodologyfollows this advice.

50

EXHIBIT 4.8 Toyota’s 14 Management Principles

Philosophy Principle 1: Base your management decisions on along-term philosophy, even at the expense ofshort-term financial goals.

Process(Eliminate Waste)

Principle 2: Create continuous process flow to bringproblems to the surface.

Principle 3: Use “pull” systems to avoidoverproduction.

Principle 4: Level out the workload (Heijunka).Principle 5: Build a culture of stopping to fix

problems, to get quality right the first time.Principle 6: Standardized tasks are the foundation

for continuous improvement and employeeempowerment.

Principle 7: Use visual control so no problems arehidden.

Principle 8: Use only reliable, thoroughly testedtechnology that serves your people and processes.

People andPartners(Respect,Challenge, andGrow Them)

Principle 9: Grow leaders who thoroughlyunderstand the work, live the philosophy, andteach it to others.

Principle 10: Develop exceptional people and teamswho follow your company’s philosophy.

Principle 11: Respect your extended network ofpartners and suppliers by challenging them andhelping them improve.

Problem solving(ContinuousImprovementand Learning)

Principle 12: Go and see for yourself to thoroughlyunderstand the situation (Genchi Genbutsu).

Principle 13: Make decisions slowly by consensus,thoroughly considering all options and thenimplement the decisions rapidly.

Principle 14: Become a learning organizationthrough relentless reflection (Hansei) andcontinuous improvement (Kaizen).

51

X

X

X

XX

X

X Quarterly update of rolling forecast completed in week two (June, Sept, Dec)XX Quarterly update and annual plan completed in weeks two and three in March

Forecast monthly in detail spending 60 percent of available time getting it rightForecast monthly only spending 20 percent of available time estimating numbersForecast in quarterly splits only spending 20 percent of available time estimating numbers

First look at the annual plan

Jun Jul AugSep Oct NovDec Jan Feb Mar Apr MayJun Jul Aug Sep Oct NovDec Jan Feb Mar Apr MayJun Jul AugSep Oct NovDec

18 months

Annual plan finalized

EXHIBIT 4.9 The Quarterly Rolling Planning ProcessSource: David Parmenter, Winning CFOs: Implementing and Applying Better Practices, copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

52

EXHIBIT 5.1 Linkages between Strategy, Critical Success Factors, and Performance Measures

53

EXHIBIT 5.2 Extract from the Strategy Slides Available in the Electronic

Media

What the playing field looks like now(competitor analysis/market share)

Competitors Global Share Market #1 Market #2Us

Competitor #1

Competitor #2

Competitor #3

New Entrants Global Share Market #1 Market #2New entrant #1

New entrant #2

New entrant #3

What the playing field looks like now #2(What are the characteristics of this business?)

MainProducts

Commodity/High Value

Long/ShortCycle

Positionon Growth

Curve

MainDrivers of

Profitability

54


CustomerSatisfaction

FinancialResults

InternalProcesses

StaffSatisfaction

Communityand Environment

Strategy # 1 Strategy # 2 Strategy # 5Strategy # 4Strategy # 3

Mission/Vision/Values/Management Principles

EXHIBIT 5.3 Mapping Strategies to the Six Balanced-Scorecard Perspectives

55

Warning: little progress made Progress Against StrategySome progress but behind schedule Status as of May 31, xxxxOn track or finished

Status Comments (state action that is planned to happen if status is "amber or red" )Strategy A xxxxxxxxxxxxxxxxxxxxxxx

A1 Initiative xxxx xxxx xxxxxxx xxx xxx Completed in third week of May

A2 Initiative xxxx xxxx xxxxxxx xxx xxx xxxxxxxxxx xxxxxxx xxxx xxx xxxx xxxxx xxxx xxxxxx xxxxxxxx xxxx xxxx x xxxxxx x xxxxxx xxxxxxxx xxxx xxxx

A3 Initiative xxxx xxxx xxxxxxx xxx xxx xxxxxxxxxx xxxxxxx xxxx xxx xxxx xxxxx xxxx xxxxxx xxxxxxxx xxxx xxxx x xxxxxx x xxxxxx xxxxxxxx xxxx xxxx

Strategy B xxxxxxxxxxxxxxxxxxxx

B1 Initiative xxxx xxxx xxxxxxx xxx xxx xxxxxxxxxx xxxxxxx xxxx xxx xxxx xxxxx xxxx xxxxxx xxxxxxxx xxxx xxxx x xxxxxx x xxxxxx xxxxxxxx xxxx xxxx

B2 Initiative xxxx xxxx xxxxxxx xxx xxx Completed in March

B3 Initiative xxxx xxxx xxxxxxx xxx xxx On track, completion date mid Sept

Strategy C xxxxxxxxxxxxxxxxxxxx

C1 Initiative xxxx xxxx xxxxxxx xxx xxx Completed in third week of May

C2 Initiative xxxx xxxx xxxxxxx xxx xxx Completed in third week of May

C3 Initiative xxxx xxxx xxxxxxx xxx xxx On track, completion date end Dec

Strategy D xxxxxxxxxxxxxxxxxxxxxxx

D1 Initiative xxxx xxxx xxxxxxx xxx xxx xxxxxxxxxx xxxxxxx xxxx xxx xxxx xxxxx xxxx xxxxxx xxxxxxxx xxxx xxxx x xxxxxx x xxxxxx xxxxxxxx xxxx xxxx

D2 Initiative xxxx xxxx xxxxxxx xxx xxx xxxxxxxxxx xxxxxxx xxxx xxx xxxx xxxxx xxxx xxxxxx xxxxxxxx xxxx xxxx x xxxxxx x xxxxxx xxxxxxxx xxxx xxxx

D3 Initiative xxxx xxxx xxxxxxx xxx xxx Completed in third week of May

EXHIBIT 5.4 Report Format to Help You Report Progress, on a Monthly Basis, against the Strategic ObjectivesSource: David Parmenter, Winning CFOs: Implementing and Applying Better Practices, copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

56

EXHIBIT 5.5 Steps to Help Implement Strategy

Actioned1. Find your organization’s critical success factors in a

two-day in-house workshop.◽ Yes ◽ No

2. Hold a strategic think tank facilitated by a strategyexpert.

◽ Yes ◽ No

3. Hold a training session to cover the thinking ofDrucker, Collins, Welch, Peters and Waterman, andHamel.

◽ Yes ◽ No

4. Jeremy Hope, Read Chapter 11 on strategy in JackWelch’s book Winning.

◽ Yes ◽ No

5. Read Chapters 4 and 5 in Jim Collin’s Good to Great. ◽ Yes ◽ No6. Have a road show to explain the critical success fac-

tors and the “business as usual” strategy to staff.◽ Yes ◽ No

7. Create a weekly and monthly monitoring regime toensure that strategic initiatives are implemented.

◽ Yes ◽ No

8. Find your KPIs to lock in a 24/7 daily adherence tothe critical success factors.

◽ Yes ◽ No

9. Schedule a “blue sky” morning, once a week, onceevery two weeks, of four to five hours in a quiet spacefree from phones, emails, and meetings where all youdwell on is the future.

◽ Yes ◽ No

10. Meet with your mentor once a month to look into thefuture.

◽ Yes ◽ No

57

Prework 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Post

1 Senior management team commitment

2 Establishing a "winning KPI" project team3 Establishing a "just do it" culture and process

4 Setting up a holistic KPI development strategy

5 Marketing KPI system to all employees

6 Identifying operational critical success factors

7 Recording of performance measures in a database

8 Selecting team performance measures

9 Selecting organizational winning KPIs

10 Developing the reporting frameworks at all levels

11 Facilitating the use of "winning KPIs"

12 Refining KPIs to maintain their relevance

Project weeks

EXHIBIT 6.1 Twelve-Step Implementation of 16-Week Timeline

58

Note: The blocks indicate the elapsed time not actual time taken.

Stage Steps Prework 1 2 3 4 5 6 12 to 16 Post

1 1,4Getting the CEO and senior management

committed to the change

2 2,3Up-skill in-house resources to manage the KPI

project


4 6

Finding your organization's operational critical

success factors

5 7,8,9

Determining measures that will work in your

organization


Project weeks

7 to 11

EXHIBIT 6.2 Twelve Steps Merged into a Six-Stage Process

59

EXHIBIT 7.1 The Seven Foundation Stones in the Winning KPI Methodology

60

EXHIBIT 8.1 Lessons from the Paradigm Shifters (featured in Chapter 4)

Lesson Implication

Continuous management innovation.Gary Hamela illustrates that youneed to have a process forcontinuous managementinnovation to be an organizationthat is capable of trauma-freerenewal rather than one that ismoved to change through a crisis.

The KPI team needs to be very opento new management thinking andprocesses. It is very important thatthe project team embraces newmanagement concepts.

Creative apartheid. Hamel points outthat most of us are creative in someareas of our lives. This creativityneeds to be embraced at theworkplace. He believes thatcreativity can be strengthenedthrough instruction and practice.

The KPI team must be open to newideas during the project. Beflexible with how workshops arerun and ensure that creativity isgiven time to flourish.

Embrace differences. Hamel is veryconsistent about the need to:◾ Embrace irregular people, be-

cause their irregular ideas can bevery valuable.

◾ Look for positive deviants.

The KPI team should be selectedfrom all experienced employees. Itis important to consider those em-ployees who have always shakenthe cart. They may have the Xfactor to make this project work.

Mission matters. Hamel says that themission matters—it must becompelling enough to overcomethe gravitational pull of the pastand spur individual renewal.

The KPI team should ensure that itsmission statement is wordedcarefully so it will energize andassist with the selling of thewinning KPI methodology.

Opt-in commitment. Hamel saysorganizations should have an opt-inand self-chosen commitment.

The KPI team should have an openselection process so that a widenet is cast for the best teammembers. A passion for perfor-mance management will be a veryimportant attribute to look for.

aGary Hamel, The Future of Management (Cambridge, MA: Harvard Business SchoolPress, 2007).

61

EXHIBIT8.2

Ind

icat

ing

Ro

llo

ut

Du

rati

on

(use

asa

guid

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nly

)

Siz

eof

KP

IP

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Org

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atio

n(F

TEs)

Les

sth

an200

200

to500

500

to3,0

00

3,0

00

to10,0

00

10,0

00+

Firstphase

(two-personKPI

project

team

)

6weeks

18weeks

16to

20wee

ksfor

firstphase

Team

istoosm

all

Firstphase

(four-personKPI

project

team

)

6wee

ks(notim

esavingbutbetter

product)

16weeks

16to

20wee

ksfor

firstphase

20to

26wee

ksfor

firstphase

20to

30wee

ksfor

firstphase

Roll-outphases

(four-personKPI

team

)

Notrequired

,project

finished

10weeks

foreach

rollo

utphase

10weeks

foreach

rollo

utphase

10weeks

foreach

rollo

utphase

62

EXHIBIT 9.1 The KPI Team’s Reporting Lines

63


Lesson Implication

Do not give new staff newassignments. Peter Druckera

referred to these jobs as widowmakers—jobs where theincumbent did not have a chanceto succeed.

In this KPI project, it is important toensure that the project team ismade up of experienced staff whoknow the CSFs and the membersof the senior management team.Bringing in consultants to lead theKPI project will doom it tofailure.

Recruitment is a life and deathdecision. Peter Drucker wasadamant about the significance ofrecruiting the right staff.

The recruiting of the KPI teamshould be done very carefullyensuring they have the right mixof knowledge, experience, andcredibility within the organizationto be successful.

Embrace differences. Gary Hamelb isvery consistent with the need to:◾ Embrace irregular people; their

irregular ideas can be veryvaluable.

◾ Look for positive deviants.

The KPI team should be selectedfrom all experienced employees. Itis important to consider thoseemployees who have alwaysshaken the cart. They may havethe X factor to make this projectwork.

A cluster of mentors. As Jack Welch,c

says, “There is no right mentor foryou; there are many rightmentors.” He sees mentoring moreholistically. A mentor can comefrom a staff person many levelsbelow who passes on theirknowledge to you. In Winning,Welch was forever grateful for theyoung human resources advisorwho patiently helped him mastere-mail.

Ensure all the KPI team membershave appropriate mentor support.The KPI project team leadershould ideally have three mentors,each providing support andknowledge in a different area.◾ How to get things done in the

organization◾ How to work with a KPI project◾ How to create and maintain a

winning project team

Opt-in commitment. Hamel believesorganizations should have an“opt-in” and “self-chosen”commitment.

The KPI team should have an openselection process so that a widenet is cast for the best teammembers. Passion for performancemanagement will be a veryimportant attribute to look for.

aElizabeth Haas Edersheim, The Definitive Drucker: Challenges for Tomorrow’s Executives—Final Advice from the Father of Modern Management (New York: McGraw-Hill, 2006).bHamel Gary Hamel, The Future of Management (Cambridge, MA: Harvard Business School Press, 2007).cJack Welch and Suzy Welch, Winning (New York: HarperBusiness, 2005)

64


Lesson Implication

Abandonment. Peter Druckera said,“The first step in a growth policy isnot to decide where and how togrow. It is to decide what toabandon. In order to grow, anorganization must have a systematicpolicy to get rid of the outgrown, theobsolete, and the unproductive.”

Promote Drucker’s concept ofabandonment. Many existingmeasures should be abandonedalong with processes andreports. The KPI project needsspace to work. Other systemsneed to be abandoned to allowenough time for the KPIs tofunction properly.

Have three test sites. Peter Druckerpointed out that one pilot was neverenough.

On a KPI project, we should followthe sage’s advice and pilot theKPI project in three entities.

Recognition and celebration. JackWelchb says that great leaderscelebrate more. As he points out,“Work is too much a part of life not torecognize moments of achievement.”You can sense from listening to hiswebcasts that his celebrations wouldhave been fun to attend.

Welch was all about making work fun.Realizing that it is not life or deathbut a game you want to win.

The KPI project team will need tobe active with recognition andcelebration to assist with buy-inand maintain interest andmomentum.

aElizabeth Haas Edersheim, The Definitive Drucker: Challenges for Tomorrow’sExecutives—Final Advice from the Father of Modern Management (New York:McGraw-Hill, 2006).bJack Welch and Suzy Welch, Winning (New York: HarperBusiness, 2005).

65

EXHIBIT 10.1 Never Underestimate the Power of a Good,Well-Practiced Elevator Speech

66

http://www.davidparmenter.com

EXHIBIT 10.2 Using Post-it Stickers to Plan the Content of the

Presentation

67


Lesson ImplicationAggregate collective wisdom. Hamel

provides compelling evidence that“large groups of people are oftensmarter than the experts in them.”

The KPI team should consultwidely and hold sessionsduring each workshop toensure adequate chance for allto have their say. This is bestdone by limiting eachworkgroup in the workshop tono more than seven members.

Too much hierarchy, too littlecommunity. Gary Hamel points outthat hierarchies are good ataggregating effort (coordinatingactivities), but not good atmobilizing effort (inspiring peopleto go above and beyond). The moreyou consolidate power in the handsof a few leaders, the less resilientthe system will be.

The KPI team must promote acommunity feel to the project,selling the benefits through theemotional drivers and gainingcredibility by abandoningprocess, measures, and reportsthat are not working.

68

EXHIBIT 11.1 Characteristics of Operational Critical Success Factors and

External Outcomes

Source for TheseSuccess Factors Key Characteristics

Operational criticalsuccessfactors—five toeight

Discussions with seniorleadership team andthe oracles residing inoperations. Strategicdocumentation

24/7 daily focusInvolving most staff in

operationsAlso of concern to support

staffNeed to be described as

“what staff should do”Describing an action or

specific activities staffcan focus on

Externaloutcomes—fewerthan ten

Strategy documentation,discussions withdirectors

Success can be as a resultof the quarterly, halfyearly focus operationalCSFs (e.g., retention ofkey customers)

Sometimes project-basedfocus

Involves senior staff oftenin negotiations

Need to be described as“what success looks like”

Describing an externalresult such as growth ina new market, anincreased servicelevel, etc.

69

EXHIBIT 11.2 How Operational Critical Success Factors Drive the

Performance Measures

70

EXHIBIT 11.3 What Impacts the Critical Success Factors

71

EXHIBIT 11.4 How Strategy and the Critical Success FactorsWork Together

72


Lesson ImplicationThe “hedgehog” concept. Collins points out

that organizations need to know whatthey can be the best in the world at,what they are deeply passionate about,and what drives their economic engine.Organizations need to translate thatunderstanding into a simple, crystal clearconcept that guides all their efforts.

By understanding anorganization’s critical successfactors and derivingperformance measures fromthem, you will create analignment that is consistentwith Collins’ thinking.

The flywheel effect. This refers to forwardsteps consistent with the hedgehogconcept. The resultant accumulation ofvisible results will lead to a lineup ofpeople energized by the results.

By measuring within thecritical success factors, wewill be consistent withCollins’ thinking.

73

EXHIBIT 11.6 Contrasting Empty Statements to SMART success factors

Success factors thatare meaningless (emptywords signifyingnothing)

SMARToperationalsuccess factor

Externaloutcomes

Increased profitability Delivery in full, allthe time, to ourkey customers

Increasedprofitability byselling a higherpercentage ofhigher marginproducts

Growing customer base Delivery in full, allthe time, to ourkey customers

Retention of keycustomers

Maximizing the use of ourmost importantresource—our people

Stopping to fixproblems, to getquality right thefirst time

Supporting a positiveand vibrant culture

Maximize innovation Innovation is a dailyactivity

Product leadershipin sector

74

EXHIBIT 11.7 Sample Success Factors

Stay, say, strive engagement with staff who contribute to our successboth now… and in the future

Recruit the right people all the timeDevelop exceptional people and teams who follow our organization’s

philosophyInnovation is a daily activityWillingness to abandon activities, processes, and initiatives that are not

working or are unlikely to succeedDelivery in full, on time, all the time to our key customersMaintaining a healthy and safe workplaceWe finish what we start

75

EXHIBIT 11.8 Extract of the Agenda for the Two-Day CSF Workshop in the

Accompanying Electronic Media

Day 1From 8:30 a.m. Registration9:00 Opening remarks by CEO—Setting the context of the work-

shop9:10 The new thinking on Key Performance Indicators.

The difference between the four types of performancemeasures

The characteristics of a winning KPI—two storiesThe 10/80/10 rule for performance measuresThe importance of knowing your organization’s critical

success factorsA case study on success factors

10:00 Presentation on success factors10:20 Commence Workshop #1: Revisiting your organization’s

success factors (SFs). All work that has been already donein this area will be tabled to attendees (e.g., from a reviewof the past few years’ strategic plans)

10:40 Morning break

Note: template continues for the remaining two days at this level of detail

76

EXHIBIT 11.9 Example of Critical Success Factor Relationship-Mapping Exercise

77

# Success Factor Count 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 etc etc 40

1 Positive public perception of ________________________ 5 X X X X X

2 Be seen in the community as an employer of ‘first choice’ 1 X

3 Minimizing pollution and waste 3 X X X

4 Encouraging voluntary assistance by staff to the local community 2 X X

5 Supporting local businesses 3 X X X

6 Delivery in full on time, all the time to our key customers 5 X X X X X

7 Finding better ways to do the things we do everyday 4 X X X X

8 Maintaining a safe and healthy workplace 3 X X X

9 _______________________________ 2 X X

10 _______________________________ 10 X X X X X X X X X X

11 _______________________________________________ 3 X X X

12 ___________________________________ 8 X X X X X X X X

etc _______________________________ 3 X X X

etc _______________________________ 1 X

etc ______________________________ 0

40 ____________________________ 4 X X X XCount (# of relationships between success factors) 8 3 0 0 1 1 1 3 3 3 2 1 3 7 5 3 0 4 3 0 3 1 2 0

Success Factor #

This ‘x’ represents an arrow from successfactor #1 “Positive pubic perception of XXX”to “Be seen in the community as an employerof ‘first choice’”.

This ‘x’ represents an arrow from successfactor #9 “Enhancing operational/communication efficiency, e.g. reducing costper transaction” to “Increasing linkages withkey suppliers”.

This shows the total amount of relationshipsformed between success factors. The highernumber, the greater the likelihood of being aCritical Success Factor

EXHIBIT 11.10 A Spreadsheet Matrix of Success Factor Relationships

78

EXHIBIT11.11

Sum

mar

izin

gth

eTe

ams’

Top

Five

Succ

ess

Fact

ors

fro

mth

eM

app

ing

Pro

cess

Tea

m1

Tea

m2

Tea

m3

Tea

m4

Tea

m5

Tea

m6

Num

ber

of

Tim

esSel

ecte

d

Beseen

intheco

mmunity

asan

employerof“first

choice”

=5

=4

13

Deliveryin

fullontim

e,allthetim

eto

ourke

ycu

stomers

1=3

11

1=2

6

Findingbetterwaysto

dothethings

wedoeveryd

ay=5

1Recruittherigh

tpeo

ple

allthetim

e2

42

Willingn

essto

aban

donactiv

ities,processes,an

dinitiatives

that

arenotworkingorareunlik

elyto

succee

d

5=4

2

Wefinishwhat

westart

42

=4

23

=2

6Use

only

relia

ble,thorough

lytested

tech

nology

that

serves

ourpeo

ple

andprocesses

=3

22

“Stay,

say,

strive

enga

gemen

twith

staff”

23

35

4Increasedrepeatbusinessfrom

keycu

stomers

34

2Grow

lead

erswhothorough

lyunderstan

dthework,

livethephilo

sophy,

andteachitto

others

51

79

EXHIBIT11.12

How

Do

Yo

ur

Top

Five

toE

igh

tO

per

atio

nal

CSF

sC

ove

rth

eSi

xB

alan

ced

-Sco

reca

rdP

ersp

ecti

ves?

Per

spec

tive

s

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tica

lsu

cces

sfa

ctor

Fin

anci

alC

ust

om

ersa

tisf

acti

on

Sta

ffsa

tisf

acti

on

Innova

tion

&le

arnin

gIn

tern

alpro

cess

Envi

ronm

ent

&co

mm

unit

y

e.g.,tim

elyarrivalan

ddep

arture

ofplanes

✓✓

✓✓

✓possible

–––––––

✓✓

✓–––––––

✓–––––––

✓✓

–––––––

✓✓

–––––––

✓✓

✓

80

EXHIBIT11.13

Test

ing

Th

atY

ou

rTo

pFi

veto

Eig

ht

Op

erat

ion

alC

SFs

Lin

kto

Yo

ur

Stra

tegi

cO

bje

ctiv

es

Str

ateg

icO

bje

ctiv

es(S

O)

Cri

tica

lsu

cces

sfa

ctor

SO

#1

SO

#2

SO

#3

SO

#4

SO

#5

SO

#6

e.g.,tim

elyarrivalan

ddep

arture

ofplanes

✓✓

possible

1.––––––––––

✓✓

✓2.

––––––––––

✓3.

–––––––––––

✓4.

–––––––––––

✓✓

✓5.

–––––––––––

✓✓

6.–––––––––––

✓7.

