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© The KPI Institute 2015
KEY PERFORMANCE INDICATORS MASTERCLASS
Towards the use of a rigorous KPI Management Framework
11th - 12th of November 2015 | Riyadh | Kingdom of Saudi Arabia
1
Adrian Brudan
General Manager TKI - EMEA, The KPI Institute
The Fairmont Dubai, 21st floor, Office 2103 – Suite 13
PO Box 119724, Dubai, United Arab Emirates
T: +971 4 311 6556 | M: +971 56 427 9177
E: adrian.brudan@kpiinstitute.com | W: www.kpiinstitute.org
© The KPI Institute 2015 2
CONTACT DETAILS
www.purposefulidentity.com
www.balancedscorecardreview.com
www.integratingperformance.com
Life.lab Building
Suite 606, 198 Harbour Esplanade
Melbourne Docklands, VIC 3008
Australia
office@kpiinstitute.org
+61 3 9028 2223
ADDITIONAL RESOURCES
KEY RESOURCES
© The KPI Institute 2015 3
© The KPI Institute 2015 4
© The KPI Institute 2015 5
At the core of smartKPIs.com is an
online catalogue of over 20,000 KPI
examples from 16 business
functional areas and 25 industries.
An online magazine containing more
than 1,000 articles on topics like
strategy, Balanced Scorecard, KPI,
organizational performance.
An online catalogue
illustrating the use of
corporate identity
elements in practice.
A platform for
integrating performance
management knowledge
at all levels.
The most
comprehensive online
resource dedicated to
the Balanced Scorecard.
RESEARCH
© The KPI Institute 2015 6
Top KPIs Reports by
Functional Area
54 Reports
Details at: http://kpiinstitute.org/publications/
Top KPIs Reports by
Industry
57 Reports
PUBLICATIONS
The KPI Dictionaries
3 Books
© The KPI Institute 2015 7
Certified Strategy and Business
Planning Professional
Certified Data Visualization
Professional
Certified Benchmarking
Professional
Certified Supplier
Performance Professional
Certified Customer Service
Performance Professional
Certified Personal
Performance Professional
Certified KPI Professional
Certified Performance
Improvement Professional
Certified Employee
Performance Professional
Certified Data Analysis
Professional
EDUCATION
© The KPI Institute 2015 8
EDUCATION
Source: The KPI Institute (2015)
© The KPI Institute 2015 9
EDUCATION
Source: The KPI Institute (2015)
© The KPI Institute 2015
OUR CLIENTS
In-house training and advisory services
Telecommunications
Aviation
Chemicals
Utilities
Public Authority
Financial Services
10
© The KPI Institute 2015
OUR CLIENTS
11
Open Courses
Manufacturing Chemicals Public Authority
Aviation Healthcare Financial Services
© The KPI Institute 2015
PROFESSIONAL FORMATION
Professional Associations CertificationsAcademic
Economics | Business Administration | Performance Management
12
© The KPI Institute 2015 13
AGENDA
1
DAY 1 DAY 2
Introduction and
Context
Understanding KPIs
KPIs and Objectives
Setting
KPI Selection
KPI Documentation
and Target Setting
Data Gathering
and Visualization
1
2
4
5
6
3
7
Learning
Assessment Quiz
© The KPI Institute 2015 14
Key learning points Case study Session review
Exercise Video References
LEGEND
© The KPI Institute 2015
LEARNING OBJECTIVES
• Differentiate between objectives, KPIs and initiatives;
• Apply best practice techniques to KPI selection;
• Understand KPI selection in different contexts;
• Document KPIs in a standardized template;
• Learn when and how to use benchmarking in target setting;
• Optimize the KPI activation and data gathering process;
• Enhance the use of data through effective data visualization.
15
© The KPI Institute 2015 16
AGENDA
Introduction and
Context
1. Challenges in working with KPIs
2. The value added by KPIs
3. Organizational levels
4. KPI concept map
1. Identify main challenges in performance measurement;
2. Understand the role of business performance measurement systems;
3. Acknowledge 6 arguments to get buy-in for a KPI implementation project.
Key Learning Points
1
© The KPI Institute 2015
Which are the major challenges:
• You are interested in addressing?
• Your organization/ team is facing?
• Are relevant to the practice overall?
CHALLENGES IN WORKING WITH KPIS
17
© The KPI Institute 2015
51.26%
14.83% 13.88%
10.09% 9.94%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Selecting the right
KPIs
Gathering data for
KPIs
Documenting KPIs
clearly and
concisely
Root cause analysis Decision making
based on KPI
results
What is the most challenging aspect of working
with KPIs?
CHALLENGES IN WORKING WITH KPIS
18
© The KPI Institute 2015
PERFORMANCE MEASUREMENT VS PERFORMANCE
MANAGEMENT
Performance Measurement =
evaluation and assessment of results.
1. Sub-process of performance
management
2. Focuses on the
identification of KPIs
tracking of KPIs
communication KPIs results
Performance Management =
taking action based on the results of the
evaluation to ensure targets achieved.
1. The overarching discipline that deals
with performance.
2. Reflects the approach one entity has
towards performance
3. Includes sub-processes such as:
The formulation of a plan
Actively monitoring
implementation
Readjusting the plan
Performance measurement
Capability development
19
© The KPI Institute 2015
THE VALUE ADDED BY KPIS
Clarity
Improvement
Focus
Communication
20
© The KPI Institute 2015
THE VALUE ADDED BY KPIS
CLARITY • Provide a detailed numerical view of which are the desired results aimed to be achieved
• Facilitate line of sight by mapping contribution to success across organisational levels
FOCUS • Convey what matters
• Convey what requires attention
IMPROVEMENT • Objectively evaluate the level of achievement of desired results
• Readily available data which accelerates corrective action initiation
ENGAGEMENT • Lead to a sense of ownership through responsibility and accountability
• Motivate in achieving better results
• Contribute to building a performance culture
COMMUNICATION • Provide common understanding of the numbers that matter
• Enables precise stakeholder communication
• Demonstrate interest and ability to use state of the art management concepts
LEARNING • Enable comparison of results in time, to reflect trends
• Identify opportunities by comparing to others
• Lead to a better understanding of the business
21
© The KPI Institute 2015
MAIN ROLES OF BPM SYSTEMS
Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007)
59%
41% 41% 41%
35%
29%
24%
18% 18%
12% 12%
6% 6% 6%
0%
10%
20%
30%
40%
50%
60%
70%
22
© The KPI Institute 2015
MAIN FEATURES OF BPM SYSTEMS
Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007)
23
53%
35%
29%
24%
12% 12% 12% 12%
0%
10%
20%
30%
40%
50%
60%
© The KPI Institute 2015
TERMS & TOOLS LINKED TO “PERFORMANCE”
Budgets
Communications
Dashboards
Discussions
Forums
Goals
KPIs
Meetings
Objectives
Performance reviews
Plans
Projects
Reports
Rewards
Scorecards
Targets
Technology
Training
A better structure, alignment, integration
and use of what is already in place is the
answer to improve performance
management practices.
24
© The KPI Institute 2015
INTEGRATION OF TOOLS WITHIN A PERFORMANCE
MANAGEMENT SYSTEM
Source: http://commons.wikimedia.org/wiki/File:Fleischwolf-zerlegt.jpg
Photo taken by: Kku, Modified by: Rainer Zenz
Organizational and
Departmental Level
System Map
Desired State of
Evolution
Strategy Map
Performance Scorecard
Organisational KPI
Catalogue
Portfolio of Initiatives
Dashboard
Performance review
meetings
Individual Level
Individual performance
plans
Performance
evaluations
Performance
conversations
Personal Level
Personal performance
plans
Performance reviews
25
© The KPI Institute 2015
SYSTEM INTEGRATION
ORGANIZATIONAL STRATEGY
INTEGRATED PERFORMANCE
MANAGEMENT SYSTEM
OUTCOMES
OUTCOMES
26
© The KPI Institute 2015
IDENTIFY PERFORMANCE MANAGEMENT TOOLS
27
Match Description No. Tool
90% 1 Goal
# Employees 2 KPI
% Patient satisfaction 3 Initiative
Patient Engagement Program 4 Metric
Deliver the first survey results by 30 July 5 Milestone
Develop the patient satisfaction survey 6 Mission Statement
Integrity 7 Program
Maintain high level of patient satisfaction 8 Objective
Opt 1.Provide best talent for the business / Opt 2.
Growth for the business
9 Target
Quality 10 Task
To be the regional destination provider of innovative and
complex care, setting the standard in the field.
11 Value Driver
Bi-annual patient satisfaction assessment 12 Value Statement
To provide medical care services at high quality
standards to the citizens of the state.
13 Vision Statement
© The KPI Institute 2015
ORGANIZATIONAL LEVELS
Team
Departmental
• Performance
expectations aligned to
departmental and
organizational objectives
Employee
Organizational
• Overall
organizational
objectives
• Departmental (operational) or sub-
departmental (team) processes, aligned
to organizational strategy
28
© The KPI Institute 2015
PERFORMANCE MANAGEMENT SYSTEM ARCHITECTURE
SYSTEM INTEGRATION
Source: The KPI Institute (2014)
29
© The KPI Institute 2015
1. DESIRED STATE OF EVOLUTION
Source: The KPI Institute (2014)
30
© The KPI Institute 2015
2. STRATEGY MAP
Source: The KPI Institute (2014)
31
© The KPI Institute 2015
3. PERFORMANCE SCORECARD
Source: The KPI Institute (2014)
32
© The KPI Institute 2015
4. PERFORMANCE DASHBOARD
33
© The KPI Institute 2015
5. KPI DOCUMENTATION FORM
Source: The KPI Institute (2014)
34
© The KPI Institute 2015
6. KPI REPORT FORM
Source: The KPI Institute (2014)
35
© The KPI Institute 2015
7. PORTFOLIO OF INITIATIVES
Source: The KPI Institute (2014)
36
© The KPI Institute 2015
8. INITIATIVE DESCRIPTION FORM
Source: The KPI Institute (2014)
37
© The KPI Institute 2015
KPI CASCADING
38
© The KPI Institute 2015
KPI MANAGEMENT FRAMEWORK CONCEPT MAP
39
© The KPI Institute 2015
KPI MEASUREMENT FRAMEWORK GOVERNANCE
Top
Management
Department Department Department
Strategy /
Performance Office
• Promote
• Support
• Design
• Implement
• Maintain • Assume
ownership of
targets
• Collect data
• Report data
40
© The KPI Institute 2015
KPI ARCHITECTURE SKILLS
Research
Analysis Synthesis
Software
MS PPT
MS XLS
Strategy Data visualization
Performance
Measurement
Architecture
Coaching
Communication
Facilitation
Technology Interpersonal
Performance
Management
Data
41
© The KPI Institute 2015
1. Most common challenge: KPI selection
2. Why use KPIs?
• Clarity
• Focus
• Improvement
• Engagement
• Communication
• Learning
SESSION REVIEW
42
© The KPI Institute 2015
• Franco-Santos, M., Kennerley, M., Micheli, P., Martinez, V., Mason, S., Marr, B., Gray, D. and Neely, A.
(2007), Towards a definition of a business performance measurement system, International Journal of
Operations and Production Management, 27(8): 784-801. Available at:
https://dspace.lib.cranfield.ac.uk/bitstream/1826/2789/1/Towards%20a%20definition%20of%20busines
s%20performance%20measurement%20system.pdf
Images:
• The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/hr-performance-management-system-toolkit.html
REFERENCES
43
© The KPI Institute 2015 44
AGENDA
Key Learning Points
2 Understanding KPIs 1. KPI related terminology
2. KPIs use case scenarios
3. KPI lifecycle
1. Define objectives, KPIs and initiatives according to terminology standards;
2. Identify the KPI lifecycle stages.
© The KPI Institute 2015
KPI RELATED TERMINOLOGY
• Key Result Areas
(KRAs);
• Key Performance
Indicators (KPIs);
• Performance
Indicators (PIs);
• Measures;
• Metrics;
• Key Result Indicators
(KRIs);
• Analytics;
• Evaluation criteria.