–––––––––––

✓✓

✓

81

We finish whatwe start, ontime and on

budgetOptimize

revenue fromprofitablecustomers

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxx(CSF)

xxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxx

Seamless servicewithin xxxxxxproducts and

services

Introduction ofnew products andservices that add

value to ourcustomer (CSF)

Our customersbeing active

advocates for ourbusiness

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxx

xxxxxxxxxxx

xxxxxxxxxxxxxx

Increasingproductivity

through increase inskills, motivation,

etc.

Execution infull, on time,all the time

EXHIBIT 11.14 Showing How the Critical Success Factors Affect Other Success Factors

82

EXHIBIT 11.15 Communicating Critical Success Factors to Staff ExampleSource: Energy Efficiency and Conservation Authority 2009/2010 Plan.

83

EXHIBIT 12.1 Common Reasons Why Organizations Get Their Measures Radically Wrong

“SMART” is notthe answer

To be under the misconception that as long as a measureis SMART—specific, measureable, attainable, realistic,and time sensitive—it will do. This, of course, ignoresthe fact that the measure may not be linked to thecritical success factors of the business and that its darkside may be very damaging.

Cascading doesnot work

The cascading down of performance measures, whereone measure is broken down into its component partsas it goes down different teams (e.g., you start withreturn on capital employed and then say whatmeasures made this up, and so on down).

Training isessential

Giving teams the task of finding measures without anytraining and placing them in the organization’sbalanced scorecard application.

Top downdoes notwork

Giving the task to a few accountants orperformance-management specialists who completethis task in the spare moments they have.

Tying KPIs topay will fail

Tying KPIs to performance-related pay. If you do this,KPI stands for key political indicator, rather than keyperformance indicator. As mentioned earlier, goodperformance with KPIs should be seen as a “ticket tothe game,” a given, the reason why you are employed;thus, there is no need to incentivize them.

84

EXHIBIT 12.2 Summary of What Needs to Be Done in Order to Arrive at

Measures That Will Work

Task Description

Locate successfactors

Determine what your success factors are. This has beencovered in Chapter 11 (Stage 4).

Ascertain CSFs Map the relationships to find which success factors havethe most significant impact—the critical successfactors. This has been covered in Chapter 11 (Stage 4).

Train a small KPIteam

Train a small team in how to derive measures led by thechief measurement officer. This has been covered inChapter 9 (Stage 2).

Selling the KPIsystem to allemployees

This important step is covered in Chapter 10 Stage 3.

Teams designappropriatemeasures

Teams review the critical success factors and designappropriate measures for their team.

Teams recordperformancemeasures in adatabase

Record all measures collected from the workshopsessions in a database, indicating the key features,such as description of measure, suggested measurename, the critical success factor the measureinfluences, and measurement frequency.

Sort the measures Sort the wheat from the chaff by having an experiencedKPI team member review every measure.

Determinemeasure nameand how it ismeasured

Finalize the appropriate names for all the measures thatwill be used and clearly think through how themeasures will be utilized.

Find the KRIs Ascertain the KRIs that we will need to report to theBoard.

Ascertain the teamperformancemeasures

Teams ascertain measures from relevant CSFs.

Find the KPIs Ascertain the winning KPIs and commence testing ofthem.

Measures Gallery Hold a “Measures Gallery” as suggested by Stacey Barr,a

which is an open session where staff are invited toshare their views on the measures which have beendisplayed on the walls of the room.

aStacey Barr’s Practical Performance Measurement Using the PuMP Blueprint for Fast,Easy and Engaging Performance Measures, 2014.

85

Level 1

Level 2

Divisional

PM <20

Departmental

PM <20

Team PM <20

Thrid*

All KPls reported to SMT

Some KPls

reported to SMT

Som

e KPls

repo

rted

to S

MT

KP

ls r

eport

ed

Only

rele

vant

Level 3 Thrid*

Level 4 First*

<20 Organizational

wide RIs and

PIs and

<10 KPIs <10

Organization-

wide KPIsSecond*

* = order of process

PM= Performance measures

EXHIBIT 12.3 Interrelated Levels of Performance Measures in an Organization

86

EXHIBIT 12.4 Taking a Past Measure and Restating as a Current and Future

Measure

Past measures(last week / fortnight /

month / quarter)

Current measures(24/7 and daily)

Future measures(next day / week / month /

quarter)number of late planes

last week/ lastmonth

planes over 2 hourslate (updatedcontinuously)

number of initiatives to becommenced in the nextmonth, months two andthree to target areaswhich are causing lateplanes

Date of last visit bykey customer

Cancellation of orderby key customer(today)

Date of next visit to keycustomer

Sales last month innew products

Quality defects foundtoday in newproducts

Number of improvementsto new products to beimplemented in nextmonth, months two andthree

87

EXHIBIT 12.5 Process to ascertain Measures from a Critical Success Factor

I ask what aspects or areas should be measured in this critical success factor.The aspects are only trigger points and often include duplication. Allsuggestions for aspects should be treated as good ideas. There is noediting or disputing an idea. Often, the most unusual idea can give birth toa major discovery.

I always aim for at least five aspects. Look for key words in the CSF wording.

We start ascertaining the likely measures. Which include:◾ # of recognitions given last week by department◾ # of CEO recognitions planned for next week/next fortnight◾ # of incidents or near misses (immediate reporting)

(continued)

88


The next stage is to mark the measures that are:◾ Past measures (# of recognitions given last week by department)◾ Current measures (# of incidents or near misses)◾ Future measures (# of planned celebrations in next week / next fortnight)

89

Perso

n resp

onsible

BSC

per

spec

tives

Suggeste

d targ

et

Team

xx

Team

xx

Team

xx

Team

xx

Team

xx

Number ofinitiativesimplemented

from thequarterly rollingkey customersurvey

PI John Doe CF Past

All initiativesimplemented

within 3 monthsof survey

✓ ✓ ✓

Late planes,more than twohours late

KPI Susan JohnF, CF,E&CIP, SS, I&L

Current 24 by 7 <3 per week Timely arrival and

departure of planes ✓ ✓ ✓ ✓ ✓

Number ofinitiatives to beimplemented to get planes on time

RI Basil John CF,IP,F,E&C Future Weekly >3 per month

per teamTimely arrival and

departure of planes ✓ ✓ ✓

xxxxxxxxxxxxxxxxxxxxxxxx PI xxxxxxx xxxx xxxx xx xx xxx ✓ ✓

F = Financial Results CF = Customer Focus, E&C = Environment & Community, IP = Internal Process, SS = Staff Satisfaction, I&L = Innovation & Learning

Weekly aftersurvey (stop

after 10 weeks)

Retain keycustomers,Increase repeatbusiness from keycustomers

Nam

e of

Per

form

ance

mea

sure

Typ

e of m

easu

re

(KRI,R

I, PI,

KPI)

Time

Zone (P

ast,

Curr

ent,

Future

)

Frequen

cy o

f

mea

sure

men

t (24

by

7, d

aily

, wee

kly,

m

onthly

)

Orig

in o

f mea

sure

(Nam

e of c

ritic

al

succ

ess

fact

or /

succ

ess

fact

or)

EXHIBIT 12.6 Performance Measure Database Layout Example

90

EXHIBIT 12.7 A Measures Gallery Used to Gather Feedback on

Measures

91

Scorecard on the weeklyKPIs

24/7 or 9 a.m. report onup to five KPIs (e.g.,number of planes overtwo hours late)

Scorecards formanagementand teams

Monthly dashboard of up to 10 KRIs,(such as customer satisfaction, takeup of new services, innovation, stateof finances, etc.)

Monthly team and business unitscorecards with relevant PIs and RIs

Dashboard forthe Board ofDirectors

Monthly organizational scorecardson the major PIs and RIs

Weekly reporting onsome PIs and RIs

Monthly report to the organization'sstaff (icons not numbers)

Weekly reporting

Monthly reporting

24/7 or 9 a.m. reporting

Frequency of reporting

EXHIBIT 13.1 A Suggested Reporting Framework

92

EXHIBIT 13.2 Developing the Reporting Frameworks at All Levels Checklist

1. Has the KPI team been given the delegated author-ity to finalize the reporting framework?

◽ Yes ◽ No

2. Have you based reporting around a decision-based process (e.g., avoiding the trap of large, lateinformation memorandums that do not help thedecision-making process)?

◽ Yes ◽ No

3. Have you accessed some better-practice reportingtemplates?

◽ Yes ◽ No

4. Have you developed separate reporting for theboard (based around key result indicators)?

◽ Yes ◽ No

5. Have you developed a team BSC template thatteams can complete easily using existing companysystems?

◽ Yes ◽ No

6. Have you developed an organizational scorecard forthe SMT?

◽ Yes ◽ No

7. Have you developed an organizational scorecard forstaff?

◽ Yes ◽ No

8. Have you developed 24/7 and daily reporting ofKPIs on the intranet?

◽ Yes ◽ No

9. Have you developed weekly reporting of KPIs onthe intranet?

◽ Yes ◽ No

10. Is there a moratorium on changing reports andgraphs for at least six months?

◽ Yes ◽ No

11. Have you established company graph standards thatcomply with better practice?

◽ Yes ◽ No

12. Have you marketed and supplied electronic tem-plates of these graphical standards to all teams?

◽ Yes ◽ No

13. Are there notice boards where staff can see thesemeasures in hard copy?

◽ Yes ◽ No

14. Can the relevant stakeholders access the KPIs thatare relevant to them (e.g., the union should beadvised if “delivery in full, on time” is becomingan issue)? (FS)

◽ Yes ◽ No

FS = step that links to a foundation stone.

93

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94

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96

Top Five KPIsWeekly Report xx xxxx 20xx

Top Five Weekly KPIs Target Result Rating

Xxxxxxx xxxxx xxxxx (see graph below)


Xxxxxxx xxxxxxx xxxxxxx.


Xxxxxxx xxxxxxx xxxxxxx..

Issues:

Actions to be taken:

Issues:


Issues:


Note: This report would be superseded when a reporting application is available.

xxxxxxxxxxxxxxxxxxxxxxxxx

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xxxxxxxxxxxxxxxxxxxxxxx

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xxxxxx yyyyyy

EXHIBIT 14.3 Weekly KPI ReportSource:David Parmenter, Key Performance Indicators: Developing, Implementing, and Using Winning KPIs,2nd ed. Copyright © 2010 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

97

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xxx

98

EXHIBIT 14.5(a) Examples of a Monthly Report to ManagementSource: Used with the permission of Inside Info, www.insideinfo.com.au.

99

http://www.insideinfo.com.au




EXHIBIT 14.5(b) Examples of a Monthly Report to ManagementSource: Used with the permission of Stephen Few, www.perceptualedge.com.

100

http://www.perceptualedge.com



EXHIBIT 14.6 Combination of “Sparklines” and “Bullet” GraphsSource: Used with the permission of Stephen Few, www.perceptualedge.com.

101


Progress Report for July xxxx

Our Mission To provide our customers energy at the right price at the right time

Our Vision for next five years To be the preferred energy provider in the xxx

Our Strategies 1. Acquiring profitable customers

2. Increase cost efficiencies

3. Innovation through our people

4. Using best business practices

Our progress against our critical success factors

Delivery in full on time to key

customers

We are a learning organization Innovation is a daily activity

On time deliveries to key clientsGoods rejected due to quality defects

Staff training this monthStaff with mentors

Ideas adopted last monthPaperless transactions with key suppliers/customers

We are warriors against waste We grow leaders We are respected in the

communities we work in

Wastage reduction programs started in monthWaste reduced from existing programs

Leaders appointed from within last monthManagers in leadership programs

Community participation by employees in monthNew initiatives planned for community, next three months

We finish what we start Attracting new profitable

customers

Increase in repeat business from

key customers

Number of late projectsNumber of project finishes in month

New customer ordersFeedback from new customers

Order book from key customersNumber of product developments in progress

Points to note:

xxxxxxxxxxxx xxxx xxxx xxxxx xxxxxxx xxxxxx xxxxxx xxxxx xx x x xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxx xxxx xxxxx xxxx xxxx xxxx xxxxx xxxxxxx xxxxxx xxxxxx xxxxx xx x x xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxx xxxx

EXHIBIT 14.7 Example of a Monthly Report to StaffSource: David Parmenter, Winning CFOs: Implementing and Applying Better Practices. Copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

102

Financial Performance for the __ months ended ____________

All figures are $'000

Actual Budget Variance1 Variance %

Actual to annual budget

%2

RevenueCrown 55,000 60,000 (5,000) ‒8% 35%Other 42,000 41,000 1,000 2% 39%Total Revenue 97,000 101,000 (4,000) ‒4% 37%

ExpensesPersonnel 50,000 53,000 3,000 6% 40%Operating 41,000 42,000 1,000 2% 32%Restructuring - - - 0% 0%Depreciation 5,000 5,300 300 6% 40%Total 96,000 100,300 4,300 4% 36%

Surplus / (Deficit) 1,000 700 300 43% 7%

1. Positive numbers represent under expenditure2. xx.xx% of the year has been completed.

Statement of Financial Position

As at XXX 20XX $000

As at last

month $000

Movement $000

Movement %

Shareholders' Funds 25,500 25,000 500 2.0%

Represented by:

Bank and Cash 6,000 9,500 (3,500) (36.8%) Debtors and Receivables 5,000 5,500 (500) (9.1%) Total Current Assets 11,000 15,000 (4,000) (26.7%)

Plant, property and equipment 16,000 18,000 (2,000) (11.1%) Intangible assets 23,000 18,000 5,000 27.8% Total Long Term Assets 39,000 36,000 3,000 8.3% Total Assets 50,000 51,000 (1,000) (2.0%)

Creditors and payables 9,000 9,000 - - Unearned income 5,000 6,500 (1,500) (23.1%) Employee entitlements 6,500 6,500 - - Total Current Liabilities 20,500 22,000 (1,500) (6.8%)

Non Current Liabilities 4,000 4,000 Total Liabilities 24,500 26,000 (1,500) (5.8%) Net Assets 25,500 25,000 500 2.0%

1. Working capital ratio: __________

• The expected shortfall at year-end is largely a result of the • The electrical consumer division decline is of concern. A special strategy Debtors have benefited from the work done to reduce outstanding debt.

electrical consumer division and the yyyyyy division. meeting is being held on xx June to investigate new revenue avenues to help The amount which is overdue more than 30 days is now $5.0m down from $5.5m

• Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx weather this storm. • XxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxXxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx• Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx • XxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxXxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

An extract from David Parmenter's white paper "Decision Based Reporting – producing reports that make a difference" visit www.davidparmenter.comThis template is available to you from my website. The password is on the slides deck.

Areas of Concern Areas to Note Areas to Note

0%

20%

40%

60%

80%

Mar

xx

Jun

xx

Sep

xx

Dec

xx

Mar

xx

Staff satisfaction

Div 1 Div 2 Div 3

0

50

100

150

200

250

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Apr

xx

May

xx

Jun

xx

Jul x

x

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Steady increase in the provision of housing

additional bedrooms loans underwritten

grants allocated for housing Low deposit rural loans

0%

20%

40%

60%

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Apr

xx

May

xx

Jun

xx

Jul x

x

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Operating expenses (excl depn and interest) torevenue ratio

Actual Target

0

50

100

150

200

0

5

10

15

20

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xxF

eb x

xM

ar x

xA

pr x

xM

ay x

xJu

n xx

Jul x

xA

ug x

xS

ep x

xO

ct x

xN

ov x

xD

ec x

xJa

n xx

Feb

xx

Mar

xx

Alarming increase in accidents

Tenants staff Rolling 12 months

0

10,000

20,000

30,000

40,000

Oct

xx

Nov

xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Apr

xx

May

xx

Jun

xx

Jul x

x

Aug

xx

Sep

xx

NPBT falling just short of budget

YTD Actual Budget YTD Forecast Last year

0

1,000

2,000

3,000

Nov

xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Apr

xx

May

xx

Jun

xx

Jul x

x

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Rent collected vs rent in arrears

Rents collected rent arrears

0%

4%

8%

12%

16%

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xxF

eb x

xM

ar x

xA

pr x

xM

ay x

xJu

n xx

Jul x

xA

ug x

xS

ep x

xO

ct x

xN

ov x

xD

ec x

xJa

n xx

Feb

xx

Mar

xx

Return on capital employed

Actual Target

0

40

80

120

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xxF

eb x

xM

ar x

xA

pr x

xM

ay x

xJu

n xx

Jul x

xA

ug x

xS

ep x

xO

ct x

xN

ov x

xD

ec x

xJa

n xx

Feb

xx

Mar

xx

Good increase in new housing stock

0-2 bedrooms 3 bedrooms 4+ bedrooms

0

400

800

1,200

1,600

Aug

xx

Sep

xx

Oct

xx

Nov

xx

Dec

xx

Jan

xxF

eb x

xM

ar x

xA

pr x

xM

ay x

xJu

n xx

Jul x

xA

ug x

xS

ep x

xO

ct x

xN

ov x

xD

ec x

xJa

n xx

Feb

xx

Mar

xx

Waiting lists rising

Auckland Rest of country

Board Dashboard March 20xx

EXHIBIT 14.8 Board Dashboard on a Large (A3/U.S. Fanfold) Page

103




EXHIBIT 14.9 Key Result Indicators for a BoardSource: David Parmenter, Winning CFOs: Implementing and Applying Better Practices. Copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

Staff satisfaction:No different or less importantthan customers’ satisfaction.As one person said, “Happystaff make happy customers,which makes happyshareholders.” If you believein this connection, run asurvey now! A staff satisfactionsurvey need not cost the earthand should never be donecovering all staff; instead itshould be replaced by arolling survey. See my articleon “How to seek staff opinionand not blow your budget”www.davidparmenter.com.

0%

20%

40%

60%

80%

Mar

xx

Jun x

x

Sep x

x

Dec x

x

Mar

xx

Division 3 staff satisfaction a concern

Div 1 Div 2 Div 3

Expenses to revenue as aratio:The Board should beinterested in how effective theorganization has been inutilizing technology andcontinuous improvement toensure cost of operations istracking well against revenue.

0%

15%

30%

45%

60%

Aug x

x

Sep x

x

Oct xx

Nov x

x

Dec x

x

Jan x

x

Feb x

x

Mar

xx

Apr

xx

May x

x

Jun x

x

Jul xx

Aug x

x

Sep x

x

Expense to revenue ratio in line withexpectations

Actual Target

Customer satisfaction:This needs to be measured atworst every three months byusing statistical samples andfocusing on your top 10 to20 percent of customers (theones that are generating mostif not all of your bottom line).This process does not need tobe overly expensive. If youthink once a year is adequatefor customer satisfaction, stickto running a sports club asyou are not safe in the publicor private sectors.

0%

20%

40%

60%

80%

100%

Sep x

x

Dec x

x

Mar

xx

Jun x

x

Sep x

x

Key customers’ satisfaction

Customers group A Customers group B

Customers group C

104



Value of new business:All businesses in the privatesector need to focus on thegrowth of their rising stars.It is important to monitor thepickup of this new business,especially among the top 10 to20 percent of customers.

0

2

4

6

8

Aug x

x

Sep x

x

Oct xx

Nov x

x

Dec x

x

Jan x

x

Feb x

x

Mar

xx

Apr

xx

May x

x

Jun x

x

Jul xx

Aug x

x

Sep x

x

Value of new business taking off

New product 1 New product 2New product 3

Net profit before tax(NPBT):Since the board will alwayshave a focus on the year-end,it is worthwhile showing thecumulative NPBT. This graphwill include the most recentforecast which should beupdated on a quarterly basis.Access my article “Throwaway your budget” www.davidparmenter.com.

0

10,000

20,000

30,000

40,000

Apr

xx

May x

x

Jun x

x

Jul xx

Aug x

x

Sep x

x

Oct xx

Nov x

x

Dec x

x

Jan x

x

Feb x

x

Mar

xx

NPBT forecasted to be below plan

YTD Actual BudgetYTD Forecast Last year

Health and safety:All boards are interested in thisarea as the well-being of staffis a much higher prioritythese days.

0

50

100

150

200

0

5

10

15

20

Aug x

x

Sep x

x

Oct xx

Nov x

x

Dec x

x

Jan x

x

Feb x

x

Mar

xx

Apr

xx

May x

x

Jun x

x

Jul xx

Aug x

x

Sep x

x

Reported accidents dropping

Div1 Div2 Rolling 12 months

105

Return on capital employed:The old stalwart of reporting.The difference now that it is nolonger a KPI, but a KRI.

0%

4%

8%

12%

16%

Aug x

x

Sep x

x

Oct xx

Nov x

x

Dec x

x

Jan x

x

Feb x

x

Mar

xx

Apr

xx

May x

x

Jun x

x

Jul xx

Aug x

x

Sep x

x

Oct xx

Nov x

x

Dec x

x

Jan x

x

Feb x

x

Mar

xx

Return on capital employed recovering

Actual Target


Cashflow:This would be projected out at least six months forward.

‒40

‒30

‒20

‒10

0

10

20

Au

g x

x

Sep

xx

Oct

xx

No

v xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Ap

r xx

May

xx

Jun

xx

Jul x

x

Au

g x

x

Sep

xx

Oct

xx

No

v xx

Dec

xx

Jan

xx

Feb

xx

Mar

xx

Cashflow impacted by heavy reinvestment

Operating Investing Financing

Capacity:This monitors the capacity ofkey equipment and facilities.It would go forward at least6 to 12 months. The boardneeds to be aware of capacitylimitations, and such a graphwill help focus the board onnew capital expenditurerequirements.

0%

20%

40%

60%

80%

100%

Jan x

x

Mar

xx

May x

x

Jul xx

Sep x

x

Nov x

x

Jan x

x

Mar

xx

Utilization of capacity on target

Mainframe Internet xxxxx

106



Operational efficiency:This measure looks at theoperational efficiency of keyunits (e.g., key plant andequipment).