OPTION 2 KRAs KPIs PIs Measures
Metrics – to inform decisions
KPIs – to evaluate performance
OPTION 1
45
© The KPI Institute 2015
METRICS – KPIS- KRIS - ANALYTICS
Decision Making
Performance
Assessment
KPIs
Risk
Assessment
KRIs
Measurement
Metrics
Analytics
46
© The KPI Institute 2015
METRICS
47
# Air temperature
# Air humidity
# Air purity
# Square meters per room
# Employees
# Highway kilometres
# Employee age
# Working hours per year
$ Budget
© The KPI Institute 2015
KEY PERFORMANCE INDICATORS
Source: Spider Strategies (2015)
% Net promoter score
% Budget variance
% Hospital bed occupancy rate
$ Revenues
$ Operating costs
# Patient consultation time
# Caseload per physician
48
© The KPI Institute 2015
KEY RISK INDICATORS
• Key risk indicators are metrics used by organizations to provide an early
signal of increasing risk exposures in various areas of the enterprise.
Objective: Manage the collection of accounts receivable to reduce loss due to write-offs
Key Performance Indicator (KPI) Key Risk Indicator (KRI)
Data about write-offs of accounts in most recent month, quarter,
year.
Analysis of reported financial results for the company’s 25 largest
customers or general collection challenges throughout the industry
that highlight trends signaling future collection concerns.
$ Write-offs of accounts % Large customers in financial difficulty
Linking Objectives to Strategies to Risks to KRI’s
Profitability
Increase
Revenues
Reduce Costs
Strategic
Initiative #1
Strategic
Initiative #2
Strategic
Initiative #3
Strategic
Initiative #4
Potential Risk
Potential Risk
Potential Risk
Potential Risk
KRI
KRI
KRI
KRI
Potential Risk KRI
KPI
KPI
KPI
KPI
Source: Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010)
49
© The KPI Institute 2015
ANALYTICS
Source: Google (2015)
Refers to extracting key information from large volumes of data in
order to:
• predict future trends
• identify patterns Support decision making
50
© The KPI Institute 2015
1. % Employee satisfaction
2. $ Turnover
3. Finalise project by 31 December
4. # Patients from referrals
5. # Employees
6. % Projects delivered on time and on budget
7. Quality
8. % Hospital bed occupancy rate
9. $ Budget
10. Increase market share to 28%
IDENTIFY THE KPIS
KPI Definition:
A measurable expression for the achievement of a desired level of results in an area relevant
to the evaluated entity’s activity.
(The KPI Institute)
51
© The KPI Institute 2015
TERMINOLOGY STANDARDS
Objectives
start with
Verb
KPIs
start with
$ = Value of
# = Number of
% = Percentage of
Initiatives
start with
Noun
Increase customer
satisfaction
$ Revenue per client
CRM software
implementation
# Complaints received
% Customer satisfaction
52
© The KPI Institute 2015
“Corporate Goal 1 – To obtain profit before interest, taxes, depreciation and amortization (EBITDA) ≥
B/.1,110 million up to September 30, 2009.
Corporate Goal 2 – To establish a new pricing structure up to September 30, 2009 depending on the phases
established in the work plan.
Corporate Goal 3 – To provide a preliminary report of the Technical Cooperation Project up to September
30, 2009.
Corporate Goal 4 – To implement planned activities for the Third Set of Locks Project up to September 30,
2009, in compliance with the milestones of the established schedule.
Corporate Goal 5 – To make optimal use of the existing plant to meet transit demands, ensuring a service
level compliance average ≥ 85 percent.”
“Corporate Goal 6 - To adapt the organization through the improvement of the processes identified up to
September 30, 2009.
Source: Panama Canal Authority (2009)
ANALYZE PANAMA CANAL AUTHORITY
CORPORATE GOALS 2009
53
© The KPI Institute 2015
Corporate Goal 7 – To implement 100.0 percent the activities of the Sustainability and Corporate Social
Responsibility Action Plan scheduled for fiscal year 2009.
Corporate Goal 8 – To develop the Monitoring and Evaluation Plan for Sustainable Development and
Integrated Management of Water Resources for the Panama Canal Watershed up to September 30, 2009.
Corporate Goal 9 – To prepare a talent management plan and to provide a generational shift and to meet
emerging needs in the operation up to September 30, 2009.
Corporate Goal 10 – To improve the working environment ≥ 5.0 percent, measured by a satisfaction,
commitment and work climate survey up to September 30, 2009.
Corporate Goal 11 – To ensure that the Corporate Performance Index (CDI) is ≥ 100, up to September 30,
2009.”
ANALYZE PANAMA CANAL AUTHORITY
CORPORATE GOALS 2009
Source: Panama Canal Authority (2009)
54
© The KPI Institute 2015
Positive examples:
“Objective 1 - To increase profitability in a sustainable manner for the benefit of the
country.
Objective 2 - To expand the range of services and products.
Objective 3 - To enhance good corporate governance.
Objective 4 - To efficiently manage the volume and quality of the water resources of the
Panama Canal Watershed.
Objective 5 - To increase productivity through excellence in performance and the wellbeing
of human resources”
Source: Panama Canal Authority (2013)
ANALYZE PANAMA CANAL AUTHORITY
CORPORATE GOALS 2013
55
© The KPI Institute 2015
INTERDISCIPLINARY SYSTEMIC WORLDVIEW
56
© The KPI Institute 2015
KPI USE CASE SCENARIOS
Strategy Management
1 Organizational strategy
2 Organizational operations tracking
3 Departmental strategy
4 Departmental operations tracking
Interlink Level
5 Alliances / Joint ventures relationship scorecard
6 Portfolio management
7 Project management
Operations Management
8 Quality / process management
9 Service level agreements
10 Supplier performance management
Individual Performance 11 Employee performance management
Personal Performance
12 Fitness training
13 Personal performance management
Evaluation
14 Sustainability performance reporting
15 Benefits realization management
16 General strategic / operations reporting
17 Audit
18 Compliance reporting (micro and macroeconomic level)
57
© The KPI Institute 2015
1. ORGANIZATIONAL STRATEGY
58
Context: Scorecards to monitor the achievement of strategy, through KPIs.
Positive aspects: KPIs are monitored in 5 perspectives: Financial, Customer, Operations and
People. Traffic lights are used to enable immediate understanding of performance data.
Recommendations: Link KPIs to more specific strategic objectives, not only to goals.
Comments: The scorecard contain some of the most important fields to track performance.
© The KPI Institute 2015
2. ORGANIZATIONAL OPERATIONS STRATEGY
Source: KPI Institute (2014)
59
Context: Dashboards to provide a more detailed overview of corporate performance.
© The KPI Institute 2015
3. DEPARTMENTAL STRATEGY
Source: KPI Institute (2014)
60
Context: Scorecards to monitor strategy at operational level.
© The KPI Institute 2015
4. DEPARTMENTAL OPERATIONS TRACKING
Source: Godrejinfotech.com (2010)
61
Context: Dashboards to offer visibility into key processes.
Positive aspects: KPIs
are visualized in both
tables and graphs with
the purpose to enhance
data meaning.
Recommendations:
Cluster KPIs around key
processes or activities.
Comments: The interactivity of the dashboard enables managers to access
different data sets with ease, supporting timely decision making.
© The KPI Institute 2015
5. ALLIANCES / JOINT VENTURES RELATIONSHIP
SCORECARD
62
Context: Scorecards to monitor performance of alliances or other business
partnerships.
Positive aspects: KPIs are linked to clear objectives established for the alliance.
Recommendations: Standardize KPI names and allocate a section to comment KPI results.
Comments: Key value drivers for the alliance were identified, such as relationship value or
strength that cluster the scorecard objectives and help managers focus on what matters the
most.
© The KPI Institute 2015
6. PORTFOLIO AND PROJECT MANAGEMENT
63
Context: KPIs to monitor the performances in
terms of managing more projects.
Positive aspects: KPI results are displayed
through graphs, in the format of a dashboard.
Recommendations: Replace pie charts, with
more effective data visualization tools;
Comments: Dashboards are very useful in
managing a portfolio of projects as they provide
key information in order to ensure initiatives are
finalized on time, within budget and resources
are used efficiently.
© The KPI Institute 2015
7. PROJECT MANAGEMENT
Source: SmartKPIs.com (2015)
64
© The KPI Institute 2015
8. QUALITY / PROCESS MANAGEMENT
Source: Adapted from Oak Ride Institute for Science and Education (2005)
65
Context: KPIs to measure quality and compliance with standards, as well as to
support process optimization.
Positive aspects: Process
mapping is used to
standardize activities and
to support process
optimization.
Recommendations:
Establish KPIs to assess
the quality of processes.
© The KPI Institute 2015
8. QUALITY / PROCESS MANAGEMENT
Process improvement
Work Time (value
add)
Before
After
Wait Time (non
value add)
Cost
Defects
Lead time
Inventory
Space
Waste!
Capacity
Cash flow
Customer satisfaction
Customer responsiveness
On time delivery
Productivity
Profit
Quality
66
© The KPI Institute 2015
9. SERVICE LEVEL AGREEMENT (SLA)
Source: Texas State University (n.d)
67
Context: KPIs to ensure the quality of services delivered – whether is about third
party providers (suppliers) or internal providers (departments, divisions).
Positive aspects: Clear targets
are established for each
performance measure.
Recommendations:
Standardize KPI names for more
clarity.
Comments: Internal SLAs can
be used for both internal and
external providers.
© The KPI Institute 2015
10. SUPPLIER PERFORMANCE MANAGEMENT
Compliance with client requirements
Quality and severity of defects
The objectives of the engagement were achieved
Timely delivery schedule
Ability to meet interim milestones
Ability to complete work within agreed upon budget
Ability to control costs / Cost improvements over time
Value for money / Competitiveness of pricing
Provides effective and timely communication
Service and product delivery problems were quickly resolved
Documentation requirements / Understanding of business requirements
Innovative in helping delivering solutions
Understanding of the client’s business processes and practices
Understanding of the industry and market and how it applies to VG
Technical skills and experience
Personnel quality (i.e. independence and thoroughness)
Overall project management
Reasonable negotiations and contract, ease of doing business
Effective, accurate and efficient billing system
Flexible, accessible and responsive to inquiries
Overall satisfaction with vendor deliverables and services
Professional and cooperative behaviour with the client personnel
Work ethic, flexibility and responsiveness
c) 24 Indicatorsb) 8 Categoriesa) 3 Perspectives
Outcomes
Schedule
Budget
Communication
Value add/Innovation
Delivery capability
Responsiveness /
Account Management
Client satisfaction
Outcome performance
Delivery performance
Service excellence
68
Context: KPIs to monitor performance of supplier, for a streamlined supply chain.
© The KPI Institute 2015
11. EMPLOYEE PERFORMANCE MANAGEMENT
Source: KPI Institute (2015)
69
Context: KPIs and scorecards to evaluate performance of each employee in the
organization.
© The KPI Institute 2015
12. FITNESS TRAINING
Source: Body Media Fit (2015)
70
Context: KPIs to track performance of athletes.
Positive aspects: The
dashboard allows target
setting for KPIs and enables
you to visualize progress in
time.
Comments: A clear
perspective on current fitness
performance contributes to
better planning workouts.
© The KPI Institute 2015
13. PERSONAL MANAGEMENT
71
Source: Felton, N. (2013), Annual report
Positive aspects: It provides an instant
overview upon the performance achieved in
several personal areas.
Recommendations: Structure the KPIs under
objectives and assign specific targets that
need to be attained.
Comments: Common personal areas to be
monitored are finances, household
management, professional development,
time management, social activity –
interactions with friends and family.
Context: KPIs to monitor personal achievements, to track daily activities, to
improve time management.
© The KPI Institute 2015
14. SUSTAINABILITY PERFORMANCE REPORTING
Source: Apple (2011)
KP Taxonomy 72
Comments:
Transparency in KPI
results can positively
contribute to brand
image.
Context: KPIs to assess the environmental impact of
activities. Results are presented in sustainability scorecards
or in dedicated performance reports.
Positive aspects: there is a trend in representing
performance data in annual reports through infographics.
Recommendations: Structure the KPIs under
sustainability objectives and outline specific targets that
are desired.