0%

20%

40%

60%

80%

100%

Apr

xx

May x

x

Jun x

x

Jul xx

Aug x

x

Sep x

x

Oct xx

Nov x

x

Dec x

x

Jan x

x

Feb x

x

Mar

xx

Aug x

x

Sep x

x

Operational efficiency below expectations

Actual Target

107

EXHIBIT 14.10 Example of a Weekly Team-Progress UpdateSource: David Parmenter, Winning CFOs: Implementing and Applying Better Practices. Copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

Weekly Progress Update During May

Week 1 Week 2 Target (month)

Proactive visits to in-house clients 0 1 6Number of staff recognitions made 0 0 6Projects in progress 7 7 <8Reports/documents still in draft mode 12 15 <5Initiatives underway based on

satisfaction survey0 0 5 by 30 June

108

http://www.qrf.davidparmenter.com/articles

Information System's ScorecardCustomer Focus

Help desk This month TargetProgram visits to managers 4 6

Service requests outstanding (faults, works

requests) at month end24 15

Service requests closed in month 45 55

% calls fixed by Help Desk from 1st call 55% 65%

Initiatives underway based on satisfaction

survey

0 5 by 30

June

Services outages Vs SLA's This month TargetAverage Mainframe Response Time 1 sec

Outage time per month / # of times None <1hr/mth

ISSP This cycle Target

Program visits to managers 4 12

Presentations of ISSP to managers 2 6

Disaster recovery This month Target Training needs outstanding Next 3 months Last 12 monthsBackup every night 100% 100% Chief information officer 0 2

Months since last back-up tested at remote 3 <4 Team xxxx 0 5

Rolling checks on C drives 25 40 Team xxxx 0 2

Our ability to deliver This month Target Team xxxx 0 1

% of jobs completed on time on budget 44% 60% Team xxxx 0 1

% of time of developers spent on high priority /

high value work55% 65% Average for all IT staff <0.1 2.5

Staff trained to use ______________ system 45 150 Coaching sessions This month Last quarter

CompletionsThis month

TargetNumber of staff who have had one-on-one

coaching sessions0 4

Projects in progress 7 <8 Innovations implemented This month TargetReports/documents still in draft mode 15 <5 Number of staff innovations implemented 10 23

Environment and CommunityThis month Target

Presentations given to third party organizations1 in last 12

months>3 in year

Number of Finance staff involved in community

activities10 >15

IS Team SatisfactionThis month target

No. of formal staff recognitions made in the

month 1 >2

Staff functions planned to occur in next three

months0 >2

Projects status

Internal Process Innovation & Learning

Financial Results - Progress Against Plan

0

100

200

300

400

500

Ju

l xx

Aug x

x

Sep x

x

Oct

xx

No

v x

x

De

c x

x

Ja

n x

x

Fe

b x

x

Ma

r xx

Ap

r xx

Ma

y x

x

Ju

n x

x

Annual plan Forecast cumulative

Actual cumulative Last year

Findings:

xxxxxxxxxx xxxx xxxxxxxxxxx xxxxxxxxxx xxxxx xxxxxxxxxxxxx xxxxxxx xxxxxxxxx xxxxxx xxxxx xxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxx xxxxxxx xxxxxxxxxx xxxx xxxxxxxxxxx xxxxxxxxxx xxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxx xxxxx xxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxx xxxxxxx xxxxxxxxxx xxxx xxxxxxxxxxx xxxxxxxxxx xxxxx xxxxxxxxxxxxx xxxxxxx xxxxxxxxx xxxxxx xxxxx xxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxx xxxxxxx

Action to be taken:xxxxxxxxxx xxxx xxxxxxxxxxx xxxxxxxxxx xxxxx xxxxxxxxxxxxx xxxxxxx xxxxxxxxx xxxxxx xxxxx xxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxx xxxxxxx xxxxxxxxxx xxxx xxxxxxxxxxx xxxxxxxxxx xxxxx xxxxxxxxxxxxx xxxxxxx xxxxxxxxx xxxxxx xxxxx xxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxx xxxxxxx xxxxxxxxxx xxxx xxxxxxxxxxx xxxxxxxxxx xxxxx xxxxxxxxxxxxx xxxxxxx xxxxxxxxx xxxxxx xxxxx xxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxx xxxxxxx

0% 25% 50% 75% 100%

xxxx

xxxx

xxxx

xxxx

xxxx

xxxx

xxxx

Percentage complete

Risk of non-completion Behind On-track Done

EXHIBIT 14.11 Example of an IS Monthly Team Balanced Scorecard Source: David Parmenter, Winning CFOs: Implementing and Applying Better Practices. Copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

109

Our mission

Our vision for next five years

What we have to do well every day - our Critical Success Factors (CSFs) Our performance measures in the CSFs Actual Target

On time deliveries to key customers (KC) 98% 99%

Goods rejected by KC due to quality defects 3% 4%

Wastage reduction programs started in month 0 2

Waste reduced from existing programs 9% 10%

Number of late projects 5 15

Number of project finishes in month by due date 9 10

Staff training hours this month 150 220

Staff with mentors 35 80

Leaders appointed from within last month 4 2

Managers in leadership programs 9 10

Orders from new customers 3 10

Positive feedback from new customers 3 2

Ideas adopted last month 9 20

Ideas for implementation within 3 months 20 50

Community participation by employees in month 30 20

New initiatives planned for community, next 3 months 3 2

Order book from key customers $320,000 $400,000

Number of product developments in progress 3 2

Innovation is a daily activity

We are respected in the communities we work in

Increase in repeat business from key customers (KC)

Delivery in full on time to key customers (KC)

We are warriors against waste

We finish what we start

We are a learning organisation

We grow leaders

Attracting new profitable customers

Progress Report to Staff - For our Operations Throughout September 20

To provide energy at the right price at the right time

To be the preferred energy provider in the xxx

Our Strategies (what we are doing to achieve our vision)

1. Acquiring profitable customers2. Increase cost efficiencies3. Innovation through our people4. Using best business practices

Late planes over 2 hoursTime:

Statistics of last stop Contact details No. of late planes over 1 hour

Flight number

How late

Expected arrival time

arrived late

left latetime

added

region manager

name

Current time at

locationwork mobile Home

last 30 days

30 day ave. of last 3

months


months

BA1243 02:15 21:45 01:45 02:15 00:30 Pat 18:45 xxxxx xxxxx xxxx 5 4 4

BA1244 02:15 21:45 01:45 02:15 00:30 xxxxxxx 19:45 xxxxx xxxxx xxxx 6 4 4






Total 7 planes



Flight number

How late


arrived late

left latetime

added

region manager

name

Current time at


last 30 days


months


months








Total 7 planes



Flight number

How late


arrived late

left latetime

added

region manager

name

Current time at


last 30 days


months


months








Total 7 planes

Dashboard for Board - March 2007

Top 10% of customers satisfaction

0%

10%

20%

30%

40%

50%

60%

70%

80%

Mar

-06

Jun-

06

Sep

-06

Dec

-06

Mar

-07

Customers group ACustomers group BC C

Staff satisfaction

0%

10%

20%

30%

40%

50%

60%

70%

80%

Mar

-06

Jun-

06

Sep

-06

Dec

-06

Mar

-07

Div 1 Div 2 Div 3

Value of new business $ms

0

1

2

3

4

5

6

7

8

Feb

-06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-

06

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

New product 1 New product 2New product 3

Expense to Revenue ratio

0%

10%

20%

30%

40%

50%

60%

Feb

-06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-

06

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

Actual Target

Reported accidents

0

5

10

15

20

Feb

-06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-

06

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

0

10

20

30

40

50

60

70

80

90

100

Div1 Div2 Rolling 12 months

Xxxxxxxx Xxxxxxxx xxxxxxx xxxxxx x

xxxxxxxx x xxxxxxxxxxxx xxxxxxxxx

xxxxxxxxxxx xxxxxxxx x

xxxxxxxxxxxxxxxxxxxx x x xxxxxxxxx x

x xxxxxxxxxxx xx xxxxxxxxx x xxxxxx xx

xxxxxxxxx

Xxxxxxxx Xxxxxxxx xxxxxxx xxxxxx x

xxxxxxxx x xxxxxxxxxxxx xxxxxxxxx

xxxxxxxxxxx xxxxxxxx x

xxxxxxxxxxxxxxxxxxxx x x xxxxxxxxx x

x xxxxxxxxxxx xx xxxxxxxxx x xxxxxx xx

xxxxxxxxx

Xxxxxxxx Xxxxxxxx xxxxxxx xxxxxx x xxxxxxxx

x xxxxxxxxxxxx xxxxxxxxx xxxxxxxxxxx

xxxxxxxx x xxxxxxxxxxxxxxxxxxxx x x

xxxxxxxxx x x xxxxxxxxxxx xx xxxxxxxxx

x xxxxxx xx

NPBT Year to date

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Apr

-06

May

-06

Jun-

06

Jul-

06

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

YTD Actual Budget YTD Forecast

MIS Team's Scorecard

Customer focus Projects StatusHelp desk Current TargetProgramme visits to managers 4 6




% Fixed by Help Desk from 1st call 70% 65%


surveyNone by 30/6/02

Services outages (>5 people & >1hour)

Current Target

Average Mainframe Response Time 1 sec <0.75 sec

Outage time per month / # of times

Systems union accounting system None <1hr/mth

Student management system 30mins / 2 <1hr/mth

Servers (file and print) None <1hr/mth

Servers (website) None <1hr/mth

ISSP This cycle TargetProgramme visits to managers 4 12 Learning & GrowthPresentations of ISSP to managers 2 6 Internal capability Current Target

Total training days this month 5 8 / month

Delivery In-house training courses for IS staff 0 2 per year

Disaster recovery Current Target Customer satisfaction survey 1 2 per year

Backup every night 100% 100% Initiatives underway based on satisfaction survey 2 4

Months since last back-up tested at remote

site3 <4 Post project reviews performed Current Target

Rolling checks on C drives 25 40 Reviews completed 0 4

Developing Intellectual Capital Current TargetOur ability to deliver Current Target Succession plans (IT management) 2 5

% of time of developers spent on high

priority / high value work55% 65% Staff who have had 2 performance reviews in the last year

25 34

Number of staff using EIS 15 50 Staff with development plans being implemented 5 10

Number of staff who have been trained in

EIS45 150 % spent of this year's technology capital expenditure (YTD) 8% 10%

FinancialCompletions Current TargetProjects in progress 12 <8

Reports/documents still in draft mode 15 <5

Progress on major IS capex projects

Project value $k

Status

Peoplesoft system 80

PC replacement programme 65

Research management system 45

Disk storage upgrade 30

IS Function Expenditure Profile

0

100

200

300

400

500

De

c-0

0

Ma

r-01

Ju

n-0

1

Se

p-0

1

De

c-0

1

Planned Cumulative Forecast Cumulative Actual Cumulative

Findings:

Action to be taken:

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

Project 12

Project 11

Project 10

Project 9

Project 8

Project 7

Project 6

Project 5

Project 4

Project 3

Project 2

Project 1

Percentage completeDone On-Track Behind Risk of Non-Completion










Current Target


















25 34







Project value $k

Status






0

100

200

300

400

500

De

c-0

0

Ma

r-01

Ju

n-0

1

Se

p-0

1

De

c-0

1


Findings:

Action to be taken:

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

Project 12

Project 11

Project 10

Project 9

Project 8

Project 7

Project 6

Project 5

Project 4

Project 3

Project 2

Project 1


Top five KPIsWeekly report xx xxxx 20xx

Top 5 indicators Target Result Rating



Xxxxxxx xxxxxxx xxxxxxx.


Xxxxxxx xxxxxxx xxxxxxx..

0

100

200

300

400

500

600

700

800

900

1000

Oct-99

Nov-9

9

Dec-9

9

Jan-

00

Feb-0

0

Mar

-00

Apr-00

May

-00

Jun-

00

Jul-0

0

Aug-0

0

Sep-0

0

No

. of x

xx

12 Month Rolling Total Target

Issues:


0%

20%

40%

60%

80%

100%

120%

Oct

-99

Nov

-99

Dec

-99

Jan-

00

Feb

-00

Mar

-00

Apr

-00

May

-00

Jun-

00

Jul-0

0

Aug

-00

Sep

-00

Rat

e (%

)

12 Month Rolling Total Target Month Actual

Issues:


0%

2%

4%

6%

8%

10%

12%

Oc

t-9

9

No

v-9

9

De

c-9

9

Ja

n-0

0

Fe

b-0

0

Ma

r-0

0

Ap

r-0

0

Ma

y-0

0

Ju

n-0

0

Ju

l-0

0

Au

g-0

0

Se

p-0

0

98 Actual 97 Actual

98 Budget Hurdle Rate

Issues:


Daily / Weekly Reports(KPIs, RIs and PIs)

Monthly Summary ofOperations

24/7 and dailyprogress with KPIs

Team Scorecards










Current Target


















25 34







Project value $k

Status






0

100

200

300

400

500

De

c-0

0

Ma

r-01

Ju

n-0

1

Se

p-0

1

De

c-0

1


Findings:

Action to be taken:

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

Project 12

Project 11

Project 10

Project 9

Project 8

Project 7

Project 6

Project 5

Project 4

Project 3

Project 2

Project 1


Weekly Team ReportWeekly progress update

Week-2 Week-1 Target (mth)1 Proactive visits to managers 0 1 6

2 No. of staff recognitions made 0 0 6

3 Projects in progress 7 7 <8

4 Reports/documents still in draft mode 12 15 <5

5 Initiatives underway based on satisfaction

survey0 0 5 by 30/6/xx

Weekly progressof RIs and PIs

BoardDashboard

Monthlyprogress

SeniorManagementTeam

StaffWeeklyprogress

EXHIBIT 14.12 Performance Reporting PortfolioSource: David Parmenter, Winning CFOs: Implementing and Applying Better Practices, copyright © 2011 byDavid Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

110

EXHIBIT 14.13 An IPhone DashboardSource: Used with the permission of Stephen Few, www.perceptualedge.com

111


Prework 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Post

1 Senior management team commitment

2 Establishing a "winning KPI" project team3 Establishing a "just do it" culture and process

4 Setting up a holistic KPI development strategy

5 Marketing KPI system to all employees

6 Identifying operational critical success factors

7 Recording of performance measures in a database

8 Selecting team performance measures

9 Selecting organizational winning KPIs

10 Developing the reporting frameworks at all levels

11 Facilitating the use of "winning KPIs"

12 Refining KPIs to maintain their relevance

Project weeks

EXHIBIT 15.1 Twelve-Step Implementation 16-Week Timeline (From

First Two Editions of This Book)

112

Stage Steps Prework 1 2 3 4 5 6 7 to 11 12 to 16 Post

1 1,4Getting the CEO and senior management

committed to the change

2 2,3Up-skill in-house resources to manage the KPI

project


4 6Finding your organization's operational critical

success factors

5 7,8,9Determining measures that will work in your

organization


Project weeks

EXHIBIT 15.2 Twelve Steps Merged into a Six-Stage Process

113

EXHIBIT 15.3 The Seven Foundation Stones in the Winning KPI

Methodology

114

Increasedrecognition

Increase repeatbusiness

Retentionof key staff

EXHIBIT 15.4 Relationship Mapping to Find the CSFs

115

SMT

Business unitcoordinators

KPI teamcoordinators

Teams buildingtheir own

performancemeasures

Interestedstakeholders

External facilitatorsKPI project team

(up to four members)

CEO

EXHIBIT 15.5 KPI Team Reporting Directly to the CEO

116

EXHIBIT 16.1 The Success Factor Broken into Headings

Category Heading Success Factor

On Time Delivery in full on time, all the time of our projectsto our customers (internal and external)

Products __________ as a brand with new and innovativeproduct/services of a global standard that addvalue to our customers

Delivering design, innovation, and quality thatmatters

Projects Get the right project team for the jobGet the right contractor for the jobReducing supply chain costsBeing a preferred supplier for key customers and

business associatesDevelopment Explore opportunities to increase the size and

quality of our land bankObtaining timely approvals from relevant authorities

for development of new projectsMarketing Increased business from new and repeat customers

Identify and capture the potential of new andemerging markets

Getting the right product in the right place at theright time

Other headings included: Customer Satisfaction, ExternalCommunications, Employee Work Environment, Leadership/Growth, Internal Communications, Employee Retention,Environment, Community, Revenue, Management and Finance

117

EXHIBIT 16.2 Some of the Measures Ascertained by the Design Team During the Workshop

Name ofMeasure

Frequencyof Measure

Critical SuccessFactor Target

Selectionprocess—# ofpotential recruitswithrecommendationsfrom staff

Monthly Delivering Design,Innovation andQuality thatMatters

>4 perquarter

Number of staff whohave more thanthree projectsallocated to them

Weekly Delivering Design,Innovation andQuality thatMatters

Less than 2

Interference fromClient—# ofchanges/amendments toClient’s brief

Monthly Delivering Design,Innovation andQuality thatMatters

<4 perproject

Contracting the rightteam/staff—# of manhours required inthe next monthfrom keyconsultants

Monthly,before themonthstarts

Delivering Design,Innovation andQuality thatMatters

<150 hoursper month(show bykeyconsultant)

Quality—# ofbreaches not yetrectified


2 or less atany time

(continued)

Research—# ofvisits to otherdevelopments/trade shows

Quarterly Delivering Design,Innovation andQuality thatMatters

Date of nexttrade showvisit

Research—# ofsales peopleconsulted onproject

Weeklywherenecessary

Delivering Design,Innovation andQuality thatMatters

<2 perproject

118


Name ofMeasure

Frequencyof Measure

Critical SuccessFactor Target

Focus grouprecommendation—# ofrecommendationsstill outstanding



Post ContractDefects—# ofdefectscomplaintsunfixed on majorprojects

Daily Delivering Design,Innovation andQuality thatMatters


119

EXHIBIT 16.3 Poster and Water Bottle Used to Promote the CSFs

120

# Success Factor Count 1 2 3 4 5 6 7 8 9 10 11 12

1 Positive public perception of ______________ 2 X X

2 Be seen in the community as an employer of first choice 1 X

3 Minimizing pollution and waste 2 X X

4 Encouraging voluntary assistance by staff to the local community 2 X X

5 Supporting local businesses (% of purchases to have local content) 1 X

6 Delivery in full on time, all the time to our key customers 2 X X

7 Finding better ways to do the things we do every day 4 X X X X

8 Maintaining a safe and healthy workplace 2 X X

9 ________________________________ 2 X X

10 ________________________________ 2 X X

11 ________________________________ 2 X X

12 ________________________________ 4 X X X X

Success Factor #

EXHIBIT 16.4 Mapping of Relationships Using the Excel Matrix

121

Team A indicate, by anarrow, the influence successfactors in this section wouldhave on all the successfactors on the sheet

Team C indicate, by anarrow, the influence successfactors in this section wouldhave on all the successfactorson the sheet

Team B indicate, by anarrow, the influence successfactors in this section wouldhave on all the successfactors on the sheet

EXHIBIT 16.5 Mapping the Relationships

122

Balance Scorecard Perspectives Performance MeasureMS Satisfaction of members and visitors KRI = financial or nonfinancial, measured monthly

SS Satisfaction of paid and voluntary staff PI = nonfinancial, measured weekly, biweekly, monthly, quarterly

FR Finance Results RI = financial or nonfinancial, measured weekly, monthly, quarterly

IP Internal Process KPI = nonfinancial—measured daily, weekly, significant impact

IL Innovation and learning

EC Environment and community

Name of performance measure Person BSC

perspectives

Time

zone

(Past,

Current,

Future)

Frequency of

measurement

(24 by 7, daily,

weekly,

monthly)

Linkage to CSFs

(CSFs used in

brainstorming

exercise)

KD TC ___ ___ ___ ___

Number of press releases in pipeline to

promote _______________ connectionPI KD EC FR Monthly

Capture the

potential of the

_____________

connection

Number of initiatives planned to capitalize

on _______________ connection in next

one to three months and four to six months

PI TC EC FR Monthly

Capture the

potential of the

___________

connection

Date of opening of the first six-hole

competition at ____________RI TC MS, EC IP Monthly

Develop the course

to support speed

golf "six-hole short

courses"

Number of initiatives planned to capitalize

on six-hole speed golf in next

one to three months and four to six months

RI __ MS, EC , IL FR

Develop the course

to support speed

golf "six-hole short

courses"

Number of family friendly initiatives planned

in next three monthsPI __

MS, EC , IL,

SSFR Monthly Family friendly Club

Number of family friendly events held in

past three monthsRI __ MS, EC, IP Monthly Family friendly Club

_____________________________ _____ __ __, __ __ ______

Details about performance measure Person who will monitor measure

Type of

PM

(KRI, PI,

RI, KPI)

EXHIBIT 16.6 Recording the Performance Measures Using a SpreadsheetNote: It is important to record the measures showing which critical success factors they relate to, the frequency of measurement (daily, weekly, monthly), and the relevant balancedscorecard perspective(s) the measure impacts.

123

EXHIBIT 16.7 Surf Life Saving Project’s Lack of Adherence to the

Foundation Stones

Recommended Foundation Stones Action

1. Partnership with the staff, unions,third parties

The lack of buying in by theCEO meant this foundationstone was never in place.

2. Transfer of power to the front line Never occurred.3. Measure and report only what

mattersNever occurred.

4. Source KPIs from the criticalsuccess factors

Only attendees to the workshopwere made aware of this, sothis foundation stone was notembedded.

5. Abandon processes that do notdeliver

There were many activities thatcould have been culled thatwould have freed up time forthis project.

6. Appointment of a home-grownchief measurement officer

Never occurred.

7. Organization-wide understandingof the winning KPIs definition

Never occurred.

124

EXHIBIT 16.8 How the Four Balanced-Scorecard Perspectives Evolved

Original Agreed-To Perspectives Perspectives Used Later On

Customer Stakeholders/customersFinancial Resource managementInternal process Operational excellenceEmployee satisfactionInnovation and learning Learning and developmentEnvironment/community

125

EXHIBIT 16.9 Recording the Adherence to the Foundation Stones

Recommended Foundation Stones Action

1. Partnership with the staff,unions, third parties

While the organization has verygood communication channels,it had not invited anycommunity leaders it workedwith to the workshop.

2. Transfer of power to the frontline

This delegated authority hadalready been established.

3. Measure and report only whatmatters

There was a tendency to re-port everything. The lesson thatless is better than more was notpracticed.

4. Source KPIs from the criticalsuccess factors

Never occurred.

5. Abandon processes that do notdeliver

There were many activities thatcould have been culled thatwould have freed up time forthis project.

6. Appointment of a home-grownchief measurement officer

Never occurred.

7. Organization-wideunderstanding of the winningKPIs definition

Never occurred.

126

EXHIBIT17.1

Som

eC

om

mo

nC

SFs

and

Th

eir

KR

Is,

RIs

,P

Is,

and

KP

Is

Com

mon

CSF

KR

IR

IP

IPoss

ible

KP

I

Stay,say,

strive

enga

gemen

twith

staff.

Staffsatisfaction

(ifmonito

redat

least

threeto

fourtim

esa

year).

Turnoverofex

perienced

staffwhohavebee

nwith

theorgan

ization

formore

than

three

years(rep

orted

monthly).

Number

ofstaff

innovatio

ns

implemen

ted,byteam

(rep

orted

wee

kly).

Staffwhohavebee

nill

forovertw

oweeks

whodonothavea

back-to-w

ork

program

(rep

orted

wee

klyto

man

ager

andge

neral

man

ager).

1.Staffwhohavehan

ded

intheirnotic

etoday.

Staffin

keypositio

ns

would

benotifi

eddirectly

tothech

ief

executiv

eofficer

(CEO),other

staff

would

bereported

totherelevantge

neral

man

ager

orsenior

man

ager.(TheCEO

has

theopportunity

totryto

persuad

ethe

staffmem

ber

tostay.)

2.Number

ofinitiatives

implemen

tedafterthe

staff-satisfactionsurvey

(monito

redwee

kly

aftersurvey

forupto

threemonths).

127

3.Te

amsnotrepresented

inthein-house

courses

tobeheldin

thenex

ttw

owee

ks(rep

orted

daily

toCEO).

4.Acciden

tsan

dbreaches

ofsafety

(rep

orted

toCEO

immed

iately).

5.New

staffwhohave

notattended

aninductionprogram

with

intw

owee

ksof

joining(rep

orted

wee

klyto

CEO).

6.Number

ofCEO

reco

gnitionsin

past

wee

k/pasttw

owee

ks.

7.Number

ofCEO

reco

gnitionsplanned

fornex

tweek/nex

ttw

owee

ks.