© The KPI Institute 2015
15. BENEFITS REALIZATION MANAGEMENT
Source: Western Australia Department of Treasury and Finance (2005)
73
Positive aspects:
KPIs are accompanied by
target values.
Recommendations: KPI
names should be
standardized.
Comments: benefits
realization management
through KPIs provides the
necessary visibility in
assessing investment
projects.
Context: Benefits realization is an important part of project management and
should rely on KPIs that clearly outline expected benefits.
© The KPI Institute 2015
16. GENERAL OPERATIONAL REPORTING
Source: Clebsch, B., Dougherty, J. D., and Anderson, G. (2004)
74
Recommendations:
Structure the KPIs under
sustainability objectives
and outline specific
targets that are desired.
Comments:
Operational reporting
must be focused on
providing essential data
for decision making.
Context: KPIs are commonly used by departments or teams to report the
performance of their activities.
Positive aspects: KPI results are accompanied by comments to facilitate
understanding of current performance level.
© The KPI Institute 2015
17. AUDIT
Source: Australian National Audit Office (2011)
75
• The checklist from the
example is used to
evaluates the KPIs used
by a set of organizations
to track if their projects
deliver the expected
outputs.
Context: KPIs can be used to assess the quality of the audit department, but also to
analyze how an organization is coordinated.
• The audit aims to
identify the mix
between qualitative and
quantitative KPIs and
whether they had clear
targets assigned.
© The KPI Institute 2015
18. COMPLIANCE REPORTING
Source: Ontario Buys (2010)
76
Positive aspects: KPIs are clustered on
different perspectives.
Recommendations: KPI names should be
standardized.
Comments: Reporting to governmental
institution can also serve for organizations
as a benchmarking technique if results are
published.
Context: KPIs are commonly used to report
compliance with regulations.
© The KPI Institute 2015
KPI LIFECYCLE
KPI lifecycle – Stage 1
Establishment
KPI lifecycle – Stage 2
Use
KPI lifecycle – Stage 3
Evolution
•Needs identification
•Selection
•Documentation
•Visualization
•Activation
•Analysis
•Reporting
•Decision making
•Communication
•Documentation refresh
•Data gathering
•Analysis
•Reporting
•Decision making
•Communication
•Documentation refresh
• Maintain
• Refresh
• Conserve/Suspend
• Supercede
77
© The KPI Institute 2015
1. KPI definition: a measurable expression for the achievement of a desired
level of results in an area relevant to the evaluated entity’s activity.
2. Terminology standards:
• Objectives - Verb
• KPIs - Symbols (#, %, $)
• Initiatives - Noun.
3. KPI lifecycle:
• Establishment
• Use
• Evolution
SESSION REVIEW
Understand
KPIs
78
© The KPI Institute 2015
• Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010.), Developing Key Risk Indicators to
strengthen enterprise risk management: How Key Risk Indicators can sharpen focus on emerging
risks. Available at: http://www.coso.org/documents/COSOKRIPaperFull-
FINALforWebPostingDec110_000.pdf
• Panama Canal Authority (2009), Annual report. Available at:
http://www.pancanal.com/eng/general/reporte-anual/
• Panama Canal Authority (2013), Annual report. Available at:
http://www.pancanal.com/eng/general/reporte-anual/
Images:
• Google (2015), Google Analytics. Available at: http://www.google.com/analytics/
• Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-
dashboard-balanced-scorecard-software/
REFERENCES
79
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AGENDA
Key Learning Points
3 KPIs and Objectives
Setting 1. SMART objectives decomposed
2. Leading vs lagging KPIs
1. Formulate SMART objectives
2. Differentiate leading and lagging KPIs in different contexts;
© The KPI Institute 2015
SMART OBJECTIVES DECOMPOSED
Objective
KPI
Target
Time
Owner
2
• Increase market share
• % Market share
• By financial year end
• 28%
• Marketing Director
Option 1: Increase market share to 28% by the end of the financial year
under Marketing Director coordination.
Option 2:
81
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OBJECTIVES SETTING
2
82
Value drivers Objective KPIsMission
Vision
Corporate
values
Initiatives
© The KPI Institute 2015
LEADING VS LAGGING KPIS
Source: International Association of Oil & Gas Producer (2011)
International Customer Management Institute (n.d)
Leading indicators = measure
things that address what can
create future value
Lagging indicators = look back at
past performance
Vs.
• “outcomes, forward-looking
indicators”
Advantage:
• Being predictive allows the
organization to take better
decisions to address future
events.
Challenge:
• May be difficult to identify
and capture results.
• “measures events / incidents
and consequences,
retrospective”
Advantage:
• Easy to identify and to measure
/ collect results.
Challenge:
• Indicates past performance,
does not reflect current
activities.
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© The KPI Institute 2015
Task:
• Cluster the following examples into leading and lagging
KPIs.
LEADING VS LAGGING KPIS
No. KPI examples
1 % Employee engagement
2 % Patients from referrals
3 % Patients satisfaction
4 % Market share
5 $ Profit
6 # Medical service lead time
7 % Staff with competencies at desired level
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1. SMART objectives: Objective – KPI – Target – Time - Owner
2. Leading or lagging ? – depends on the context
SESSION REVIEW
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• Australian Federal Government (2011), Department of Climate Change and Energy Efficiency annual
report 2010–11. Available at: http://www.climatechange.gov.au/about-us/annual-reports/annual-
report-2010-11
• Australian National Audit Office (1998), Better practice principles for performance information,
available at: http://www.anao.gov.au/Publications/Better-Practice-Guides
• Charted Accountants Professionals Canada (2010), Performance indicators. Available at:
http://www.camagazine.com/archives/print-edition/2010/march/regulars/camagazine34812.aspx
• International Association of Oil & Gas Producer (2011), Process safety – recommended practice on
Key Performance Indicators. Available at: http://www.ogp.org.uk/pubs/456.pdf
• International Customer Management Institute (n.d.), Leading and Lagging Indicators. Available at:
http://www.icmi.com/files/ICMILeading_LaggingIndicatorsExplained.pdf
• Public Record Office Victoria, Australia (2010), Strategic management guidelines: Key Performance
Indicators. Available at: http://prov.vic.gov.au/wp-content/uploads/2011/05/1010g3.pdf
• WACOSS (2011), Qualitative vs. quantitative data collection. Available at:
http://www.wacoss.org.au/CommunitySectorFundingReform/Resources/Fundingreformconsidering/
QualitativeQuantitative.aspx
• Western Australia Police (2005), General Audit. Available at:
http://www.police.wa.gov.au/LinkClick.aspx?link=PDFs/AR05_Performance.pdf&tabid=935
REFERENCES
86
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REVIEW DAY 1 – CROSSWORD
Scenario
• You are split in teams, with the objective of finding out the
crosswords from the next slide.