(con

tin

ued

)

128

EXHIBIT17.1

(Con

tin

ued

)

Com

mon

CSF

KR

IR

IP

IPoss

ible

KP

I

Recruitingtherigh

tpeo

ple

allthe

time.

Number

ofstaffwho

haveleftwith

in3months,6months,

and12

monthsof

joiningorgan

ization,

bydivision(rep

orted

quarterly).

Number

ofman

agers

trained

inrecruiting

practices

(rep

orted

monthly).

1.Recruitm

entsin

progresswhen

last

interview

was

over

twowee

ksag

o.

2.Dateofco

nfirm

edtestingofcandidates’

capab

ilitie

s(rep

orted

wee

kly).

1.Key

positio

njoboffers

that

areover48

hours

old

andhavenotyet

beenacceptedbythe

chosencandidate

(rep

orted

daily

toCEO/gen

eral

man

ager).

2.List

ofshort-listed

candidates

when

nex

troundofinterviewshas

yetto

beorgan

ized

(rep

orted

daily).

Grow

lead

erswho

thorough

lyunderstan

dthe

work,liv

ethe

philo

sophy,

and

teachitto

others.

Number

ofke

ypositio

nswith

atleasttw

oprotégé

s,bydivision(rep

orted

quarterly).

Number

ofhigh-

perform

ingstaff,by

division(rep

orted

monthly).

Number

ofpromotio

ns

forhigh-perform

ing

staffplanned

inthe

nex

tthreemonths

(rep

orted

monthly).

1.Number

ofplanned

reco

gnitionsin

nex

tweek/nex

ttw

oweeks

(maintained

wee

kly

byeach

man

ager).

2.Number

ofplanned

celebratio

nsin

nex

tweek/nex

ttw

oweeks

(maintained

wee

kly

byeach

man

ager).

1.Number

ofCEO

reco

gnitionsin

past

wee

k/pasttw

owee

ks.

2.Number

ofCEO

reco

gnitionsplanned

fornex

tweek/nex

ttw

owee

ks.

129

3.List

ofhigh-

perform

ingstaffwho

havebee

nin

same

positio

nforovertw

oyears(quarterlylist).

4.Dateofnex

tex

ecutiv

eco

urseto

beattended

bysenior

man

agem

entteam

mem

bers(m

onthly

update).

Grow

lead

erswho

thorough

lyunderstan

dthe

work,liv

ethe

philo

sophy,

and

teachitto

others.

Number

ofman

agers

whohaveattended

lead

ership

training

(quarterlyby

man

ager

level).

Number

ofman

agers

whoarescoringover

____

___ontheir

lead

ership

from

the

360feed

backsurveys

(byman

ager

level).

1.Dateofnex

tlead

ership

program

andthelistof

sugg

estedattendee

sbydivision(rep

orted

wee

klyto

CEO).

2.Dateofnex

t360

feed

backs

forlevel-1

andlevel-2man

agers

(rep

orted

monthly).

Number

ofvacant

lead

ership

placeson

in-house

course

(rep

orted

daily

toCEO

inthelast

threewee

ksbefore

theco

urse’s

sched

uleddate).

(con

tin

ued

)

130

EXHIBIT17.1

(Con

tin

ued

)

Com

mon

CSF

KR

IR

IP

IPoss

ible

KP

I

Staffsatisfactionwith

empowermen

tan

dfulfillm

ent(assumes

asurvey

isthreeto

four

times

ayear).

Dateofnex

tsurvey

(rep

orted

monthly).

Number

ofinitiatives

implemen

tedafterthe

staff-satisfactionsurvey

(monito

redwee

kly

aftersurvey

forupto

threemonths).

1.Pe

rcen

tage

oflevel-1

andlevel-2man

agers

whohavemen

tors

(rep

orted

quarterly).

2.Pe

rcen

tage

of

high-perform

ingstaff

whohaveamen

tor

(rep

orted

quarterly).

1.Number

of

high-perform

ingstaff

whodonothavea

men

tor(rep

orted

wee

klyto

general

man

agers).

2.Listoflevel-3

man

agerswhodonot

havemen

tors

(rep

orted

wee

klyto

general

man

agers).

Note:Thesemeasures

would

only

nee

dto

be

operational

forashort

timeonawee

klybasis.

Listoflevel-1an

dlevel-2

man

agerswhodonot

havemen

tors,reported

wee

klyto

theCEO.

Thismeasure

would

only

nee

dto

be

operational

forashort

timeonawee

klybasis.

131

Innovatio

nisadaily

activ

ity(finding

betterwaysto

do

thethings

wedo

everyday).

Innovatio

ns

implemen

tedover

past18

monthsby

division.

1.Innovatio

nsthat

are

runningbeh

ind

(wee

klyupdate).

2.Number

ofpaten

ts.

3.Dateofprototype

completio

n.

4.Dateofnex

tpilo

ttest.

1.Number

ofinnovatio

ns

implemen

tedlast

month

byteam

(rep

orted

monthly

totheCEO).

2.Dateofnex

tinnovatio

ntraining

sessions(m

onthly).

3.Number

ofman

agers

whohavebeen

through

theinnovatio

nco

urse(m

onthly).

4.Dateofnex

tinnovatio

nto

ourke

yservices

(monthly).

Number

ofinnovatio

ns

planned

for

implemen

tatio

nin

the

nex

t30

days,60

days,

and90

days(rep

orted

wee

klyto

CEO).

Aban

donmen

t:Willingn

essto

aban

doninitiatives,

opportunities

that

arenotworkingor

unlik

elyto

succee

d.

Number

of

aban

donmen

tsover

past18

monthsby

division(rep

orted

monthly).

Tim

esavedeach

month

through

aban

donmen

tsby

team

(rep

orted

monthly

featuring

thetop-quartile

perform

ingteam

sin

thisarea).

1.List

ofab

andonmen

tsin

lastmonth

byteam

(rep

orted

monthly).

2.Number

of

committee

s/task

forces

disban

ded

thismonth.

3.Number

ofmonthly

reportsterm

inated

.4.

Dateofplanned

replacemen

tofservice

that

has

now

become

outdated

(monthly).

Number

ofab

andonmen

tsto

beactio

ned

inthe

nex

t30

days,60

days,

and90

days(rep

orted

wee

klyto

CEO).

(con

tin

ued

)

132

EXHIBIT17.1

(Con

tin

ued

)

Com

mon

CSF

KR

IR

IP

IPoss

ible

KP

I

Mak

ingtherigh

tdecisionsby

consensuswith

read

yco

ntin

gency

plans.

Majorim

plemen

-tatio

nsin

past18

monthsshowing

deg

reeofsuccess

(exceeded

expectatio

ns,met

expectatio

ns,did

not

mee

tex

pectatio

ns,

aban

doned

).

Majorprojectsaw

aitin

gco

nsensussign

-off

(rep

orted

wee

klyto

CEO).

1.Man

agerswith

the

mostsuccesswith

implemen

tatio

nsover

pastthreeyears

(rep

orted

quarterlyto

CEO).

1.Majorprojectsaw

aitin

gdecisionsthat

arenow

runningbeh

indsched

ule

(rep

orted

wee

klyto

CEO).

2.Majorprojectsin

progress

with

outco

ntin

gency

plans(rep

orted

wee

kly

toCEO).

Deliveryin

fullon

time,

allthetim

e,to

ourke

ycu

stomers.

Percen

tage

ofon-tim

ein-fulldeliveryto

key

customers,an

dto

other

customers.

(Show

past18

months.)

Percen

tage

ofon-tim

ein-fulldeliveryto

other

customers

(rep

orted

wee

klyto

general

man

agers).

1.Te

amswith

thebest

on-tim

edelivery

reco

rd(rep

orted

wee

klyto

general

man

agersan

dall

staff).

2.Callsonhold

longe

rthan

_______

seco

nds(rep

orted

immed

iately).

1.Emerge

ncy

response

time

overagivenduratio

n(rep

orted

immed

iately

toCEO).

2.Late

deliveries/

inco

mplete

deliveriesto

keycu

stomers(rep

orted

24/7

toCEO,ge

neral

man

ager,an

dallstaff).

3.Complaintsfrom

ourke

ycu

stomersthat

havenot

bee

nresolved

with

intw

ohours

(rep

orted

24/7

toCEO

andge

neral

man

agers).

133

.Gettin

gcloserto

our

customers.

18-m

onth

tren

dshowingtake

-upof

new

services.

Dateofnex

toutside-in

activ

ityto

enhan

cesenior-man

agem

ent-

team

understan

ding

ofcu

stomer

nee

ds

(e.g.,CEO

working

underco

verin

customer

interface

frontlinepositio

ns).

1.Number

ofinitiatives

implemen

tedto

improve

keycu

stomer

satisfaction(rep

orted

monthly).

2.List

ofke

ycu

stomers

wheretim

esince

last

order

is>

Xweeks

(rep

orted

wee

klyto

salesteam

andge

neral

man

agers).

3.Dateofnex

tmajor

customer

focu

sgroup

(rep

orted

quarterly).

4.Dateofnex

tinitiative

toattracttargeted

noncu

stomers

(rep

orted

quarterly).

1.Dateofnex

tvisitto

majorcu

stomersby

customer

nam

e(rep

orted

wee

klyto

CEO

and

general

man

agers).

2.Late

deliveries/

inco

mplete

deliveriesto

ourke

ycu

stomers

(rep

orted

24/7

toCEO,

general

man

ager,an

dall

staff).

3.Key

customer

complaints

notresolved

with

intw

ohours

(rep

orted

toCEO

immed

iately).

Wefinishwhat

we

start.

Statusofallmajor

projectsreported

monthly.

Number

ofprojects

finished

inthe

month.

1.Number

ofoverdue

reports/docu

men

ts(rep

orted

wee

klyto

seniorman

agem

ent

team

).

1.Listoflate

projects,by

man

ager

(rep

orted

wee

klyto

senior

man

agem

entteam

).

(con

tin

ued

)

134

EXHIBIT17.1

(Con

tin

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135

Built in-house

Knowing one's CSFs

KPIs have 7 characteristics

Minimize the dark side

EXHIBIT 18.1 Four Supports to Assist the Balanced Scorecard

136

EXHIBIT 18.2 Differences Between the Balanced-Scorecard and

Winning-KPIs Methodologies

Winning-KPIsMethodology

Balanced-ScorecardMethodology

Emphasizes the importance ofimplementing strategy in abalanced way. Total agreementwith Kaplan and Norton.

Emphasizes the importance ofimplementing strategy in abalanced way.

Strategy mapping is seen as anintellectual process withquestionable value. This isreplaced with relationshipmapping of success factors withmultiple relationships.

Based around strategy mappingwhere success factors neatly fitinto an individualbalanced-scorecard perspective.

Knowing one’s critical successfactors is seen as fundamental toknowing what to measure.

Critical success factors not addressedin their work.

Performance measures arebrainstormed from the criticalsuccess factors.

Performance measures arebrainstormed from strategicinitiatives.

Six balanced-scorecard perspectivesthrough the addition of “staffsatisfaction” and “environmentand community” perspectives.

Four balanced-scorecardperspectives.

KPIs have seven characteristics andare thus rare. Other measures areeither result indicators, key resultindicators, or performanceindicators.

Key performance indicators notdefined. All measures are calledKPIs and therefore seen asimportant to the organization.

Less than 10 KPIs in a business. Many KPIs in a business.Measures seen as either looking at

the past, the here and now, orthe future.

Performance measures are eitherlead or lag KPIs.

A philosophy that says it can beimplemented by an in-houseteam.

An approach that is largelyconsultant-based, requiring muchintellectual rigor.

137


Winning-KPIsMethodology

Balanced-ScorecardMethodology

No software applications required.At some stage a reporting toolwill be needed to monitor andreport on measures.

A myriad of balanced-scorecardapplications that support thestrategy mapping and cascadingperformance measures leading tohundreds of performance measureswithout any linkage to theorganization’s critical successfactors.

The KPI book is a tool-kit forimplementation, containingchecklists, agendas forworkshops, a framework for adatabase, report formats, andguidance notes on all 12 steps.

The balanced-scorecard books arelargely an academic-based approachwith few implementation-basedtools provided. There is an implicitsuggestion that you will require aconsultant to implement themeasures.

138

Chapter 5 Internal ProcessPerspective

A must-read for all the KPI teammembers.

Chapter 6 Learning and GrowthPerspective


Chapter 7 LinkingBalanced-Scorecard Measuresto Your Strategy

This work, I believe, has undone manyscorecard implementations. Form yourown view.

Chapter 8 Structure and Strategy This work, I believe, has undone manyscorecard implementations. Form yourown view.

Chapter 9 Achieving StrategicAlignment: from Top toBottom

Some useful diagrams. However, twodangerous areas, firstly cascading ofmeasures and secondly the rewardssystems linkage. The linkage to pay inthis chapter has given rise to manyflawed performance-related payschemes.

Chapter 10 Targets, ResourceAllocation, Initiatives, andBudgets

I did not find this chapter of use.

Chapter 11 Feedback andthe Strategic Learning Process


Chapter 12 Implementing aBalanced-ScorecardManagement Program


Appendix Building a BalancedScorecard


A useful chapter. However, it does misslinkage to Hoshin Kanri.

Chapter 1 Measurement andManagement in theInformation Age

Chapter 2 Why Does BusinessNeed a Balanced Scorecard?

A useful chapter. Describes the fourperspectives. I think their white paperis a better introduction as it talks aboutinnovation and learning rather thanlearning and growth. The cause andeffect section is where the winningKPIs methodology parts company.

Chapter 3 Financial Perspective

Chapter 4 Customer Perspective


A must-read for all the KPI teammembers. There are some useful casestudies.

EXHIBIT 18.3 Outline of Robert Kaplan and David Norton’s The Balanced

Scorecard: Translating Strategy into Action

139

EXHIBIT 18.4 Outline of Stacey Barr’s Practical Performance

Measurement: Using the PuMP Blueprint for Fast, Easy, and Engaging

KPIs

Chapter 1 What Exactly IsPerformanceMeasurement?

A very useful chapter that should be re-reada few times by the KPI project team. Thesections on “Events or milestones are notperformance measures” and “Measures ofactivity are (mostly) not performancemeasures” are very important.

Chapter 2 Does YourPerformance MeasurementProcess Work?

A very useful chapter that should be re-reada few times by the KPI project team. Thesection “The common struggles withperformance measurement” is amasterpiece.

Chapter 3 The Eight-WeekPuMP Blueprint PilotProject

Read this after you have read the eight stepsin Chapters 3 to 11 inclusive.

Chapter 4 Step 1:UnderstandingMeasurement’s Purpose

A very useful chapter that should be re-reada few times by the KPI project team. Thesection “The common performancemeasurement habits are bad habits” isexcellent.

Chapter 5 to 11 CoveringSteps 2 to 8

These chapters are a must-read for theKPI team. Along with a visit to StaceyBarr’s website, the team is now in aposition to see which methodology theywant to use.

Chapter 12 Resources forPuMP ImplementationSuccess

An outline of the resources Stacey Barr hasmade available to the KPI project team.

140

EXHIBIT 18.5 Outline of Paul Niven’s Balanced Scorecard Step-by-Step for

Government and Nonprofit Agencies

Chapter 1 Introduction to theBalanced Scorecard

A very useful chapter. The sections on“Strategy execution is everything” are amust-read section.

Chapter 2 Adapting theBalanced Scorecard to Fitthe Public and NonprofitSector

Also a very useful chapter. The section on“Importance of cause and effect” isimportant to understand in order to forma point of view. The section on “Benefitsof using a balanced scorecard” will helpwith your sale process.

Chapter 3 Before You Begin The information in this chapter would bevery valuable for the KPI project team.

Chapter 5 Mission, Values,and Vision

Simply the best summary written anywhereof this aspect of the balanced scorecard.Encourage everybody on the seniormanagement team to read this chapter.

Chapter 6 Strategy: The Coreof Every BalancedScorecard

I would read Jack Welch’s chapter onstrategy in Winninga first before digestingthis version.

Chapter 7 Strategy Maps I have expressed my views in Chapters 2and 11. Determine which approach youwant to adopt and then implement.

Chapter 8 PerformanceMeasures, Targets, andInitiatives

This is where I digress from Niven’s work.Understand the contrast between myChapter 1 on KPIs and Niven’s Chapter 8and draw your own conclusions.

Chapter 9 Creating Alignmentby Cascading the BalancedScorecard

I think cascading measures down in theclassical balanced-scorecard method, asexplained here, will not move you towardachieving your optimal goal. I wouldprefer you to follow the method in thisbook.

Chapter 10 Linking ResourceAllocation to the BalancedScorecard

Resource allocation and budgeting is bestsourced from Robin Fraser and JeremyHope’s Beyond Budgeting.b

141


Chapter 11 Reporting Results A very useful analysis of the softwareselection process. It should be read inconjunction with Stephen Few’s bookswhich are covered in more detail later inthis section.

Chapter 12 The City ofCharlotte: A BalancedScorecard Success Story

This is useful for the project KPI projectteam.

Chapter 13 SustainingBalanced Scorecard Success

There is a useful case study in this chapter.

aJack Welch and Suzy Welch, Winning (New York: HarperBusiness, 2005).bJeremy Hope and Robin Fraser, Beyond Budgeting: How Managers Can Break Freefrom the Annual Performance Trap (Cambridge, MA: Harvard Business Press, 2003).

142

APPENDIX AFoundation Stones of

Performance-Related PaySchemes

Performance-related pay is broken both within the private sectorand in government and nonprofit agencies. Jeremy Hope1 in this

quote:

“…But despite hundreds of research studies over 50 years thattell us that extrinsic motivation (carrot and stick financial targetsand incentives) doesn’t work, most leaders remain convinced thatfinancial incentives are the key to better performance.”

The Billion-Dollar Giveaway

Performance bonuses give away billions of dollars each year basedon methodologies where little thought has been applied. Who are theperformance bonus experts? What qualifications do they possess towork in this important area other than prior experience in creating themayhem we currently have?

When one looks at their skill base one wonders how did theyacquire gravitas in the first place? Which bright spark advised the hedgefunds to pay a $1 billion bonus to one fund manager who created

This appendix is adapted from David Parmenter, The Leading-Edge Manager’s Guide toSuccess: Strategies and Better Practices (Hoboken, NJ: John Wiley & Sons, 2011).

143

Appendix A

a paper gain that never eventuated into cash? These schemes wereflawed from the start; “super” profits were being paid out, there wasno allowance made for the cost of capital, and the bonus scheme wasonly “high side” focused.

The Foundation Stones

There are a number of foundation stones that need to be laid down andnever undermined when building a performance-related pay schemethat makes sense and will move the organization in the right direction.

The Foundation Stones include:

◾ Base the performance-related pay schemes on a relative measure◾ Super profits should be excluded from schemes◾ Schemes should be free from “profit enhancing” adjustments◾ Schemes should take into account the full cost of capital◾ At-risk portion of salary separate from the scheme◾ Avoid any linkage to the share price◾ Team based rather than on an individual◾ The bonus should not be seen as an annual entitlement◾ Linked to a balanced performance◾ The downside of having “deferral provisions”◾ Test scheme to minimize risk of being manipulated◾ Schemes should not be linked to KPIs◾ Schemes need to be communicated◾ Schemes should be tested on past results

Base the Performance-Related Pay Schemes on a Relative Measure

Most bonuses fail at this first hurdle. Jeremy Hope and Robin Fraser,2

pioneers of the beyond budgeting methodology, have pointed out thetrap of an annual fixed performance contract. If you set a target in thefuture, you will never know if it was appropriate, given the particularconditions of that time. You often end up paying incentives to man-agement when, in fact, their performance was substandard. A goodexample of this would be in the private sector if rising sales did notkeep up with the market growth rate.

144

Relative performance targets measures involve comparing perfor-mance to the marketplace. Thus, the financial institutions that aremaking super profits out of this artificial lower interest rate environ-ment would have a higher benchmark set retrospectively, when theactual impact is known. As Jeremy Hope says, “Not setting a targetbeforehand is not a problem as long as staff are given regular updatesas to how they are progressing against the market.” He argues thatif you do not know how hard you have to work to get a maximumbonus, you will work as hard as you can.

Super Profits Should Be Excluded from Schemes

Super profits should be excluded from performance-related payschemes and retained to cover possible losses in the future. Inboom times, annual performance targets give away too much. These“super-profit” years come around infrequently and are needed tofinance the dark times of a recession. Yet, what do our remunerationexperts advise? A package that includes a substantial slice of thesesuper-profits, but no sharing in any downside. This downside, ofcourse, is borne solely by the shareholder.

There needs to be recognition that the boom times have little or nocorrelation to the impact of the teams. The organization was alwaysgoing to achieve this, no matter who was working for the firm. AsExhibit A.1 shows, if an organization is to survive, super-profits need

0

Annual Profits Bonus Ceiling

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

200

‒200

‒400

‒600

‒800

400

600$ms

EXHIBIT A.1 Retention of Super-ProfitsSource: David Parmenter, The Leading-Edge Manager’s Guide to Success: Strategies and Better Practices.Copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

Appendix A

145

Appendix A

to be retained. If you look at Toyota’s great years, the percentage paidto the executives was a fraction of that paid to the executives in Detroitwho had underperformed.

This removal of super-profits has a number of benefits:

◾ It avoids the need to have a deferral scheme for all unrealizedgains

◾ It is defensible and understandable to employees◾ It can be calculated by reference to the market conditions relevantin the year. When the market has become substantially larger, withall the main players reporting a great year, we can attribute acertain amount of period-end performance as super-profits

When designing a bonus scheme, the super-profits componentshould be removed from the calculation rather than used to createa windfall gain to all those in the bonus scheme. If a bonus poolhas maxed out, then staff would rather play golf than go hard to winfurther business. The ceiling in Exhibit A.1 is shown for illustrationpurposes only.

Schemes Should Be Free from “Profit-Enhancing” Adjustments

All profits included in a performance bonus scheme calculationshould be free of all major “profit-enhancing” accounting adjustments.Many banks generated additional-profits in 2010–2013 as the massivewrite-downs from the Global Financial Crisis were written back whenloans were recovered.

I remember a classic case in New Zealand where a CEO wasrewarded solely on a successful sale of a publicly owned bank.The loan book was written down to such an extent that the pur-chasing bank reported a profit in the first year that equated tonearly the full purchase price. Most of the written down loans hadbeen repaid in full.

This activity is no different from many other white collar crimesthat occur under the eyes of poorly performing directors.

146

One simple step you can take is to eliminate all short-term account-ing adjustments from the bonus scheme profit pool of senior manage-ment and the CEO. These eliminations should include:

◾ Recovery of written-off debt◾ Profit on sale of assets

The aim is to avoid the situation where management, in a bad year,will take a massive hit to their loan book so they can feather their neston the recovery. This type of activity will be alive and well around theglobe.

These adjustments do not have to be made for the loan team’sbonus calculations. We still want them motivated to turn around non-performing loans.

Schemes Should Take into Account the Full Cost of Capital

The full cost of capital should be taken into account when calculatingany bonus pool. A trader can only trade in the vast sums involvedbecause they have a bank’s balance sheet behind them. If this was notso, then the traders could operate at home and be among the manysolo traders who also play in the market. These individuals cannothope to make as much profit due to the much smaller positions theirpersonal cash resources facilitate.

Each department in a bank should have a cost of capital, whichtakes into account the full risks involved. In today’s unusual environ-ment the cost of capital should be based on a five-year average cost ofdebt and a risk weighting associated with the risks involved. With thelosses that bank shareholders have had to tolerate the cost of capitalshould be set in some “higher risk” departments as high as 25 percent.

With the current artificially low base rate, a fool could run a bankand make a huge bottom line. All banks should thus be adjustingtheir cost of capital based on a five-year average in their performance-related pay schemes.

At-Risk Portion of Salary Separate from the Scheme

Any at-risk portion of salary should be separate from the performance-related pay scheme. The at-risk portion of the salary should be paid

Appendix A

147

Appendix A

EXHIBIT A.2 At-Risk Component of SalarySource: David Parmenter, The Leading-Edge Manager’s Guide to Success: Strategies and Better Practice.,Copyright © 2011 by David Parmenter. Reprinted with permission of John Wiley & Sons, Inc.

RemunerationMgr 1 Mgr 2 Mgr 3

Base salary, paid monthly 48,000 64,000 80,000At-risk salary (bonus is paid separately) 12,000 16,000 20,000Salary package 60,000 80,000 100,000Relative measure, set retrospectively not met met exceededPercentage of at-risk salary paid 40% 100% 100%At-risk salary paid 4,800 16,000 20,000Share of bonus pool nil 5,000 10,000Total period-end payout 4,800 21,000 30,000

when the expected profits figure has been met (see Exhibit A.2). Notethat, as already mentioned, this target will be set as a relative measure,set retrospectively, when actual information is known.

When the relative target has been met or exceeded, the “at-risk”portion of the salary will be paid. The surplus over the relative measurewill then create a bonus pool for a further payment, which will becalculated, taking into account the adjustments already discussed.

Avoid Any Linkage to the Share Price

Performance-related pay schemes should avoid any linkage to shareprice movements. No bonus should be pegged to the stock marketprice as the stock market price does not reflect the contribution staff,management, and the CEO has made.

Only a fool believes that the current share price reflects the longterm value of an organization. Just because a buyer, often ill informed,wants to pay a certain sum for a “packet” of shares does not mean thetotal shareholding is worth that amount.

Providing share options is also giving away too much of share-holder’s wealth in an often disguised way. As strategy guru HenryMintzberg has clearly stated, “Executive bonuses—especially in theform of stock and option grants—represent the most prominent formof legal corruption that has been undermining our large corporations

148

and bringing down the global economy. Get rid of them and we willall be better off for it.”

Jeremy Hope points out in his book Reinventing the CEO,3 theseincentives have been behind many corporate failures. Due to the pres-sure to manipulate the accounts, the share price is too great for theCEO and senior management to resist.

With share options it is so easy to get it wrong, and in fact giveaway more wealth in a period than the actual net profits created. Inother words, you have given away future profits that may never begenerated, and often not by the executives in question.

There is another more damaging issue in that these measures focusexecutives on manipulating the short term at the expense of innovationwhere the costs are often front-loaded and the rewards back-loaded.

Team Based Rather Than on an Individual

Basing accountability and rewards on teams, rather than individuals,has been talked about for years. It is much more closely linked toMcGregor’s4 “Theory Y” view that people are motivated by self-esteemand personal development, rather than by additional incentives (The-ory X). In Theory Y organizations produce better results by encour-aging their people to be creative, to work collaboratively, to improvetheir skills, and to derive satisfaction from their work.

Only a simpleton would believe that you can separate out anindividual’s contribution to the bottom line. As Harvard professor ofbusiness administration Robert Simons5 asks, “How do we measurethe contribution of a single violin player in relation to the successfulseason enjoyed by a symphony orchestra?”

Profit Sharing Plan at Southwest

The profit sharing plan at Southwest started in 1973 and is at theheart of its compensation and benefits program. All employeesqualify on January 1 following the commencement of their employ-ment. Fifteen percent of pretax profits are paid into the profitsharing pool and this is shared across all employees according tobase salary. The payments go into a retirement fund for individual

Appendix A

149

Appendix A

employees. While employees are free to increase that amount,25 percent of the profit sharing fund is used to purchase South-west shares. There are no incentive schemes based on achievingannual fixed targets.6

As Jeremy Hope points out:

The profit-sharing system can only be understood in the context ofits purpose. It is not intended to be an incentive for individuals topursue financial targets; rather, it is intended as a reward for theircollective efforts and competitive success.

The Bonus Should Not Be Seen as an Annual Entitlement

The finance sector has a belief that the bonus is a right and in manycases it has already been spent. We need to move bonuses out of theannual cycle. Southwest does this very cleverly.

Southwest doesn’t make an annual cash payment; instead, they paythe bonus into an employee pension plan. This has the effect ofminimizing any fallout from a poor year. In other words, employ-ees are not planning to spend their bonus on “something special”and then become disappointed when it doesn’t happen. The pen-sion payment approach cushions poor years but also has the effectof relating performance to the share price (both pension schemesown a substantial element of company stock).7

Linked to a Balanced Performance

Performance-related pay schemes should be linked to a “balanced”performance. The balanced scorecard has been used, I would argue,largely unsuccessfully, as a vehicle to pay performance. Schemes usinga balanced scorecard are often flawed on a number of counts:

◾ The balanced scorecard is often based on only four perspec-tives, ignoring the important environment-and-community andstaff-satisfaction perspectives

150

◾ The measures chosen are open to debate and manipulation◾ There is seldom a link to progress in the organization’s criticalsuccess factors

◾ Weighting of measures leads to crazy performance agreementssuch as those shown in Exhibit A.3

An alternative would be to link the scheme to the organization’scritical success factors. See an example of an airline scheme inExhibit A.4.

In this exhibit, all teams have the same weighting for the financialresults. Some readers will feel this is too low. However, when you domore research on the balanced-scorecard philosophy, you will under-stand that the greatest impact to the bottom line, over the medium-and long-term, will be in the organization’s critical success factors.

The operational team at one of the airports has a major focuson timely arrival and departure of planes. You could argue that thisshould have a higher weighting such as 30 percent. However, this teamdoes impact in many other critical success factors. This team clearly

EXHIBIT A.3 Performance-Related Pay System That Will Never WorkSource: International Institute of Management. David Parmenter, The Leading-Edge Manager’s Guide to Suc-cess: Strategies and Better Practices. Copyright © 2011 by David Parmenter. Reprinted with permission ofJohn Wiley & Sons, Inc.

ScorecardPerspective

PerspectiveWeighting

PerformanceMeasure

MeasureWeighting

Financial 60% Economic value added 25%Results Unit’s profitability 20%

Market share growth 15%

Customer 20% Customer satisfaction survey 10%Focus Dealer satisfaction survey 10%

InternalProcess

10% Ranking in external qualitysurvey

5%

Decrease in dealer deliverycycle time

5%


10% Employee suggestionsimplemented

5%

Employee satisfaction survey 5%

Appendix A

151

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152

impacts the timely maintenance of planes by making them availableon time; and impacts the satisfaction of our first class, business class,and gold-cardholder passengers. The public’s perception of the airlineis reflected in the interaction between staff and the public, along withpress releases and the timeliness of planes.

Ensuring that staff members are listened to, are engaged success-fully, and are constantly striving to do things better (Toyota’s Kaizen)is reflected in the weighting of “stay, say, strive” as well as the catch-phrase “encouraging innovation that matters.” There is no weightingfor “accurate timely information that helps decisions” because otherteams such as IT and accounting are more responsible for this, and Iwant to avoid using precise percentages such as 7 percent or 8 percent,which tend to give the impression that a performance pay scheme canbe a science-based instrument.

The public relations team has a major focus of creating positivespin for the public and for the staff. All great leaders focus in thisarea (a superb example is Sir Richard Branson). The weights for thepublic relations team will focus them in the key areas where theycan contribute. By having innovation success stories and recognitioncelebrations, staff will want to focus in this important area of constantimprovement, which has been demonstrated so well at Toyota overthe past couple of decades.

The maintenance and accounting teams’ focus is narrower. Theaccounting team has a higher weighting on “stay, say, strive” and “en-couraging innovation that matters” to help focus their attention in theseimportant areas. This will improve performance and benefit all theother teams they impact through their work.

The Downside of Having “Deferral Provisions”

The treatment of unrealized gains is a sensitive issue. Someperformance-related pay schemes include deferral provisions in anattempt to avoid paying out bonuses on unrealized gains that maynever materialize. The question is whether the cure is worse than theailment. The issue comes back to the impact on human behavior.

Already some financial institutions have adopted a deferralmechanism on unrealized gains to avoid situations like the “$1 billionbonus to one fund manager who created a paper gain that never

Appendix A

153

Appendix A

eventuated into cash.” There are some downsides that need to bemitigated, including:

◾ We do not want all stocks sold and bought back the next dayas a window dressing exercise that dealers/brokers could easilyarrange with each other

◾ The financial sector is driven by individuals who worship the mon-etary unit, rather than any other more benevolent force—this isa fact of life. A deferral system will be very difficult for them toaccept

◾ Staff will worry about their share of the pool when they leave—thelast thing you want is a team leaving so they can cash up theirdeferral pool while it is doing well

◾ Dead wood may wish to hang around for future paydays out oftheir deferred bonus scheme

It is my belief that while some sectors may be able to successfullyestablish deferral provisions, they will be fraught with difficulties inthe financial sector. In some cases, it would be better to focus on theother foundation stones especially the removal of super profits, andtake into account the full cost of capital.

Test Scheme to Minimize Risk of Being Manipulated

All performance-related pay schemes should be tested to minimize therisk of being manipulated by participants in the scheme. All schemesin which money is at stake will be gamed. Staff will find ways tomaximize the payment by undertaking actions that may well be not inthe general interest of the organization.

The testing of the new scheme should include:

◾ Reworking bonuses paid to about five individuals over the last fiveyears to see what would have been paid under the new schemeand compare against actual payments made

◾ Consulting with a cross section of staff and asking them, “Whatactions would you undertake if this scheme was in place?”

◾ Discussing effective best-practices with your peers in other com-panies: this will help move the industry standard while avoidingthe implementation of a scheme that failed elsewhere

154

Schemes Should Not Be Linked to KPIs

Performance-related pay schemes should not be linked to KPIs. KPIsare a special performance tool, and it is imperative that these are notincluded in any performance-related pay discussions. KPIs, as definedin Chapter 6, are too important to be gamed by individuals and teamsto maximize bonuses. Performance with KPIs should be considered a“ticket to the game.”

Although KPIs will show how teams are performing 24/7, daily, orweekly, it is essential to leave the KPIs uncorrupted by performance-related pay. As mentioned in Chapter 2, it is a myth that by tyingKPIs to pay, you will increase performance. You will merely increasethe manipulation of these important measures, undermining them somuch that they will become key political indicators.

Certainly most teams will have some useful monthly summarymeasures, which I call results indicators. These result indicators helpteams track performance and be the basis of any performance-relatedpay scheme.

Schemes Need to Be Communicated

Performance-related pay schemes need to be communicated to staffusing public relations experts. All changes to such a fundamental issueas performance-related pay need to be sold through the emotionaldrivers of the audience. With a performance-related pay scheme, thiswill require different presentations when selling the change to theboard, chief executive officer (CEO), senior management team, andmanagement and staff. They all have different emotional drivers.

As mentioned in Chapter 10, many change initiatives fail at thishurdle because we attempt to change the culture by using logic, writ-ing reports, and issuing commands via e-mail. It does not work. Thenew performance-related pay scheme needs a public relations machinebehind it. In addition you should “road test” the delivery of all of yourpresentations in front of the public relations expert before going live.

Schemes Should Be Tested on Past Results

Performance-related pay schemes should be road tested on the lastcomplete business cycle. When you think you have a good scheme,

Appendix A

155

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156

EXHIBIT A.6 A Checklist to Ensure That You Lay Down These Foundation

Stones CarefullyChecklist Is it covered?1. To be based on a relative measure rather

than a fixed annual performance contractAll fixed in advance, annual targets for bonuses are

removed◽ Yes ◽ No

Relative measures are introduced to take account of:

• Comparison against market share ◽ Yes ◽ No

• Comparison against other peers ◽ Yes ◽ No

• Changes in input costs (e.g., where bank base rate isvery low)

◽ Yes ◽ No

Progress against the relative measures are reportedthree to four times a year

◽ Yes ◽ No

2. Super profits should be excluded fromschemes

Super profit scenarios have been analyzed ◽ Yes ◽ No

Historic trends analyzed to estimate when super profitsare being made

◽ Yes ◽ No

Drivers of super profits identified (e.g., the interestmargin banks had in 2009 meant that even a foolwould have made super profits)

◽ Yes ◽ No

Super profits removed from net profit as a percentageof each $m made rather than have a ceiling

◽ Yes ◽ No

Model tested against past 10 or 20 years retainedprofit/losses to ensure formula is right

◽ Yes ◽ No

3. Schemes should be free from“profit-enhancing” adjustments

Eliminate all short term accounting adjustmentsincluding:

• Recovery of written off debt ◽ Yes ◽ No

• Profit on sale of assets ◽ Yes ◽ No

• Recovery of goodwill ◽ Yes ◽ No

4. Schemes should take into account the fullcost of capital

All departments that have a specific profit sharingscheme should have a “cost of capital,” which takesinto account the full risks involved.

◽ Yes ◽ No

Calculation of cost of capital should be done over a longperiod covering at last one full boom to bust cycle.

◽ Yes ◽ No

(continued)

Appendix A

157

Appendix A

EXHIBIT A.6 (Continued)

Checklist Is it covered?5. At-risk portion of salary separate from

the schemeTest the new system on previous years ◽ Yes ◽ No

Human resources to discuss the change on a one-to-onebasis with all managers affected

◽ Yes ◽ No

Prepare an example of the new scheme and publish ina secure area of the HR team’s intranet section

◽ Yes ◽ No

6. Avoid linkage to the share priceRemove all bonuses that are linked to share prices ◽ Yes ◽ No

Remove all share options from remuneration ◽ Yes ◽ No

7. Team based rather than the individualRemove all individual schemes ◽ Yes ◽ No

Amend all contract templates ◽ Yes ◽ No

8. The bonus should not be seen as an annualentitlement

Link schemes to longer term saving (e.g. SouthwestAirlines)

◽ Yes ◽ No

9. Linked to a balanced performanceRemove all balanced scorecard weightings from

schemes◽ Yes ◽ No

Reward performance in the critical success factors ◽ Yes ◽ No

10. The downside of having deferralprovisions

Test any deferral provisions before implementation ◽ Yes ◽ No

11. Test scheme to minimize risk of beingmanipulated

Rework bonuses paid to about five individuals over thelast five years to see what would have been paidunder the new scheme and compare against actualpayments made.

◽ Yes ◽ No

Consult with some clever staff and ask them, “Whatactions would you undertake if this scheme wasrunning?”

◽ Yes ◽ No

Discuss with your peers in other organizations thebetter practices that work—this will help move theindustry standard at the same time as avoidingimplementing a scheme that failed elsewhere.

◽ Yes ◽ No

158

EXHIBIT A.6 (Continued)

Checklist Is it covered?12. Schemes should not be linked to KPIsRemove all KPIs from performance-related pay ◽ Yes ◽ No

Remove all KPIs from job descriptions ◽ Yes ◽ No

Remove all KPIs from annual performance agreements ◽ Yes ◽ No

13. Schemes Need to Be CommunicatedSold changes via the emotional drivers ◽ Yes ◽ No

Have prepared presentations that are targetedspecifically at:

• The board ◽ Yes ◽ No

• CEO ◽ Yes ◽ No

• Senior management team ◽ Yes ◽ No

• The staff on performance related pay schemes ◽ Yes ◽ No

14. Schemes should be tested on past resultsRoad test the bonus scheme on last complete business

cycle (e.g., between 10 to 20 years)◽ Yes ◽ No

Appendix A

test it on the results of the last full business cycle, the period betweenthe last two recessions. View the extent of the bonus on the net profit.

You need to appraise the scheme with the same care and attentionyou would apply to a major fixed asset investment. See Exhibit A.5 foran example of this test, and Exhibit A.6 for a checklist.

Notes

1. Jeremy Hope, “How KPIs Can Help Motivate and Reward the Right Behav-ior,” IBM white paper, 2010.

2. Jeremy Hope, Reinventing the CFO (Boston: Harvard Business School Press,2006).

3. Jeremy Hope, Reinventing the CFO (Boston: Harvard Business School Press,2006).

4. Douglas McGregor, The Human Side of Enterprise (New York: McGraw-Hill,1960).

5. Robert Simons, “Control in an Age of Empowerment,” Harvard BusinessReview (March–April 1995): 80.

6. Jeremy Hope, “How KPIs Can Help Motivate and Reward the Right Behav-ior,” IBM white paper, 2010.

7. Ibid.

159

APPENDIX BDraft Job Description for the Chief

Measurement Officer

The chief measurement officer is responsible for drivingtwenty-first-century measurement practices within the orga-

nization. The position provides support and coordination on variousprojects and activities related to performance management andmeasurement to support the operational excellence initiatives.

Outline

Performance measurement is worthy of more intellectual rigor in everyorganization on the journey from average to good, and finally to great.The chief measurement officer needs to have high credibility withinthe organization, have advanced interpersonal skills, be experiencedin delivering training, and be good at leading and selling change.

The chief measurement officer would be responsible for:

◾ Testing measures to ensure the dark side of a performance mea-sure is minimized

◾ Vetting and approval of all measures in the organization◾ Leading all balanced scorecard initiatives◾ Promoting the abandonment of measures that do not work◾ Developing and improving the use of performance measures inthe organization

◾ Learning about the latest thinking in performance measurement◾ Being the resident expert on the behavioral implications of per-formance measures

◾ Replacing annual planning by introducing quarterly rollingplanning

160

Appendix B

This position has a status equivalent of the senior IT, accounting,and HR officials. The position reports directly to the CEO befittingthe knowledge and diverse blend of skills required for this position.Only when we have this level of expertise within the organization canwe hope to move away from measurement confusion to measurementclarity.

Duties/Responsibilities of the Chief Measurement Officer

Here is a list of duties/responsibilities, which should be tailoredaccordingly:

1. Testing of measures to ensure the dark side of a performancemeasure is minimized

2. Vetting and approval of all measures in the organization3. Leading all balanced scorecard initiatives4. Promoting the abandonment of measures that do not work5. Developing and improving the use of performance measures in

the organization6. Learning about the latest thinking in performance measurement7. Being the resident expert on the behavioral implications of per-

formance measures8. Preparing and reporting all performance measures (i.e., the moni-

toring tool) and Kaizen results to corporate and local management9. Running a series of in-house workshops to promote the initiatives

mentioned above10. Providing assistance as needed to departments to improve per-

formance and efficiencies11. Following established policies and procedures; determining and

recommending potential enhancements12. Integrating performance management with all management func-

tions13. Overseeing all benchmarking with third parties14. Managing the annual performance evaluation process and cyclical

activities15. Driving corporate operational excellence initiatives (Lean, Total

Quality Management, etc.)16. Performing analysis on key metrics/processes and recommending

Kaizen process improvements that maximize efficiencies

161

17. Creating reports and documenting processes18. Replacing annual planning by introducing quarterly rolling plan-

ning19. Reviewing and updating performance appraisal tools and tech-

nologies20. Ensuring that performance discussions are documented and

implemented accordingly21. Assisting in communicating measurement standards and key per-

formance indicators to all members of the organization22. Monitoring and verifying the integrity of the data to be reported

and reviewed with local management before distributing23. Keeping up-to-date on the latest performance management, train-

ing and development, and career management issues24. Maintaining and updating company competencies at all levels

and ensuring effective utilization of the competencies and desiredbehaviors

25. Engaging in career planning for employees and succession plan-ning for key leadership roles

26. Manage and cultivate relationships with best practice organiza-tions and professional bodies involved in Six Sigma, organiza-tional excellence, Agile, Lean

27. Publicly represent the organization with the media and confer-ences to create external branding around the progress made. Thisis designed to attract like-minded individuals to apply for posi-tions in the organization

Skills and Experience

It is unlikely that the organization will have many staff who can under-take this role. In addition, the role will be very difficult for someonecoming in from outside as they would not have the business under-standing nor the credibility within the organization, which would befundamental for this role. Thus it is important to sell the significanceof this role to the few individuals who have the capability to fulfil therole. These individuals are likely to be in high demand and thus adecision needs to be made as where the KPI project fits among theorganization’s priorities.

Appendix B

162

Appendix B

For organizations over 500 employees there will be enough talentto find someone who:

◾ Has tertiary qualifications and thus is able to absorb new methodsand practices swiftly

◾ Has a success track record in project management◾ Is known for well thought out and interesting presentations◾ Is well respected within the organization—has favors to call on◾ Is analytic and a decisive decision maker with the ability to priori-tize and communicate to staff key objectives and tactics necessaryto achieve organizational goals

◾ Can be freed from their role and sent on a sabbatical to up-skilltheir understanding of their role

◾ Has been able to lead and sell change within the organizationsuccessfully

◾ Has advanced interpersonal skills and an understanding of humanbehavior

◾ Has strong written and verbal communication skills; is a persuasiveand passionate communicator with excellent public speaking skills

◾ Is action-oriented, entrepreneurial, flexible, and has an innovativeapproach to operational management

◾ Has passion, humility, integrity, a positive attitude, is mission-driven, and is self-directed

It is expected that there will be experience gaps and these will beclosed when they go on a study sabbatical visiting progressive organi-zations around the world.

163

APPENDIX CDelivering Bulletproof

Presentations

Delivering “bulletproof” presentations is a skill you need to adoptbefore you can be an effective manager, so it is best to start

learning now. I will assume that you have attended a presentationskills course, which is a prerequisite to bulletproof PowerPoint presen-tations. The speed of delivery, voice levels, using silence, and gettingthe audience to participate are all techniques that you need to befamiliar with and comfortable using.

To assist you I have prepared a list of rules for a bulletproof pre-sentation as shown in Exhibit C.1.

EXHIBIT C.1 Rules for a Bulletproof Presentation

Prepare a paper togo with thepresentation

1. Always prepare a paper for the audience coveringdetailed numbers and so forth so that you do nothave to show detail in the slides (see rule 2).

2. Understand that the PowerPoint slide is not meantto be a document; if you have more than 35words per slide, you are creating a report, not apresentation. Each point should be relativelycryptic and be understood only by those whohave attended your presentation.

Presentationplanning

3. Last-minute slide presentations are acareer-limiting activity. You would not hang yourdirty wash in front of a hundred people, so whywould you want to show your audience sloppyslides? Only say “yes” to a presentation if youhave the time, resources, and enthusiasm to dothe job properly.

(continued)

164

Appendix C

EXHIBIT C.1 (Continued)

4. Create time so that you can be in a “thinkingspace” (e.g., work at home, go to the library,etc.).

5. Map the subject area out in a mind map andthen do a mind dump on Post-it stickers coveringall the points, diagrams, pictures you want tocover. Have one sticker for each point. Then youplace your stickers where they fit best. Usingstickers makes it easy to re-organize your subjectmatter. This will lead to a better presentation.