Tasks
• Identify the 10 words hidden behind letters from the next
slide;
• All words connect to the previous day key concepts.
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REVIEW DAY 1 – CROSSWORD
A S L E A D I N G E T G G V D E R A C K B E K K G
Q T I L O S Z Q L I N D E C Q B C Q P P M K Q E D
A F O B J E C T I V E I A Q D M H R O I L R D Y C
A B O N A S O A R S N B B M D F N Q A S C V B I S
Q E Y P V B N M L Q H C G I L A A A L L H U J S C
W B H O A A S S G T Y S T N O L E Z C A X S C K D
X E N I C D V B M D P E R F O R M A N C E U I I F
C R M K O C V B K A U V E X S W E D X R T Y U N L
D V J M D A N M I O I I E V R Y T E O E G H J D O
Q E R T Y U I O P C Y N R E W Q R A S W V E R I U
D A S H B O A R D R N N R T C Y I Z X I V B N C T
A S C V B N M J H K D I X A A A C G H E K L O A R
I U Y T R E W Q S D G T J L F L F J H W F D S T E
A S C O R E C A R D I I P O C E T S R T D N G O W
C M N B V C U P O L U A T R A Q Y E L H G F S R Q
Q W E R T Y U I O P K T H L A G G I N G E S S D D
G F L A G G I N G W U I O P E L T J H G F D S A F
A S D F G L H Q A Z E V W C R V B N H G F D E W G
V B N M P L O I U Y R E W Q U W L I X A T I Z E H
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• Apple (2011), Environmental responsibility. Available at: http://www.apple.com/environment/
• Australian National Audit Office (2011), Development and implementation of Key Performance
Indicators to support the outcomes and programs framework. Available at:
http://www.anao.gov.au/~/media/Uploads/Audit%20Reports/2011%2012/201112%20Audit%20Report%20
No%205.pdf
• Body Media Fit (2015), Activity Manager. Available at: http://www.bodymedia.com/?whence=
• Clebsch, B., Dougherty, J. D., and Anderson, G. (2004), Management by fact: Benchmarking university
IT services. Available at: http://www.educause.edu/ero/article/management-fact-benchmarking-
university-it-services
• Felton, N. (2013), Annual report. Available at http://feltron.com/FAR13_11.html
• Godrejinfotech.com (2010), Products. Available at:
http://www.godrejinfotech.com/godrej/godrejinfotech/offerings/products/sap/pro_sap_busiObj.html
• KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• KPI Institute (2015), Individual Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/individual-performance-management-toolkit.html
• Oak Ride Institute for Science and Education (2005), Performance measurement process. Available at:
http://www.orau.gov/pbm/handbook/1-1.pdf
• Texas State University (n.d.), Global service level objectives. Available at:
http://www.tr.txstate.edu/ser-cat/sc-object.html
• Western Australia Department of Treasury and Finance (2005), 2004-05 Procurement Reform benefits
realisation report
REFERENCES
89
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AGENDA
Key Learning Points
4 KPI Selection 1. KPI selection in practice
2. KPI selection sources
3. KPI selection techniques
4. KPI selection criteria
1. Design a well structured KPI selection process;
2. Recognize useful KPI selection sources;
3. Deploy KPI selection techniques.
© The KPI Institute 2015
ALLOCATE KPIS FOR EACH OBJECTIVE
Financial
Increase profitability
Maintain financial discipline
Customer
Maintain high levels of patient satisfaction
Expand medical service reach
Internal Processes
Optimize facilities management
Improve patient waiting times
People, Learning & Growth
Nurture engagement, creativity and innovation
Develop workforce skills and competences
Ensure talent availability
No. KPIs list
1 $ Operating expenses
2
% Employees meeting professional development
requirements
3 # Complaints from customers
4 # New patients
5 % Budget variance
6 # Innovation ideas
7 # Employee engagement index
8 # Training hours per full time equivalent (FTE)
9 % Market share
10 % Net profit margin
11 # Patient wait time
12 $ Net cash flow
13 % Hospital bed occupancy rate
14 # Positions filled
15 % Customer satisfaction
16 # Available beds
17 % Critical positions with succession plans in place
18 % Patients seen by the doctor within SLA
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KPI SELECTION PROCESS AND TEHNIQUES
1
2
3
2
Scope clarifications
KPI expo
KPI clustering
Prepare for KPI selection
Facilitate the KPI selection
KPI selection workshop
Relevant questions framing
Value flow analysis
KPI balancing
KPI documentation
First performance review
meeting
Follow up on KPI selection
1
2
3
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SCOPE CLARIFICATIONS
1
2
3
WHAT
Defining what needs to be measured:
WHY
Channels the selection process on a clear path with
specified scope and outputs expected.
Objectives
Processes
Scorecard
Dashboard
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KPI SELECTION SOURCES
Workshop
1
2
3
KPI
Sources
External
lists
Management
Board
Industry
standards
Benchmarking
Competitors
Historical
data
Workshop
Compliance
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KPI SELECTION SOURCES
1
2
3
SECONDARY
INTERNAL EXTERNAL
PRIMARY
• Strategic development plan
(3-5 years)
• Annual business / strategic
plan
• Annual reports
• Internal operational reports
• Competitor review reports
• Printed catalogues
• Online catalogues
(http://www.smartkpis.com/)
• Annual reports of other
organizations (KPIs in
Practice)
• Front-line employees input
• Managers input
• Board input
• Suppliers input
• Customers input
• Expert advice
• Questions in discussion forums
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KPI EXPO
1
2
3
WHAT
• Collection, curation and presentation of relevant KPI
examples.