Presentationcontent

6. At least 10 to 20 percent of your slides should behigh-quality photographs, some of which willnot even require a caption.

7. A picture can replace many words; to understandthis point you need to read Presentation Zen:Simple Ideas on Presentation Design andDelivery by Garr Reynolds,a and Slide:ology: TheArt and Science of Creating Great Presentationsby Nancy Duarte.b

8. Understand what is considered good use ofcolor, photographs, and the “rule of thirds.”

9. For key points, do not go less than 30-pt-sizefont. As Nancy Duarte says, “Look at the slides inthe slide sorter view at 66 percent size. If youcan read it on your computer, it is a good chanceyour audience can read it on the screen.”

10. Limit animation; it is far better that the audienceis able to read all the points on the slide quicklyrather than holding them back.

165


11. Use Guy Kawasaki’s “10/20/30 rule.” A sales-pitch PowerPoint presentation should have10 slides, last no more than 20 minutes, andcontain no font smaller than 30 point.

12. Be aware of being too cute and clever with yourslides. The move to creating a lot of white spaceis all very well, provided your labels on thediagram do not have to be very small.

13. Never show numbers to a decimal place nor tothe dollar if the number is greater than 10,000.If sales are $9,668,943.22, surely it is better tosay, “approx. $10 million” or “$9.7 million.” Theprecise number can be in the written documentif it is deemed worthwhile.

14. Never use clip art; it sends shivers down thespine of the audience and you may lose thembefore you have a chance to present.

Use technology 15. Where possible, if you are going to present on aregular basis, make sure you have a Tablet PC,which gives you the ability to draw when youare making points. This makes the presentationmore interesting; no matter how bad you are atdrawing.

16. Have a simple remote mouse so that you canmove the slides along independently of yourcomputer.

Practice, practice,practice

17. Practice your delivery. The shorter thepresentation, the more you need to practice.For my father’s eulogy, I must have practiced it20 to 30 times. It still remains today the bestspeech I have ever delivered and the one Iprepared the most for.

Presentation itself 18. Bring theatrics into your presentation. Be activeas a presenter, walking up the aisle so that thosein the back see you close up, vary your voice,get down on one knee to emphasize animportant point; have a bit of fun and youraudience may as well. Very few things areunacceptable as a presenter.

(continued)

Appendix C

166

Appendix C


19. Always tell stories to relate to the audience,bringing in humor that is relevant to them.A good presenter should be able to find plentyof humor in the subject without having to resortto telling jokes. No doubt, some of the audiencehave heard the jokes and would rather hearthem from a professional comedian.

20. Make sure your opening words grab theaudience’s attention.

21. If using graphs in a presentation, ensure youhave referred to Stephen Few’s work ondashboard design.

22. Always remember the audience does not knowthe whole content of your speech, particularly ifyou keep the details off the slides. If you doleave some point out, don’t worry about it—theydon’t know or would not realize the error.

23. If there has been some issue relating totransportation, technology, and so forth that hasdelayed the start, avoid starting off with anapology. You can refer to this later on. Your firstfive minutes is the most important for the wholepresentation and must therefore be strictly onthe topic matter.

24. Greet as many members of the audience as youcan before the presentation, as it will help calmyour nerves, and it will also give you theopportunity to clarify their knowledge and askfor their participation, such as at question time.The other benefit is that it confirms that nobodyin the audience would rather be doing your role,so why should you be nervous?

25. If you are delivering a workshop at the endshake hands with as many of the audience aspossible by positioning yourself by the doorwhen the audience leaves. This develops furtherrapport between presenter and audience.

aGarr Reynolds, Presentation Zen: Simple Ideas on Presentation Design and Delivery(Berkeley, CA: New Riders, 2008).bNancy Duarte, Slide:ology: The Art and Science of Creating Great Presentations(Sebastopol, CA: O’Riley, 2008).

167

In addition, I have included a checklist for preparing and deliver-ing a “bullet proof” presentation. (see Exhibit C.2 for a checklist).

EXHIBIT C.2 Preparing and Delivering a Bulletproof Presentation Checklist

PlanningDevelop a purpose of the presentation ◽ Yes ◽ No

Have a goal for the number of slides you will need ◽ Yes ◽ No

Perform research on the subject ◽ Yes ◽ No

Do you know your audience? ◽ Yes ◽ No

Do you know what they are like? ◽ Yes ◽ No

Do you know why they are coming to the presentation? ◽ Yes ◽ No

Do you know what their emotional drivers, points of painare?

◽ Yes ◽ No

Have you thought about solutions that they can work withimmediately?

◽ Yes ◽ No

Have you thought of what handouts you can provideelectronically to help them with the next steps?

◽ Yes ◽ No

Have you thought about why they might resist yoursuggestions?

◽ Yes ◽ No

The creative phaseWhile you are creating avoid editing as you are going

along—do not mix editing with your creative side, inother words your first cut of a PowerPoint should neverbe edited as you go, simply pour down your thoughts,leaving clues for your staff or peers to help in certainareas (see below for an example).

◽ Yes ◽ No

Review recent articles or recent seminars you have attendedfor clever and concise diagrams.

◽ Yes ◽ No

Find some diagrams that tell a story ◽ Yes ◽ No

The editing phaseThe person preparing the slides needs to have attended a

course on PowerPoint.◽ Yes ◽ No

Are you using the whole slide? (avoid using the portraitoption for slides)

◽ Yes ◽ No

Do you create a progress icon to show the audienceprogress through a presentation?

◽ Yes ◽ No

Portrait pictures can be moved to one side and the title andtext to the other.

◽ Yes ◽ No

Are all detailed pictures expanded to the whole slide?(ignore the need for a heading)

◽ Yes ◽ No

(continued)

Appendix C

168

Appendix C


Any typeface in a picture smaller than 24 point will need tobe enlarged

◽ Yes ◽ No

Limit to five to six separate points per slide ◽ Yes ◽ No

Repeat a good diagram if you are talking about a section ofit at a time

◽ Yes ◽ No

Have slides read through by someone who has good editingskills

◽ Yes ◽ No

If you have pictures of people, do you ensure that they arelooking toward the slide content?

◽ Yes ◽ No

First run-through of the presentationOnce the slides have been edited go straight into a full

practice run with one or two of your peers in attendance.◽ Yes ◽ No

Time the length and avoid any interruptions, the testaudience is to note down improvements as they arespotted.

◽ Yes ◽ No

Now repeat this process twice more, if it is a short 15-to-20minute presentation up to five full practices will benecessary. The shorter the harder!

◽ Yes ◽ No

Prepare the master copy of the slides so you can check allis clear, and courier to seminar organizer.

◽ Yes ◽ No

If workshop exercises are to be included, read throughthese carefully and get them checked for clarity by anindependent person.

◽ Yes ◽ No

PowerPoint presentations checklistPrint slides three to a page except for complex slides that

should be shown on their own.◽ Yes ◽ No

Test your laptop on at least two video projectors as somecustom settings that maximize your network can preventyour laptop linking to projectors

◽ Yes ◽ No

Night beforeAvoid late changes; nothing annoys the audience more than

the presentation being in a different order from thepresentation handout. You will make a rod for your ownback when you get requests for the missing slides!

◽ Yes ◽ No

Always test the video projector the night before if you arerequired to run it (you may find a missing cable).

◽ Yes ◽ No

Carry a spare power extension lead and the standard laptopto video projector cable with you.

◽ Yes ◽ No

Add some more story clues for you on the slides ifnecessary.

◽ Yes ◽ No

169


Travel up the night before (plane travel deadens the senses,can effect hearing and you cannot trust the schedules).

◽ Yes ◽ No

If possible, bring a spare video projector with you for extraprotection.

◽ Yes ◽ No

Avoid alcohol the night before, it does reduce performancethe next morning.

◽ Yes ◽ No

Bring your own laptop to the presentation. ◽ Yes ◽ No

Practice the night before, especially the first five minutes(you will need two stories in the first five minutes)

◽ Yes ◽ No

On the dayA brief run-through the first five minutes at the proper

speed before breakfast.◽ Yes ◽ No

Light exercise is a great idea to freshen the mind (I usuallygo for a swim before I speak).

◽ Yes ◽ No

PowerPoint presentations checklistTell stories instead of jokes unless you are very good at it

(joke telling requires excellent timing).◽ Yes ◽ No

Greet as many members of the audience as you can beforethe presentation, it will help calm your nerves and giveyou the opportunity to clarify their knowledge and askfor their participation such as at question time.

◽ Yes ◽ No

At the first break meet with a sample of the audience andenquire about whether the material is of interest andabout the pace of delivery. This may pick up anyproblems and thus helps improve the assessment ratings.

◽ Yes ◽ No

Never apologize to the audience, simply state the facts ifthere is a difficulty of some kind.

◽ Yes ◽ No

Run through an example of the workshop exercise toensure every workshop group has the correct idea ofwhat is required.

◽ Yes ◽ No

Recap what has been covered to date and ask for questions. ◽ Yes ◽ No

At the end of the presentation shake hands with as manyof the audience as possible by positioning yourself by thedoor when the audience leaves. This develops furtherrapport between presenter and audience.

◽ Yes ◽ No

Celebrate —you have done your best ◽ Yes ◽ No

Appendix C

170

APPENDIX DPresentation Templates

In this third edition I am providing some suggested PowerPoint pre-sentation templates to help you get started:

Presentation 1: A burning platform presentation that I would useto get the senior management team over the line to agreeingto a KPI project.

Presentation 2: A presentation I would use to illustrate the criti-cal success factors to the board/government minister, the aimbeing to get agreement about the internal critical success fac-tors.

Presentation 3: A presentation I would use to sell the new thinkingabout KPIs to staff. I would use this presentation as part of theroad show for staff.

These presentations can be found at kpi.davidparmenter.com/thirdedition.

171

APPENDIX EPerformance Measures Database

The key performance indicator (KPI) team will have gatheredand recorded performance measures from information gained

from discussions held with senior management, revisiting companyarchives, reviewing monthly reports, and external research. Inaddition, teams will, during workshop sessions, ascertained newperformance measures they wish to use.

These identified performance measures need to be recorded, col-lated, and modified in a database that is available to all staff. Thisdatabase will have a read-only facility for all employees. Amendmentis permitted only by team coordinators (restricted to their area) andthe KPI team (unlimited restriction).

The following tables are a listing of performance measures to helpstart this process off. They will be a valuable resource when look-ing at performance measures during brainstorming sessions. You canacquire this database electronically from www.davidparmenter.com(for a small fee).

In this edition I have been influenced by Stacey Barr’s work andagree that it is beneficial to evaluate potential measures by asking twoquestions for each potential measure:

1. How strong an indicator of performance is this measure (5 = verystrong, 1 = very weak)?

2. How feasible will it be to actually measure this (5 = very easy aswill already be system generated or will be able to be gatheredthrough minimal effort, 3 = special request will be required togather data, 1 = very difficult to gather data)?

The strength of measure should be evaluated with regards to thecritical success factor you are working with. However with this list

172


Appendix E

I am giving weightings based on their likelihood as an indicator ofperformance.

It is advisable not to provide attendees with this list of performancemeasures until they have reviewed the relevant critical success factorsand spent time ascertaining measures themselves. Introducing this listtoo early will lead to a narrowing of potential performance measures.Some of the performance measures in this list will be performance indi-cators (PIs), result indicators (RI), key performance indicators (KPIs),and key result indicators (KRIs). It is up to the KPI project team toascertain in which of the four categories the final set of performancemeasures should be placed. The recommended category headings fora performance measures database are set out in Chapter 12.

Key for Database

Past All measures measuring past activity (Note: Yesterday’s activ-ity is considered a current measure.)

Current Yesterday’s or today’s activityFuture Measuring an event that is to occur in the future (date of

next meeting with key client, date of next promotion, etc.)

173

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attracttargeted

“noncu

stomers”

Quarterly

Future

Sales

55

Allsectors

Dateofnex

tvisitto

key

cust

om

ers(by

customer

nam

ereported

toCEO)

Wee

kly

Future

S&M

55

Allprivate

sector

Key

cust

om

erse

rvic

ere

ques

tsoutstandingformore

than

48hours

reported

tothege

neral

man

ager

24/7

Curren

tService

team

s4

5Service (c

onti

nu

ed)

174

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Wee

klysalesto

key

cust

om

ersby

majorproduct

lines

(nomore

than

five

product

lines

shown)

Wee

kly

Past

S&M

33

Allprivate

sector

Number

ofproactiv

evisits

tokey

cust

om

ersplanned

fornex

tmonth,

Wee

kly

Future

S&M

35

Allprivate

sector

Number

ofkey

cust

om

errelatio

nships

producingsign

ificantnet

profit(over

$___

____

million)

Quarterly

Past

Sales

53

Allprivate

sector

Number

ofcred

itnotesissued

/returns

from

key

cust

om

ers

Wee

kly

Past

Accountin

g4

5Allprivate

sector

Number

ofvisitsmad

eto

key

cust

om

erslast

month

Monthly

Past

S&M

35

Allprivate

sector

Listofkey

cust

om

erswheretim

esince

lastorder

is>

___weeks

Wee

kly

Past

S&M

55

Allsectors

Number

ofvariationsto

contractby

key

cust

om

erMonthly

Past

S&M

33

Allsectors

Percen

tage

ofke

ycu

stom

ersco

vered

bypartnership

projects

Quarterly

Past

S&M

45

Allprivate

sector

175

Percen

tage

ofke

ycu

stom

ers’

business

(rep

orted

byke

ycu

stomer)

Quarterly

Past

S&M

52

Allprivate

sector

Key

cust

om

erprofitability

Quarterly

Past

S&M

42

Allprivate

sector

Cal

lsonhold

longe

rthan

____

___

seco

nds

Daily

andin

somecases

24/7

Curren

tCallCen

ter

55

Allsectors

key

cust

om

erco

mpla

ints

that

have

notbee

nresolved

with

intw

ohours(rep

orted

toCEO

andge

neral

man

agers)

24/7

Curren

tSales

55

Allsectors

Unresolved

com

pla

ints

from

other

customersat

endofwee

k(notke

ycu

stomers)

Wee

kly

Past

Sales

35

Allsectors

Com

pla

ints

notresolved

duringthe

firstphonecallbyacu

stomer

Daily

Curren

tS&

M3

5Allsectors

Number

ofkey

cust

om

erco

mpla

ints

whereseniorman

agem

entnee

ded

toinstigatetheremed

ialactio

n

Monthly

Past

S&M

55

Allprivate

sector

Average

timeto

resolvecu

stomer

com

pla

ints,to

give

cred

itnotesfor

product

qual

ityproblems,etc.

Wee

kly

Past

Sales

33

Allprivate

sector

Dateofnex

t“outside-in”initiativeto

enhan

ceseniorman

agem

entteam

understan

dingofcu

stomer

nee

ds

Monthly

Future

Sales

25

Allsectors

(con

tin

ued

)

176

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Ser

vice

reques

ts(fau

lts,works

requests)outstandingforother

customers(notke

ycu

stomers)

Wee

kly

Past

Service

team

s3

5Service

Percen

tage

ofsuccessful/unsuccessful

tender

sQuarterly

Past

S&M

45

Allprivate

sector

Movemen

tin

numbersofke

ycu

stomers

inlastquarter

Quarterly

Past

S&M

55

Allprivate

sector

Percen

tage

ofcu

stomer

projectsontim

eMonthly

Past

Project

team

s5

3Service

Average

customer

size

bycatego

ry(categ

ory

Abeingthetop20

percentof

customers)

Quarterly

Past

S&M

33

Allprivate

sector

Average

timefrom

customer

enquiryto

salesteam

response

Wee

kly

Curren

tS&

M4

3Allprivate

sector

Key

cust

om

erin

quir

iesthat

havenot

bee

nresponded

tobythesalesteam

(over24

hours

old)

Daily

Curren

tS&

M5

5Allprivate

sector

Number

ofnew

customers(therate

businessunits

attracts

orwinsnew

customersorbusiness)

Monthly

Past

S&M

34

Allprivate

sector

177

Number

ofkey

cust

om

erre

ferr

als

Monthly

Past

S&M

54

Allprivate

sector

Number

ofre

ferr

alsfrom

other

customers(excludingke

ycu

stomers)

Monthly

Past

S&M

33

Allprivate

sector

Number

ofcu

stomer

serviceinitial

inquir

iesto

follo

wup

Wee

kly

Past

S&M

35

Allprivate

sector

Number

ofcu

stomerswith

outstanding

retentio

ninstallm

ents(m

onito

ring

close-outofproject)

Wee

kly

Past

Salesan

dAccount-

ing

team

55

Allsectors

Post-project

wrap-upsoutstandingwith

customers(m

ajorcu

stomer

projects

only)

Wee

kly

Past

Project

team

s3

5Allprivate

sector

Listingofunprofitable

customersan

dproposedactio

nsto

betake

nQuarterly

Past

S&M

54

Allprivate

sector

Number

ofinitiatives

planned

fornex

tmonth,monthstw

oto

three,

fourto

six

attractcu

rren

tnoncu

stomersto

purchase/use

ourgo

odsorservices

Monthly

Future

Marke

ting

55

Allsectors

Percen

tage

ofcu

stom

erspayingcash

upfrontonco

mmen

cemen

tofproject

Monthly

Past

Accountin

g3

4Allprivate

sector

Marke

tingex

pen

seper

customer

($)

Quarterly

Past

Marke

ting

21

Allprivate

sector

Salesto

new

customersbyoccurren

cetype(e.g.,referrals,promotio

nal

drive,

prospectin

g,web

site,etc.)

Monthly

Past

S&M

33

Allprivate

sector

(con

tin

ued

)

178

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofprofitable

customers

Quarterly

Past

S&M

22

Allprivate

sector

Percen

tage

unprofitable

customers

Monthly

Past

S&M

43

Allsectors

Percen

tage

ofmajorprojectswherethe

firstdesignofadevicefully

met

the

cust

om

er’s

specificatio

ns

Monthly

Past

Sales,

Design

33

Allprivate

sector

Aban

donrate

atca

llcenter—

calle

rgivesup

Daily

Curren

tInform

ation

Tech

nology

(IT)

55

Allsectors

Cal

lsan

swered

firsttim

ebycallcenter

(nothavingto

betran

sferredto

another

party)

Daily

andin

somecases

24/7

Curren

tIT

help

desk,

call

centers

55

Allsectors

Key

product

brandreco

gnition,

percentage

ofsurveyed

sample

who

recalle

dourke

yproduct

brands(based

from

marke

tresearch

)

When

marke

tresearch

isperform

ed

Past

S&M

32

Allprivate

sector

Marke

tshareofke

ybrands

Quarterly

Past

S&M

52

Allprivate

sector

Number

oflead

sge

nerated

byag

ents

Monthly

Past

S&M

55

Service

Number

ofwinningtendersthat

have

createdlosses

Monthly

Past

Operations

33

Allprivate

sector

179

Qu

alit

y/Se

rvic

e/D

eliv

ery/

Ord

erP

roce

ssin

g/P

rici

ng

Per

form

ance

Mea

sure

s

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Thetim

eelap

sedbetwee

nqual

ity

assurance

failu

resonke

yproducts

Wee

kly

Past

Production

35

Man

ufacturing

Num

ber

of

qual

ityproblemsresolved

whichwerefoundduringaproduct

audit

Wee

klyfor

threemonths

postproduct

audit

Past

Quality

Assurance

(QA)

55

Allsectors

Costofqual

ityco

rrectio

n—

rework,

rejects,warrantees,returnsan

dallowan

ces,Inspectio

nlabor,an

deq

uipmen

t,co

mplaintprocessingco

sts

Monthly

Past

QA

53

Allprivate

sector

Tim

esduringday

when

lineat

serving

counterisover__

____

_minuteslong

Daily

Past

Sales

53

Service

Late

del

iver

ies

/in

com

ple

tedel

iver

iesto

key

cust

om

ers

Daily,24

/7Pa

stProduction

55

Allprivate

sector

Percen

tage

ofcu

stomer

ord

ers

dispatch

edin

full

Monthly

Past

Production

44

Man

ufacturing

Surren

der

ratio

ofeq

uipmen

torservice

(whereserviceoreq

uipmen

tisona

monthly

contract)

Monthly

Past

S&M

44

Service (c

onti

nu

ed)

180

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Percen

tage

revenues

from

new

products

orservices

Quarterly

Past

S&M

55

Allprivate

sector

Dateofnex

tnew

serv

iceinitiative

Monthly

Future

Allteam

s4

5Allsectors

Percen

tage

ofon-tim

ein-fulldeliveryto

other

customers(rep

orted

toge

neral

man

agers

Wee

kly

Past

Production

control,

dispatch

,etc.

35

Allsectors

who

dispatch

goods

Ord

eren

tryerrorrate

Wee

kly

Past

Salesan

dbackoffice

35

Allprivate

sector

Percen

tage

ofke

ycu

stom

er’s

orders

that

havebee

ndispatch

edto

the

specificatio

ns

Wee

kly

Past

Operations

43

Allprivate

sector

Datewhen

remed

ialwork

isplanned

tobeco

mpleted(m

ajorprojectsonly)

Wee

kly

Past

Project

team

s5

5Allsectors

Marke

tshare(proportionofbusinessin

agivenmarke

t)Quarterly

Past

S&M

53

Allprivate

sector

Ord

ervalue(totalsalesvalueofthe

wee

k’sorders)

Wee

kly

Past

S&M

45

Allprivate

sector

181

Ord

erscancelle

dbyreason(lim

itto

no

more

than

five

catego

ries)

Wee

kly

Past

Sales

44

Allprivate

sector

Number

ofdefectgo

odsfoundduring

installatio

n(deadonarrival,including

those

that

occurwith

inthefirst90

days

ofoperation)

Wee

kly

Past

S&M,QA

55

Allprivate

sector

Chan

gesto

ordersafterinitial

cust

om

erorder—

controlla

ble

andunco

ntrolla

ble

Monthly

Past

Sales

32

Allprivate

sector

Number

ofpricingerrors

toke

ycu

stom

erinvo

ices

Wee

kly

Past

Sales

53

Allprivate

sector

Number

ofpricingerrors

toother

cust

om

erinvo

ices

Monthly

Past

Sales

43

Allprivate

sector

Tim

elinessan

daccu

racy

ofprice

quotatio

nsto

key

cust

om

ers

Wee

kly

Past

Sales

43

Allprivate

sector

Customer

ord

ersshipped

byex

press

services

becau

seofproductiondelays

Monthly

Past

Allteam

s4

5Allsectors

Percen

tage

ofcu

stomer

ord

ers

dispatch

edin

full

Monthly

Past

Production

44

Man

ufacturing

Percen

tage

ofon-tim

edel

iver

y(show

progressoverthelast

eigh

teen

months)

Monthly

Past

Allteam

s5

5Allsectors

182

Hea

lth

&Sa

fety

/Dis

aste

rR

ecove

ryP

erfo

rman

ceM

easu

res

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Dateofnex

ten

viro

nm

enta

ldis

aste

rclean-uppracticeex

ercise

Quarterly

Future

Operations

45

Allsectors

Dateoflast

envi

ronm

enta

ldis

aste

rclean-uppracticeex

ercise,bytypeof

exercise

Quarterly

Future

Operations

45

Allsectors

Nearmissinciden

twhichco

uld

have

invo

lved

pollu

tionoftheen

vironmen

t24

/7Curren

tProduction

55

Man

ufacturing

Em

ergen

cycalls

onhold

longe

rthan

__seco

ndsnotifi

edto

theCEO

24/7

Past

Allteam

s5

4Govt

andnon-

profitag

encies

Em

ergen

cyresponse

timeoveragiven

duratio

n(rep

orted

immed

iately

tothe

CEO)

24/7

Past

Allteam

s5

4Govt

andnon-

profitag

encies

Acc

iden

tsan

dbreaches

ofsafety

(rep

orted

totheCEO

immed

iately)

24/7

Curren

tHR

55

Allsectors

Number

ofac

ciden

tsordayslost

through

acciden

ts(byreason)

Monthly

Past

HR,all

team

s5

4Allsectors

Acc

iden

tsper

100,00

0hours

worked

Monthly

Past

HR

54

Allsectors

Number

oflosttim

einjuries

inwee

kWee

kly

Past

HR

45

Allsectors

Average

emer

gen

cyresponse

time

Wee

kly

Past

Operations

44

Critic

alservices

sector

183

Lin

kag

ew

ith

Loca

lC

om

mu

nit

y/E

nvi

ron

men

tal/

Was

te/P

ub

lic

Rel

atio

ns

Per

form

ance

Mea

sure

s

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Was

te—

allform

s:scrap,rejects,

underutilized

capacity,idle

time,

downtim

e,ex

cess

production,etc.