WHY
HOW
• Consolidating lists from external sources, like smartKPIs.com.
• Using internal sources to identify KPIs, like operational
reports.
Informs Educates Inspires
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KPI CLUSTERING
WHAT
Grouping KPIs in different categories:
• Balanced Scorecard perspectives;
• Objectives;
• Dashboard sections;
• Value Flow Analysis stages;
• Process steps.
WHY
• Enables alignment and identification of possible gaps.
1
2
3
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KPI CLUSTERING
1
Scenario:
• You are part of the management
team operating in the healthcare
industry.
• The board asks you to present 5
KPIs you will be using to track the
performance of the organization.
Task:
• Write down 5 KPIs you would
recommend.
• Use one single post-it note for
each KPI (5 post-it notes per
team).
1
2
3
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RELEVANT QUESTIONS FRAMING
1
2
3
WHY?
• Focus on the importance and relevancy of context
Examples:
• What numbers will demonstrate the objectives
achievement?
• What process are we going through and how long will it
take?
• What will we learn from the data?
• What matters?
• So what?
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RELEVANT QUESTIONS FRAMING
4
FAQs
During the KPI selection
workshop
Questions to prepare in
case they are asked
What are the most relevant
sources for KPI selection?
How many KPIs should we
select?
What will we do with KPI
results?
What is the order of
importance in which the KPI
selection sources should be
analyzed?
What is the procedure for
validating the KPIs selected?
What efforts are required for
data gathering for each KPI?
Who should participate in
the KPI selection process?
What process are we going
through and how long will it
take?
What will we learn from the
data?
What is the ideal format for
KPI selection process?
What figures will reflect the
achievement of company
objectives?
How do we link KPI results
with bonuses?
What are the most relevant
criteria for the KPI selection?
What sort of data we need to
keep track of to ensure
informed decision making?
What are we trying to
achieve by setting up KPIs?
What matters?
1
2
3
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VALUE FLOW ANALYSIS
WHAT?
• Logical model to indicate the value generation
from inputs, process outputs and outcomes.
WHY?
• Gain insight into how the objective can be measured
from different perspectives.
• Provides an overview of the process involved by
achieving the objective.
• Enables the selection of the most relevant KPIs for the
objective.
1
2
3
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VALUE FLOW ANALYSIS
Optimize
inpatient inflows
% Bed occupancy
rate
% Bed turnover
$ Operating costs
$ Revenue per
bed
INPUTS PROCESSES OUTPUTS OUTCOMESOBJECTIVES
# Medical staff
available
# Hospital beds
# Patients
discharged per
day
# Length of stay
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INPUT METRICS
• Measure the quantity/quality of input resources to organizational
activities.
• Generally include: human resources, financial resources
infrastructure.
• Examples:
 Human Resources: # Employees, # Physicians, # Clinical trial
implementation team
 Financial Resources: $ Budget, # Grants, $ Bank loans
 Infrastructure: # Medical equipment available, # Length of stay
Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334
INPUTS PROCESSES OUTPUTS OUTCOMES
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PROCESS METRICS
• Measure the quantity/quality of the activities required to provide
certain expected outputs.
• Generally include: transformation in terms of time and utilization
rates.
• Examples:
 Time: % On-time delivery vaccination, # Time to finalize task
 Utilization: % Equipment utilization rate, # Ambulance response
time
Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334
INPUTS PROCESSES OUTPUTS OUTCOMES
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OUTPUT METRICS
• Measure the quantity/quality of the goods or services created or
provided through the use of inputs;
• They generally include quantifiable results.
• Examples:
 # Patients vaccinated
 # Treatments delivered
 # Surgeries performed
 # Examinations completed
Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334
INPUTS PROCESSES OUTPUTS OUTCOMES
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OUTCOME / IMPACT METRICS
• Measure the quantity/quality of the results achieved through the
provision of goods and services.
• They generally include: added value, impact.
• Examples:
 Impact: % Incidence of disease, % Mortality rate
 Added value: $ Savings generated by innovation ideas,
# Patient satisfaction index, % Net promoter score
Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334
INPUTS PROCESSES OUTPUTS OUTCOMES
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VALUE FLOW ANALYSIS
Objective INPUT PROCESS OUTPUT OUTCOMES
Ensure population
immunization
$ Budget
# Doctors
% On time
delivery of
vaccination
programs
# Population
vaccinated
% Incidence of
disease
% Mortality rate
Maintain high
compliance levels
with regulations
$ Budget
# Audit team
# Time to
complete an
internal audit
# Non-
compliances
found
% Compliance
rate with
regulations
Provide effective
emergency
services
$ Budget
# Ambulances
# ER medical
staff available
# Time to reach
an emergency
call
% Patients seen
in < 15 minutes
after requesting
help
% Mortality rate
on emergency
calls
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1
# Innovation
champions in
each area
4
# Staff in the
innovation program
team
7
$ Value generated by
innovation ideas
10
% Innovation ideas
funded
2
# Innovation
focus groups
5
# Time to evaluate
an idea
8
% Ideas evaluated within
the SLA target of 2 weeks
11
% Innovation ideas
implemented
3 # Patents 6 $ Budget 9
% Innovation ideas
evaluated
12
% Innovation ideas
that generated value
Objective: Operate in an environment that fosters creativity and
innovation
VALUE FLOW ANALYSIS
Input Process Output Outcome
1
2
3
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VALUE FLOW ANALYSIS
Scenario:
• Select one objective of your
choice.
Tasks:
• Write at least 2 input, 2
process, 2 output and 2
outcome metrics.
• Select from these metrics 2-3
KPIs to measure the
achievement of the objective.
• Propose 1-2 initiatives to
address the implementation of
the objectives.
1
2
3
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KPI BALANCING
WHAT
• Quality assurance technique consisting in
selecting at least 2 KPIs for the same objective.
WHY?
• To avoid focusing on certain KPIs at the expense of
others.
• To provide a wider perspective upon actual
performance.
1
2
3
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Write the correct KPI number under each objective, in order
to assure a balanced approach.