Wee

kly

Past

Production

44

Man

ufacturing

Percen

tage

ofcu

rren

tprojectsthat

are

envi

ronm

enta

llyfriendly

Monthly

Past

Public

Relations

(PR)

53

Construction

Community

/envi

ronm

enta

lsatisfaction

ratin

gfrom

external

survey

Periodic

survey

Past

PR

33

Allsectors

Entriesto

envi

ronm

ent/

com

munit

yaw

ardsto

beco

mpletedin

nex

tthree

months

Monthly

Future

Operations

35

Allsectors

Number

ofen

viro

nm

enta

lco

mplaints

received

inaweek

Wee

kly

Past

PR

55

Allsectors

Emissionsfrom

productioninto

the

environmen

t(number)

Daily/W

eekly

Curren

t,Pa

stProduction

45

Man

ufacturing

Number

ofen

vironmen

talinnovatio

ns

implemen

tedin

thepast30

days,by

locatio

n

Monthly

Past

Operations

35

Allsectors

(con

tin

ued

)

184

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofen

vironmen

talinnovatio

ns

tobeim

plemen

tedin

thenex

tmonth

andmonthstw

oto

three,

bylocatio

n

Monthly

Future

Operations

35

Allsectors

Ener

gyco

nsumed

bymajorplant

Daily/W

eekly

Past

Production

45

Allsectors

Percen

tage

ofre

cycl

edm

ater

ialused

asco

nsumab

les

Wee

kly

Past

Production

35

Man

ufacturing

Percen

tage

ofw

aste

that

islater

recycled

Wee

kly

Past

Production

44

Man

ufacturing

Was

tean

dscrapproduced

Wee

kly

Past

Production

33

Man

ufacturing

Wee

kly

wat

erco

nsu

mpti

onco

mpared

towee

klyproduction.

Wee

kly

Past

Production

33

Man

ufacturing

Number

ofem

ployees

invo

lved

inco

mm

unit

yac

tivi

ties

Quarterly

Past

Human

Resources

(HR)

22

Allsectors

Quarterlydonationsto

the

com

munit

yQuarterly

Past

PR

45

Allsectors

Number

ofem

ployees

invo

lved

inup-skilling

loca

lco

mm

unit

yorgan

izations

Quarterly

Past

PR

44

Allsectors

185

Volu

nte

ersrecruite

din

month

Monthly

Past

Operations

55

Charity

Number

ofex

ternal

charities

supported

byco

mpan

yst

aff

volu

nte

ers

Quarterly

Past

Operations

33

Charity

Number

ofm

edia

cove

rageeven

tsplanned

fornex

tmonth,monthstw

oto

three,

fourto

six

Monthly

Future

PR

35

Allsectors

Number

ofpositiv

epre

ssre

leas

esissued

tothepap

ersan

djournalsin

the

past30

days/60

days

Monthly

Past

PR

55

Allsectors

Number

ofpositiv

ean

dneg

ative

arti

cles

pri

nte

din

thepap

ersan

djournalsin

thepast30

days/60

days

Monthly

Past

PR

33

Allsectors

Number

ofpap

ers/radio

stationswho

haveused

pre

ssre

leas

esMonthly

Past

PR

53

Allsectors

Number

ofphoto

s(CEO

board

mem

bers,co

mpan

ylogo

,co

mpan

ypremises)in

pap

erslast

month,months

twoto

three,

fourto

six

Monthly

Past

PR

33

Allsectors

Number

ofco

mm

unit

ysp

onso

rship

projectsin

past12

months

Quarterly

Past

PR

35

Allsectors

(con

tin

ued

)

186

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofco

nfirm

edspee

ches

delivered

by

CEO

toco

mm

unit

yorg

aniz

atio

ns,

conferences,an

dpublic

forumsplanned

fornex

tmonth,months

twoto

three,

fourto

six

Monthly

Future

PR

55

Allsectors

Number

ofco

nfirm

edspee

ches

delivered

bytheseniorman

agem

ent

team

toco

mm

unit

yorg

aniz

atio

ns,

conferences,an

dpublic

forums

planned

fornex

tmonth,monthstw

oto

three,

fourto

six

Monthly

Future

PR

55

Allsectors

Number

ofinitiatives

planned

fornex

tmonth,monthstw

oto

three,

fourto

six

tosupport

tert

iary

inst

ituti

onsthat

areasourceoffuture

employees

Monthly

Future

PR

45

Allsectors

Number

ofrespectedjournalistswho

haveasoundunderstan

dingofour

operation

Quarterly

Past

PR

45

Allsectors

Dateofnex

tdeb

rief

byCEO

tojournalists

Monthly

Future

PR

35

Allsectors

187

Rec

ruit

ing/

Stu

den

tIn

tern

ship

sP

erfo

rman

ceM

easu

res

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofca

ndid

ates

forad

vertised

positio

nQuarterly

Past

HR

33

Allsectors

Can

did

ates

(notke

ypositio

ns)

who

havenotresponded

with

in48

hours

totheirjoboffer

(rep

orted

totw

olayers

of

man

agem

ent)

24/7,Daily

Curren

tHR

55

Allsectors

Key

positio

njoboffersthat

areover48

hours

old

andhavenotyetbee

nacceptedbythech

osen

candid

ate

(rep

ortdaily

toCEO/G

M)

Daily

Curren

tHR

55

Allsectors

Exp

ressionsofinterestfrom

potentia

lca

ndid

ates,whichhavenotbee

nresponded

towith

inthreedaysof

receiptofinterest

Daily

Curren

tHR

55

Allsectors

Dateofco

nfirm

edtestingof

candid

ates

capab

ilitie

sDaily

Past

HR

55

Allsectors

(con

tin

ued

)

188

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Listofshortlisted

candid

ates

when

nex

troundofinterviewshas

yetto

be

organ

ized

Daily

Future

HR

34

Allsectors

Number

ofca

ndid

ates

that

comefrom

employeereferrals

Quarterly

Past

HR

45

Allsectors

Feed

backonrecruitm

ent(survey

ofall

new

employees)

Every

employee

survey

Past

HR

33

Rec

ruit

men

tsin

progresswhen

last

interview

was

overtw

owee

ksag

oWee

kly

Past

HR

55

Allsectors

Number

ofman

agerstrained

inre

cruit

ingpractices

Monthly

Past

HR,all

team

s3

3Allsectors

Number

ofstuden

tswhohave

completedinternshipsin

thelast

quarter(Trialingpotentia

lem

ployees)

Quarterly

Past

PR

55

Allsectors

Number

ofstuden

tsoffered

internships

forthenex

tholid

ayperiod

Wee

kly

Future

PR

55

Allsectors

189

For

Em

plo

yee

Sati

sfac

tio

n/R

eco

gnit

ion

/Ab

sen

teei

sm/L

eave

Per

form

ance

Mea

sure

s

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Satisfactionwith

work

lifebalan

ce(from

staf

fsurvey)

Every

employee

survey

Past

HR

43

Allsectors

By

staf

fmem

ber

–thenumber

ofdays

worked

overseasonjobsin

pastthree

months(ex

cludingstaff

relocated)–lim

itto

top20

with

the

longe

stnumber

ofdaysaw

ay

Quarterly

Past

HR

34

Allsectors

Lengthofserviceofst

affwho

hav

ele

ft(byban

dsless

than

1year,2to

5years,6to

10years,etc.)

Monthly

Past

HR

35

Allsectors

Turn

ove

rofex

perienced

staf

fwho

havebee

nwith

theorgan

izationfor

overthreeyears

Monthly

Past

HR,all

team

s4

5Allsectors

Number

ofst

affmem

berswho

hav

ele

ftwith

in3months,6months,12

monthsofjoiningtheorgan

ization.

Rep

orted

divisionbydivision.

Quarterly

Past

HR

45

Allsectors

(con

tin

ued

)

190

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Listofman

agerswhohavea

hig

htu

rnove

rofst

affwholeftwith

in12

monthsofjoining

Monthly

Past

HR,all

team

s4

5Allsectors

Turn

ove

roffemale

staf

fMonthly

Past

HR,all

team

s4

5Allsectors

Turn

ove

rofst

affbyethnicity

Monthly

Past

HR,all

team

s4

5Allsectors

Percen

tage

ofman

agerswhoare

women

Monthly

Past

HR,all

team

s3

5Allsectors

Listofhighperform

ing

staf

fwhohave

bee

nin

thesamepositio

nforovertw

oyears

Quarterly

Past

HR

54

Allsectors

Percen

tofst

affsatisfie

dwith

empowermen

tan

dfulfillm

ent(assumes

asurvey

isdonethreeto

fourtim

esa

year)

Every

employee

survey

Past

HR

44

Allsectors

191

Sta

ffwhohavehan

ded

intheirnotic

etoday.Staffin

keypositio

nswould

be

notifi

eddirectly

tothech

iefex

ecutiv

eofficer(CEO),other

staffwould

be

reported

totherelevantge

neral

man

ager

orseniorman

ger.(TheCEO

has

theopportunity

totryto

persuad

ethe

staf

fmem

ber

tostay)

24/7

Curren

tHR

55

Allsectors

Atten

dan

cenumbersforsocial

club

functions–byfunctionin

last

quarter

Quarterly

Past

HR

34

Allsectors

Percen

tage

ofstaff,whohavebee

nab

sentformore

than

threewee

ks,who

haveaback-to-w

ork

program

Wee

kly

Past

HR

33

Allsectors

Number

ofCEO

reco

gnit

ions

mad

ein

thepastweek/

nex

ttw

oweeks

Wee

kly

Past

HR

55

Allsectors

Number

ofCEO

reco

gnit

ionsplanned

fornex

tweek/

nex

ttw

oweeks

Wee

kly

Future

HR

55

Allsectors

Number

ofplanned

reco

gnit

ionsin

thenex

twee

k/nex

ttw

oweeks(m

aintained

weeklybyeach

man

ager)

Wee

kly

Future

HR

55

Allsectors

Analysisofem

ployeeab

senteeism

Monthly

Past

allteam

s5

5Allsectors

Employeeco

mplaints

still

unresolved

aftertw

oweeks

Wee

kly

Past

HR

55

Allsectors

(con

tin

ued

)

192

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofinitiatives

implemen

tedafter

the

staf

fsatisfactionsurvey

Wee

klyfor

threemonths

postem

ployee

survey

Past

HR

55

Allsectors

Dateofnex

tst

affsurvey

Monthly

Future

HR

35

Allsectors

Number

ofplanned

celebratio

nsin

nex

tweek/nex

ttw

oweeks

byeach

man

ager)

Wee

kly

Future

HR

55

Allsectors

Staffwith

greaterthan

30days

leav

eow

ing

Monthly

Past

HR

35

Allsectors

Sta

ffwhohavebee

nill

forovertw

owee

kswhodonothaveabackto

work

program

(rep

orted

totherelevant

man

ager

andge

neral

man

ager)

Wee

kly

Past

Allteam

s3

5Allsectors

Number

ofteam

swhohaveundertake

ninternal

user

sati

sfac

tionsurveysin

past6months

Monthly

Past

HR

43

Allsectors

Percen

tage

ofst

affmee

tingco

ntin

uing

professional

developmen

trequirem

ents

Quarterly

Past

Allteam

s3

2Professional

servicefirm

s

193

For

Fin

ance

Per

form

ance

Mea

sure

s

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Deb

tors

over30

days/60

days/90

days

Wee

kly

Past

Accountin

g5

5Allprivate

sector

Bad

deb

tpercentage

toturnover

Monthly

Past

Accountin

g4

5Allprivate

sector

Dayssalesin

receivab

les

Monthly

Past

Accountin

g3

5Allprivate

sector

Daysofpurchases

inacco

unts

payab

leQuarterly

Past

Accountin

g3

5Allprivate

sector

Net

surplus/defi

citbymajordep

artm

ent

Monthly

Past

Accountin

g3

5Allprivate

sector

Deb

t-to-equity

ratio

Monthly

Past

Accountin

g5

5Allprivate

sector

ITex

pen

seas

apercentage

oftotal

administrativeex

pen

seQuarterly

Past

IT,

Account-

ing,

or

Finan

ce

35

Allsectors

Totalheadquarters

costs/em

ployee

(totalorgan

ization’s

staf

f)Monthly

Past

Accountin

g3

5Allsectors

Status(completed,on-track

,beh

ind,at

risk)ofthemajortoptencapita

lex

pen

ditu

reprojects

Monthly

Past

Accountin

g5

4Allsectors

Percen

tage

ofsalesthat

havearisen

from

cross-sellin

gam

ongbusinessunits

Monthly

Past

S&M

53

Allprivate

sector

(con

tin

ued

)

194

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Free

cash

flow

(operatingcash

flow

minuscapita

lex

pen

ditu

res)

Monthly

Past

Accountin

g5

5Allprivate

sector

Cas

h-to-c

ashcycle—

lengthoftim

efrom

cash

outto

cash

inQuarterly

Past

Accountin

g3

2Allprivate

sector

Percen

tage

complete

topercentage

billed

bymajorassign

men

tMonthly

Past

Operations

53

Allprivate

sector

Key

product

profitability

Quarterly

Past

S&M

42

Allprivate

sector

Theaverag

enumber

ofdaysof

productionwhichcanbesourced

from

raw

materials/componen

tsin

inventory

(majorraw

materials/componen

tsonly)

Monthly

Past

Accountin

g5

5Allprivate

sector

Dealerprofitability

Quarterly

Past

S&M

44

Allprivate

sector

Eco

nomic

valuead

ded

per

employee

($)

Quarterly

Past

Accountin

g3

2Allprivate

sector

Gross

marginbymajorbusinessdivision

Monthly

Past

Accountin

g5

5Allprivate

sector

Indirectex

pen

sesas

apercentage

of

sales

Monthly

Past

Accountin

g5

5Allprivate

sector

Net

inco

mebymajorbusinessdivision

Monthly

Past

Accountin

g4

5Allprivate

sector

195

Number

ofcu

rren

tprojectswith

all

progresspaymen

tspaidupto

date

Monthly

Past

Accountin

g3

4Allprivate

sector

Profits

from

new

productsorbusiness

operations($)

Monthly

Past

S&M

42

Allprivate

sector

Profitbefore

interestan

dtaxper

employee($)

Monthly

Past

Accountin

g4

2Allprivate

sector

Return

oncapita

lem

ployed

Monthly

Past

Accountin

g4

5Allprivate

sector

Return

onnet

assetvalue

Monthly

Past

Accountin

g4

4Allprivate

sector

Return

oneq

uity

Monthly

Past

Accountin

g4

5Allprivate

sector

Reven

ues

per

employee($)

Monthly

Past

Accountin

g3

5Allprivate

sector

Reven

ues/totalassets(%

)Monthly

Past

Accountin

g3

5Allprivate

sector

Salesbysalesteam

Monthly

Past

S&M

55

Allprivate

sector

Salesgrowth

rate

bymarke

tsegm

ent

Quarterly

Past

S&M

45

Allprivate

sector

Creditratin

gbyex

ternal

agen

cies

(would

bech

ange

dperiodically)

Quarterly

Past

Accountin

g5

5Allsectors

Investmen

tmad

eto

developnew

marke

tsforproducts/services($)

Quarterly

Past

Sales

32

Allsectors

Team

sex

pen

ditu

reyear

todateplus

forecast

againstyear-endtarget

(track

sactual

andex

pectedag

ainstplanned

expen

ditu

reprofile

foryear)

Monthly

Past

AllTe

ams

44

Allsectors

Totalassets/employee($)

Monthly

Past

Accountin

g3

3Allsectors

Valueofwork

inprogress($)

Monthly

Past

Operations

35

Allsectors

(con

tin

ued

)

196

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Average

costofmaintainingacu

stomer

acco

unt($)

Quarterly

Past

Operations

12

Ban

king

Administrativeex

pen

seas

apercentage

ofgross

premium

Quarterly

Past

Accountin

g3

5Insurance

Percen

tage

ofhours

worked

split

into

fourcatego

ries

(charge

able,

non-recoverable,ad

ministration,other)

Wee

kly

Past

Allservice

team

s5

4Service

Budge

tedtim

eag

ainst

actual

timeon

wee

klybasis

Wee

kly

Past

Allservice

team

s3

3Service

Number

ofsupplie

rsontheacco

unts

payab

leledge

rQuarterly

Past

Finan

ce2

5Allsectors

Dollars

savedbyem

ployeesugg

estio

ns

Quarterly

Past

Accountin

g5

2Allsectors

Percen

tage

ofpaymen

ts(excluding

payroll)

wheretherigh

tam

ountwas

paidan

dontim

e

Monthly

Past

Accountin

g3

3Allsectors

197

Businessdevelopmen

tex

pen

se/administrativeex

pen

seMonthly

Past

Accountin

g3

3Allsectors

Tim

etake

nfrom

month-endto

geta

monthly

finan

cereportto

theCEO

Monthly

Past

Accountin

gorFinan

ce,

HR,IT

45

Allsectors

Tim

etake

nfrom

month-endto

getthe

monthly

reportto

budge

tholders

Monthly

Past

Accountin

g4

5Allsectors

Number

ofacco

untspayab

leinvo

ices

paidlate

Monthly

Past

Accountin

g4

5Allsectors

Potentia

lrevenuein

salespipeline

Wee

kly

Past

S&M

33

Allprivate

sector

Salesto

sellingco

stsratio

Monthly

Past

S&M

43

Allprivate

sector

Average

laborco

stper

hourfordirect,

indirect,an

dtotallaborco

sts

Monthly

Past

Production

22

Allsectors

Clie

ntfundsreceived

forinvestmen

tMonthly

Past

Operations

45

Ban

king

198

Tra

nsa

ctio

nFl

ow

/Ab

and

on

men

t/St

aff

Man

agem

ent/

Lead

ersh

ipP

erfo

rman

ceM

easu

res

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Percen

tage

ofacco

untspayab

leinvo

ices

processed

with

in__

daysofreceipt

Monthly

Past

Operations

44

Allprivate

sector

Number

ofem

ployees

term

inated

for

per

form

ance

orother

issues

Monthly

Past

HR

24

Allsectors

Percen

tage

ofstaffper

form

ance

review

sco

mpleted

Monthly

Past

HR,all

team

s3

4Allsectors

Staffwhohaveverbal

feed

backab

out

per

form

ance

everymonth

Quarterly

Past

HR

34

Allsectors

Percen

tage

oflevel1an

dlevel2

man

agerswhohavemen

tors

Quarterly

Past

HR

53

Allsectors

Dateofnex

t360feed

backs

forLevel-1

andlevel-1man

agers

Monthly

Future

Listoflevel3man

agerswhodonot

havemen

tors

Wee

kly

Past

HR

53

Allsectors

Number

ofman

agerswhoarescoring

over__

____

__ontheirlead

ership

from

the360feed

backsurveys(byman

ager

level)

199

Number

ofvacantle

ader

ship

places

onin-house

course(rep

ortdaily

tothe

CEO

inthelast

threewee

ksbefore

the

course’ssched

uleddate)

Daily

Curren

tAllteam

s4

3Allsectors

Number

ofle

ader

ship

initiatives

targeted

torisingstarsto

beco

mpleted

nex

tmonth,months2to

3,months4to

6

Monthly

Future

HR

43

Allsectors

Dateofnex

tlead

ership

program

and

thelistofsugg

estedattendes

by

division(reported

toCEO)

Wee

kly

Future

Dateofnex

t360feed

backforlevel1

andlevel2man

agers

Monthly

Future

Allteam

s3

5Allsectors

Tim

esavedeach

month

bythrough

aban

donm

ents

byteam

(rep

orted

monthly

featuringtopquartile

perform

ingteam

sin

thisarea).

Monthly

Past

Allteam

s2

2Allsectors

Number

ofco

mmittee

s/task

forces

disban

ded

thismonth

Monthly

Past

Allteam

s4

4Allsectors

Number

ofoverduereports/docu

men

tsrequired

bytheseniorman

agem

ent

team

Wee

kly

Past

Allteam

s4

4Allsectors

(con

tin

ued

)

200

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofco

ntr

acto

rs,undertaking

employeeroles,invo

lved

inmajor

profile

project

Monthly

Past

HR

35

Allsectors

Number

ofpromotio

nsforhigh

perform

ingstaffplanned

inthenex

tthreemonths

Monthly

Future

Allteam

s3

4Allsectors

Dateofthenex

tex

ecutiv

eco

urseto

be

attended

byseniorman

agem

ent/team

mem

bers

Monthly

Future

Allteam

s4

5Allsectors

Percen

tage

ofem

ployees

below

theage

____

Quarterly

Past

IT2

2Allsectors

Percen

tage

ofem

ployees

with

tertiary

educatio

nQuarterly

Past

IT2

4Allsectors

Percen

tage

ofman

agerswith

satisfactory

ITliteracy

Monthly

Past

IT4

3Allsectors

Percen

tage

ofstaffwhojoined

less

than

threemonthsag

owhohavehad

apost-employm

entinterview

Monthly

Past

IT4

4Allsectors

201

Percen

tage

ofper

form

ance

review

sco

mpletedontim

eMonthly

Past

IT3

4Allsectors

Team

swith

thebeston-tim

edelivery

reco

rd(rep

orted

totheGMsan

dmad

eavailable

toallst

affin

theorgan

ization)

Wee

kly

Past

Allteam

s4

4Allsectors

Percen

tage

completedtim

eshee

tsby

deadlin

eWee

kly

Past

Allteam

s2

4Allsectors

List

ofab

andonm

ents

inlastmonth

by

team

Monthly

Past

Allteam

s5

5Allsectors

Last

meaningfulactio

nim

plemen

tedby

each

stan

dingco

mmittee

Monthly

Past

Allteam

s3

4Allsectors

Number

ofreportsterm

inated

this

month

Monthly

Past

Allteam

s4

5Allsectors

Dateofplanned

replacemen

tofservice

that

has

now

becomeoutdated

Monthly

Future

Allteam

s4

5Allsectors

Number

ofab

andonm

ents

tobe

actio

ned

inthenex

t30

days,60

days

and90

days(rep

orted

totheCEO)

Wee

kly

Future

Allteam

s5

5Allsectors

Number

ofhighperform

ingstaffby

division

Monthly

Past

Allteam

s4

4Allsectors

Number

ofhigh-perform

ingstaffwho

donothaveamen

tor(rep

orted

tothe

general

man

agers)

wee

kly

Past

Allteam

s4

4Allsectors

(con

tin

ued

)

202

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Percen

tage

ofpayrollpaymen

tswhere

righ

tam

ountwas

paidan

dontim

eMonthly

Past

Payroll

44

Allsectors

Percen

tage

ofsalesinvo

ices

issued

on

time(w

ithin

__daysfrom

dispatch

)Monthly

Past

Sales

43

Allsectors

Number

ofman

ual

tran

sactions

converted

toau

tomated

electronic

feed

Monthly

Past

Allteam

s4

4Allsectors

Number

ofstrategicsupply

relatio

nships

wherelongterm

agreem

entisin

place

Quarterly

Past

Procu

re-

men

t3

5Allsectors

Percen

tage

ofteam

shavingateam

mee

tingonce

awee

kMonthly

Past

Allteam

s3

3Allsectors

Number

ofprogressinvo

ices

whichare

duethat

havenotyetbee

ninvo

iced

Monthly

Past

Operations

45

Allsectors

Number

ofman

agem

entteam

mee

tings

planned

fornex

twee

kWee

kly

Future

Allteam

s3

3Allsectors

Number

ofmajorplantan

deq

uipmen

twhichisin

use

butpastits

natural

replacemen

tlife

Monthly

Past

Operations

45

Allsectors

203

Tim

edelay

betwee

namajoreven

thap

pen

ingan

ditbeingreported

tothe

seniorman

agem

entteam

(integrity

gap)

Daily

Past

Operations

54

Allsectors

Number

ofem

ployees

inthe

organ

ization

Monthly

Past

HR

35

Allsectors

Tim

ereco

rdingerrors

(e.g.,tim

ech

arge

dto

closedorwrongjobs)

Monthly

Past

Allteam

s3

3Service

Number

ofnew

initiatives

that

will

be

fully

operational

inthenex

tthree

monthsbydep

artm

ent

Monthly

Future

Allteam

s5

5Allsectors

Number

ofteam

swhohavetheirpolicy

andproceduressectionsaccessible

on

intran

et,in

auserfriendly

form

at,an

dupto

date

Monthly

Past

Allteam

s3

5Allsectors

Percen

toflargepurchases(greater

than

$___

__)from

certified

vendors

Monthly

Past

Operations

22

Allsectors

Percen

tofpositiv

efeed

backfrom

employees

afterattendingmeetin

gs(N

ote:assumes

afeed

backprocess

after

everymee

tingviaintran

et)

Monthly

Past

Allteam

s3

2Allsectors

Percen

tage

ofco

ntr

acto

rsto

totalstaff

Quarterly

Past

HR

33

Allsectors

Number

ofco

ntr

acto

rswhohavebeen

employedforoverthreemonths

Quarterly

Past

HR

43

Allsectors

(con

tin

ued

)

204

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Average

employees’y

ears

ofservice

with

compan

yQuarterly

Past

HR

23

Allsectors

Number

ofem

ployees

certified

for

skilled

positio

ns

Quarterly

Past

HR

33

Allsectors

Number

ofem

ployees

with

deleg

ated

spen

dingau

thority

Quarterly

Past

HR

33

Allsectors

Number

ofman

agersaccessingtheir

dep

artm

ent’s

acco

unts

inthege

neral

ledge

r

Monthly

Past

Accountin

g3

4Allsectors

Res

ourc

eco

nse

ntreturned

tooriginatorforrework

andresubmission

(numbersan

ddolla

rs)

Monthly

Past

Planning

44

Construction

Tim

elinessofre

sourc

eco

nse

nts

processing

Quarterly

Past

Planning

44

Construction

Res

ourc

eco

nse

ntap

plicationsthat

are

now

late

Wee

kly

Past

Planning

44

Construction

Number

ofpoli

cyhold

erclaimsmad

eMonthly

Past

Accountin

g4

4Insurance

Valueofpoli

cyhold

erclaimsmad

eby

catego

ryMonthly

Past

Accountin

g3

4Insurance

Insu

rance

pre

miu

msreceived

from

new

insurance

products

Quarterly

Past

S&M

45

Insurance

205

Inve

nto

ry/S

tock

Leve

ls/S

tock

Ou

tsP

erfo

rman

ceM

easu

res

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofst

ock

outsin

wee

kofmajor

inventory

items

Wee

kly

Past

Production

45

Allprivate

sector

Percen

tage

ofin

vento

rysystem

reco

rdsthat

weretested

tobeco

rrectto

actual

quan

tityheld

Monthly,

Rollingch

ecks

Past

Production

33

Man

ufacturing

Number

ofdaysofsaleswhichcanbe

sourced

from

curren

tstock

level-major

inve

nto

ryite

msonly

(Usingthelast

quarter’s

daily

averag

eformajor

inventory

item)

Monthly

Past

Production

33

Man

ufacturing

Theproductionoflate

runs(signof

poorplanning)

asapercentage

of

averag

edaily

production

Wee

kly

Past

Production

33

Man

ufacturing

Excess

inve

nto

ry—

stock

levelsab

ove

norm

alrequirem

ents(listofthestock

swheremore

than

xxdaysofsales,an

dlistofstock

swherelastmovemen

twas

over12

monthsag

o)

Quarterly

Past

Production

44

Allprivate

sector

(con

tin

ued

)

206

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Inve

nto

ryite

msab

ove

max

imum

level

orbelow

minim

um

level(m

ajor

inventory

items)

Monthly

Past

Production

44

Allprivate

sector

Key

productsthat

arean

ticipated

tobe

“out

of

stock

”before

nex

tdelivery

(notifi

edto

CEO)

Daily

Curren

tProduction

55

Allprivate

sector

Number

ofite

msthat

mak

eitthrough

theprocess

with

outbeingreworked

atan

ystag

e

Wee

kly

Past

Operations

44

Allprivate

sector

Availa

bility

oftop10

products–daysof

salesin

store

Wee

kly

Past

Operations

54

Allprivate

sector

Man

ufacturingcycleeffectiven

ess-

processing/through

puttim

efortop10

product

lines

Wee

kly

Past

Operations

43

Allprivate

sector

207

Res

earc

h&

Dev

elo

pm

ent/

Pat

ents

Per

form

ance

Mea

sure

s

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Designcycletim

efornew

products

finished

thisquarter

Quarterly

Past

Research

&Devel-

opmen

t(R&D)

34

Man

ufacturing

Quality

problemsattributable

todesign

Wee

kly

Past

R&D

53

Man

ufacturing

Red

uctionofmovingparts

inmajor

products

Quarterly

Past

R&D

34

Man

ufacturing

Med

ianpaten

tag

ein

keyproducts

Quarterly

Past

R&D

25

Allsectors

Number

ofprofitable

new

products

(with

quarterlysalesover$_

____

and

greaterthan

___percentage

gross

margin)

Quarterly

Past

R&D

43

Allprivate

sector

Number

ofch

ange

sto

theprogram

ming

ofmajoroff-the-shelfap

plicationsused

bytheorgan

ization

Monthly

Past

R&D

55

Man

ufacturing

Late

chan

gesto

new

majorproducts

afterdesignco

mpletio

nMonthly

Past

R&D

55

Man

ufacturing

(con

tin

ued

)

208

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Exp

ectedlaunch

dates

ofthenex

ttop

five

new

products/services

Wee

kly

Future

R&D

45

Allprivate

sector

Serviceorproduct

launch

esbeh

ind

sched

ule

Wee

kly

Future

R&D

43

Allprivate

sector

Tim

etake

nfrom

new

product

initial

planningto

new

product

launch

(major

productsonly)

Quarterly

Past

R&D

33

Allprivate

sector

Numbersofregistered

pat

ents

Quarterly

Past

Accountin

g3

5Allsectors

Average

ageofco

mpan

ypat

ents

Quarterly

Past

Accountin

g3

5Allsectors

Pat

ents

filedan

dissued

that

havebee

ninco

rporatedinto

products

Monthly

Past

R&D

35

Allprivate

sector

Number

ofre

sear

chpap

ersge

nerated

Quarterly

Past

R&D

34

Tertiary

Res

earc

han

dD

evel

opm

ent

expen

ditu

reas

apercentage

ofsales

from

proprietyproducts

Quarterly

Past

R&D

33

Allprivate

sector

Percen

tage

ofhours

spen

ton

rese

arch

and

dev

elopm

entbyresearch

team

(excludes

admin

timeetc.)

Quarterly

Past

R&D

23

Allprivate

sector

Investmen

tin

research

($)

Quarterly

Past

R&D

23

Allprivate

sector

Dateofprototypeco

mpletio

nMonthly

Future

Allteam

s4

5Allsectors

209

Man

agin

gP

roje

cts

Per

form

ance

Mea

sure

s

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

List

oflate

pro

ject

sbyman

ager

(rep

orted

wee

klyto

thesenior

man

agem

entteam

)

Wee

kly

Past

Project

team

s5

5Allsectors

List

ofpro

ject

sthat

areat

risk

ofnon

completio

n(unassign

ed,man

ager

has

left,noprogresshas

bee

nmad

ein

the

last

threemonths)

Wee

kly

Past

Project

team

s5

5Allsectors

Completio

nofpro

ject

sontim

ean

dbudge

t(percentage

ordolla

rsoftotal

projects)

Monthly

Past

Allteam

s4

3Allsectors

Number

ofpro

ject

sfinished

inthe

month

Monthly

Past

Allteam

s3

5Allsectors

Major

pro

ject

saw

aitin

gco

nsensusan

dsign

off(rep

orted

toCEO)

Wee

kly

Past

Allteam

s5

5Allsectors

(con

tin

ued

)

210

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Majorprojectsaw

aitin

gdecisionsthat

arenow

runningbeh

indsched

ule

(rep

orted

toCEO)

Wee

kly

Major

pro

ject

sin

progresswith

out

contin

gency

plans(rep

orted

toCEO)

Wee

kly

Past

Allteam

s3

4Allsectors

Listoftop20

capita

lex

pen

ditu

repro

ject

srunningbeh

indsched

ule

Wee

kly

Past

Allteam

s5

5Allsectors

Number

post

pro

ject

review

soutstanding(m

ajorprojectsonly)

Wee

kly

Past

Accountin

g4

4Allsectors

Number

ofpro

ject

sthat

areman

aged

orstaffedbyco

ntractors

orco

nsulta

nts

Monthly

Past

Allteam

s4

5Allsectors

Number

ofpost

pro

ject

review

sundertake

nto

ascertainlessonslearned

Monthly

Past

HR

34

Allsectors

211

Hea

dQ

uar

ters

Per

form

ance

Mea

sure

s

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofin

itia

tive

sco

mpletedfrom

therecentin-house

satisfactionsurvey

onHQ

functions

Wee

klyfor

threemonths

postsurvey

Past

S&M

55

Allsectors

Percen

tage

of“customer-facing”

emplo

yees

havingon-lineaccess

toinform

ationab

outcu

stom

ers

Monthly

Past

IT3

3Allsectors

Percen

tage

ofem

ployees

whohave

interacted

with

cust

om

ers

Monthly

Past

IT2

3Allsectors

212

For

Pro

du

ctio

n/U

tiliza

tio

n/I

TD

epar

tmen

tP

erfo

rman

ceM

easu

res

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofhours

keysystem

sunavailable

duringoffice

hours

(listtop

10worstoffen

ders)

Monthly

Past

IT3

3Allprivate

sector

Downtim

edueto

differenttypes

of

equipmen

tfailu

reWee

kly

Past

Produc-

tion,IT

33

Man

ufacturing

Number

ofdayswhereke

ysystem

swerenotbacke

d-upat

night

Wee

kly

Past

IT5

5Allsectors

Dateoflasttest

ofreco

veringdatafrom

aback-upheldat

aremote

site

Monthly

Past

IT5

5Allsectors

Number

ofcu

rren

tusers

ofke

ysystem

sMonthly

Past

IT5

3Allsectors

Faults

orservicerequestsclosedin

month

Monthly

Past

IT4

4Allsectors

Uti

liza

tion/cap

acity

oftopfive

ITsystem

sMonthly

Past

IT5

4Allsectors

Lastupdateofeach

team

’sintran

etpag

eMonthly

Past

Allteam

s3

5Allsectors

Percen

tage

spen

tofthisyear’s

tech

nology

capita

lex

pen

ditu

reMonthly

Past

IT4

4Allsectors

Average

mainfram

eresponse

timeby

majorsystem

Wee

kly

Past

IT4

5Allsectors

213

Number

ofIT

contractors

asa

percentage

ofIT

employees

Quarterly

Past

IT,HR

35

Allsectors

Pro

duct

ionyield(Percentage

of

product

producedfitforpurpose

over

totalproduct

produced)

Wee

kly

Past

Production

55

Man

ufacturing

Spaceproductivity

—salesor

pro

duct

ionper

squarefoot

Monthly

Past

S&M

55

Retail

Dateofpil

ot

test

ingco

mpletio

nWee

kly

Past

Allteam

s3

5Allsectors

Dateofnex

tpil

ot

test

Wee

kly

Future

Allteam

s3

5Allsectors

Number

ofprototypes

/pil

ot

test

sco

mmen

cedin

month

bydivision

Monthly

Past

Allteam

s2

4Allsectors

Defects

per

1million__

____

__(six

SIGMAmeasuremen

tprocess)

Monthly

Past

Production

44

Man

ufacturing

Pro

duct

ionset-up/chan

geovertim

eWee

kly

Past

Production

44

Man

ufacturing

Totalvalueoffinished

pro

duct

s/total

pro

duct

ionco

sts

Wee

kly

Past

Operations

44

Man

ufacturing

Unplanned

versusplanned

maintenan

ceMonthly

Past

Production

54

Man

ufacturing

Uti

liza

tionratesofmajormachines

Monthly

Past

Operations

34

Allsectors

Planned

uneconomic

runsoftop10

machines

Daily

Future

Operations

34

Allsectors

Number

ofusers

ofthehuman

resources

system

Monthly

Past

HR

35

Allsectors

Productioncycletim

e(tim

ein

each

stag

e)–use

fortopfive

pro

duct

lines

Monthly

Past

Operations

22

Allprivate

sector

Quality

problemsdueto

equipmen

tfailu

reMonthly

Past

Production

43

Allprivate

sector

(con

tin

ued

)

214

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Ratio

ofnew

pro

duct

s(lessthan

Xyearsold)to

fullco

mpan

ycatalog(%

)Quarterly

Past

Operations

33

Allprivate

sector

Pro

duct

ion

sched

ule

delaysbecau

seofmaterialshortag

esDaily

Curren

tProduction

54

Man

ufacturing

Tim

elostdueto

pro

duct

ion

sched

ule

chan

gesordeviatio

nsfrom

sched

ule

Monthly

Past

Production

52

Man

ufacturing

Improvemen

tin

pro

duct

ivit

y(%

)Wee

kly

Past

Production

44

Man

ufacturing

Number

ofmajorprocesses

mad

efoolproof

Quarterly

Past

Production

44

Man

ufacturing

Instan

ceswhere

pro

duct

iontasksare

notbeingperform

edontim

eforke

yproduct

lines

Daily

Curren

tProduction

44

Allsectors

Percen

tage

ofrequestsforhelpfixe

dby

HelpDeskduringthefirstphonecall

Monthly

Past

HelpDesk

44

Allsectors

Percen

tage

oftim

eIT

program

developershavespen

tonprogram

ming

(excludes

admin

time,

etc.)

Monthly

Past

IT,

especially

IT

44

Allsectors

Number

ofsystem

sthat

havebee

nintegrated

with

other

system

sQuarterly

Past

IT4

5Allsectors

Outage

hours

per

month

Monthly

Past

Operations

43

215

For

Inn

ova

tio

n/S

taff

Tra

inin

gP

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rman

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res

Mea

sure

Fre

quen

cyof

Mea

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t

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(Pas

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Tea

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hat

Would

Use

Mea

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Str

ength

Feas

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ity

Sec

tor

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That

Would

Use

Mea

sure

Man

agerswith

themost

successwith

implemen

tatio

nsoverpastthreeyears,

reported

totheCEO

Quarterly

Past

Allteam

s3

5Allsectors

Number

ofstaffin

nova

tions

implemen

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Wee

kly

Past

Allteam

s5

3Allsectors

Innova

tionsthat

arerunningbeh

ind

Wee

kly

Past

Allteam

s5

3Allsectors

Number

ofin

nova

tionsplanned

for

implemen

tatio

nin

30days,60

days,90

daysreported

totheCEO

Wee

kly

Past

Allteam

s5

4Allsectors

Number

ofin

nova

tions

imple

men

ted

last

month

byteam

(rep

orted

tothe

CEO)

Monthly

Past

Allteam

s5

3Allsectors

Number

ofsu

gges

ted

innova

tions

from

employees

byteam

Monthly

Past

HR

54

Allsectors

Dateofnex

tin

nova

tion

trai

nin

gsessions

Monthly

Future

Allteam

s4

5Allsectors

Annual

averag

eoftr

ainin

gdaysby

team

Monthly

Past

Allteam

s4

5Allsectors

(con

tin

ued

)

216

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofin

nova

tionsmad

eto

existin

gservices

Monthly

Past

R&D

35

Allsectors

Number

ofin

nova

tions

pla

nned

for

imple

men

tati

onin

thenex

t30

days,

60days,90

days

Wee

kly

Future

R&D

54

Allsectors

Number

ofin

nova

tionsmad

eto

major

productsin

last

quarter

Quarterly

Past

R&D

34

Man

ufacturing

Number

ofin

nova

tionsmad

eto

other

products(notmajorproducts)

Monthly

Past

R&D

33

Allprivate

sector

Number

ofin

nova

tionsto

internal

processes

introducedin

oneto

three,

fourto

six,

sevento

nine,

tento

twelve

months

Quarterly

Past

Operations

54

Allsectors

Number

ofreco

gnized

mistake

shighlig

htedlastmonth

Quarterly

Past

Operations

54

Number

oftr

ainin

ghours

booke

dfor

nex

tmonth,months2to

3,months4to

6(inboth

external/internal

courses

by

team

)

Monthly

Future

HR

43

Allsectors

217

Number

oftr

ainin

ghours-booke

dfor

nex

tmonth,months2to

3,months4to

6(inboth

external/internal

courses

for

theseniorman

agem

entteam

)

Monthly

Future

HR

43

Allsectors

Tra

inin

gdaysattended

thismonth,by

team

Monthly

Past

HR

35

Allsectors

Dateofnex

tin

nova

tionto

ourke

yservices

Monthly

Future

Allteam

s4

4Allsectors

Exp

ecteddatewhen

majorproduct

lines

will

becomeobsolete

Quarterly

Future

Allteam

s3

4Allsectors

Ratio

ofim

plemen

tatio

nsto

sugg

estio

ns

mad

eQuarterly

Past

Allteam

s3

3Allsectors

Number

ofman

agerswhohavebee

nthrough

the

innova

tionco

urse

Monthly

Past

Allteam

s3

4Allsectors

Majorim

plemen

tatio

nsin

thepast

eigh

teen

monthsshowingthedeg

reeof

success(exceedex

pectatio

ns,met,less

than

expectatio

ns,ab

andoned

)

Quarterly

Past

Allteam

s3

3Allsectors

Number

ofem

ployees

attending

courses

toincrease

read

ingan

dmathem

atical

skills

Quarterly

Past

HR,

training

33

Allsectors

Number

ofpositio

nswherenee

ds

assessmen

tga

phas

notbee

nperform

edforpositio

n

Quarterly

Past

HR,

training

43

Allsectors

(con

tin

ued

)

218

(Con

tin

ued

)

Mea

sure

Fre

quen

cyof

Mea

sure

men

t

Tim

eZone

(Pas

t,C

urr

ent,

Futu

re)

Tea

m(s

)T

hat

Would

Use

Mea

sure

Str

ength

Feas

ibil

ity

Sec

tor

(s)

That

Would

Use

Mea

sure

Number

ofst

affwhohaveattended

keyco

urses

(e.g.,lead

ership,stress

man

agem

ent,etc.)

Monthly

Past

HR

45

Allsectors

Listoflevel1an

dlevel2man

agerswho

donothavemen

tors

reported

wee

kly

totheCEO.Thismeasure

would

only

nee

dto

beoperational

forashorttim

eonawee

klybasis

Wee

kly

Past

HR

55

Allsectors

Number

ofm

ento

ringmee

tings

held

lastmonth

forrisingstars

Monthly

Past

HR

43

Allsectors

Number

ofm

ento

ringmee

tings

held

lastmonth

forother

staff

Monthly

Past

HR

33

Allsectors

Number

ofinternal

promotio

nsin

the

lastquarter

Monthly

Past

HR

43

Allsectors

Number

ofstaffwhohaveag

reed

upon

professional

developmen

tplans

Quarterly

Past

HR

43

Allsectors

Number

ofteam

swith

abalan

ced

scorecard

Monthly

Past

Balan

ced

scorecard

team

34

Allsectors

219

Number

ofinternal

applicationsforjob

applicationsclosedin

month

Monthly

Past

HR

33

Allsectors

Number

oflevel1an

d2man

agerswho

werepromotedinternally

Quarterly

Past

HR

33

Allsectors

New

staffwhohavenotattended

aninductionprogram

with

intw

owee

ksof

joining(rep

orted

toCEO)

Wee

kly

Past

HR

55

Allsectors

Percen

tage

ofcross-trained

personnel

per

team

Quarterly

Past

Allteam

s3

3Allsectors

Team

snotrepresentedin

thein-house

courses

tobeheldin

thenex

ttw

owee

ks(rep

orted

daily

totheCEO)

Daily

Future

Allteam

s5

5Allsectors

Number

ofcu

mulativ

ework

experience

(years)in

theman

agem

entteam

Quarterly

Past

HR

24

Allsectors

Number

ofke

ypositio

nswith

successionplans

Quarterly

Past

HR

45

Allsectors

Sugg

estio

nsmad

ebystaffas

apercentage

ofsugg

estio

nsim

plemen

ted

Quarterly

Past

HR

44

Allsectors

Number

ofch

ange

sto

new

major

productsto

correctdesigndefi

cien

cies

Quarterly

Past

Design

33

Allsectors

Number

ofem

ployees

upto

datewith

theirprofessional

developmen

tplan

Quarterly

Past

HR,

training

33

Allsectors

Number

ofem

ployees

that

have

improvedskills

Sixmonthly

Past

HR,

training

33

Allsectors

Number

ofstafftrained

infirstaid

Quarterly

Past

HR

33

Allsectors

220

key performance indicators · critical success factors as seen through the board member’s eyes....

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