KPI BALANCING
6
FAs Objectives No. KPIs
Ambulance
services
A. Provide timely ambulatory services 1 # Surgeries conducted
2 # Flue cases
3 % Diagnosis accuracy
Surgery
services
B. Ensure reliable surgery services 4 # Ambulances available
5 # Discharges per day
6 # Time to conduct a laboratory test
Facilities
management
C. Optimize inpatient flow 7 % Unplanned readmission rate
8 % Population vaccinated
9 % Ambulance reaching patients within SLA
Medical
laboratory
D. Provide timely and accurate diagnosis 10 % Post surgery infections
Preventive
healthcare
E. Increase the citizens immunity
1
2
3
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KPI BALANCING
Leading Lagging
# Incidents of non-compliance # Fatal accidents
# Training hours per FTE % Employees with competencies at desired level
Efficiency Effectiveness
$ New customers acquisition cost # New customers
# Call duration % First call resolution rate
Quantity Quality
# Maintenance requests resolved % Maintenance requests resolved within SLA
# Ideas expressed % Ideas implemented
Subjectivity Objectivity
# Patient satisfaction # Patient complaints received
% Net promoter score # Clients from referrals
1
2
3
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Source: Heinrich, H.W. (1931)
4
KPI BALANCING
1
2
3
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KPI SELECTION WORKSHOP
1
2
3
WHY
• Collective intelligence
insights
• Learning
• Buy-in
WHO
• Clients
• Suppliers
• Employees
• Board
• Management
• Facilitators
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KPI SELECTION WORKSHOP
1
2
3
Agenda
Topics
Context (60 minutes)
5 Agenda and meeting scope review
5 Needs review
10 Terminology and KPI format clarification
20 Selection process and tool review
20 Sample Value Flow Analysis (VFA) as a model
Selection activities (140 minutes)
60 Interactive VFA team exercises
60 Consolidation of KPI wall
20 List revision based on filtering criteria
Review and closing (40 minutes)
20 Review of draft
10 Answering questions
10 Clarifying next steps
240 minutes
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FOLLOW UP ON KPI SELECTION
1
2
3
KPI documentation
• KPI measurement limitations
• Cost benefit analysis
First performance review
meeting
• Review and reconsider
some KPIs that may prove
inefficient to measure and
report in practice.
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KPI SELECTION CRITERIA
Performance criteria
found in practice:
• Attainable
• Complete
• Direct
• Incentivized
• Practical
• Reliable
• Specific
• Tested
• Time bound
• Useful for management
Relevant
Clearly
defined
Balanced
Performance criteria
recommended:
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1. KPI selection sources: internal and external, primary and
secondary.
2. Main KPI selection techniques:
• KPI expo;
• KPI clustering;
• Value Flow Analysis;
• KPI balancing;
• KPI selection workshop.
3. KPI selection criteria: clearly defined, balanced, relevant.
SESSION REVIEW
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• SmartKPIs.com (2015), KPI examples. Available at:
http://www.smartkpis.com/kpi_examples/dashboard/
• Heinrich, H.W. (1931), Industrial accident prevention: A scientific approach. Available at:
http://www.worldcat.org/title/industrial-accident-prevention-a-scientific-approach/oclc/3493629
REFERENCES
119
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AGENDA
Key Learning Points
5 KPI Documentation
and Target Setting
1. KPI documentation form design and
functions
2. KPI documentation process
3. Target setting approaches
1. Design a KPI documentation form;
2. Identify sources of information to document a KPI;
3. Set relevant targets by using a variety of information sources.
© The KPI Institute 2015
KPI DOCUMENTATION FORM FUNCTIONS
Ensure understanding of KPI measurement
Facilitates communication through standardisation
Activation prerequisite
Automation enabler
Knowledge management
Educates stakeholders (KPI owners, data custodians)
Contributes to buy-in by involving the stakeholders
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KPI DOCUMENTATION
WHAT
• Identify metadata fields
• Fill in the required fields for each KPI
WHY
• Simplify communication
• Alignment
• “Setting the rules”
HOW
• Standardized KPI documentation form
Benefits of the organizational KPI Library
• Top performers are 53% more likely than the industry
average to maintain a library of KPI examples and
39% promote the use of performance management to
their employees.
Source: SmartKPIs.com (2015)
Source: Aberdeen (2011)
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KPI DOCUMENTATION FORM DESIGN
Form sections Fields
Identification Name, number, functional area
Definition and usage Definition, link to strategic objective
Calculation Sub-measures, formula, trend
Orientation Meaning, impact, implementation level,
indicator type
Purpose Link to strategic objective
Data profile Automation, frequency, time-lag,
integrity, limitations
Targets Intervals, benchmarking fit
Administration Owner, custodian, source
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KPI DOCUMENTATION FORM (1)
Source: The KPI Institute (2014)
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KPI DOCUMENTATION FORM (2)
Source: Ontario Buys (2009)
125
Positive aspects: A comprehensive 2-3 pages
documentation form;
Recommendations: A table format for the
document is recommended.
Comments: Other fields, besides the ones
present in the right image are:
• Rational (the need for this KPI);
• Benefits;
• Underlying leading practices;
• Relevancy;
• Target considerations (establishment and impact
with other metrics);
• Related metrics and standards;
• Implementation (calculation parameters, formula,
what to include and exclude )
• Data accessibility;
• Data source;
• Implementation challenges.
© The KPI Institute 2015
KPI DOCUMENTATION FORM (3)
Source: HSE (2012)
126
Positive aspects: Proper display of
information – using a 1 page table, while
providing the critical information for KPI
measurement.
Recommendations: Standardize KPI
names.
Comments:
• The use of predefined checklist, to
standardize response options;
• The insert of hyperlinks in the
documents to redirect the reader to
additional information;
• Provides direct contact details, such
email addresses.
© The KPI Institute 2015
KPI DOCUMENTATION FORM
Source: The KPI Institute (2014)
• Organizations use on average 12 different fields to
document a KPI
• The most popular fields are:
21 19 18
13 12 11
8 7 7 6
0
5
10
15
20
25
Name Definition Calculation
formula
Data source KPI ID
record
Purpose Targets/
Thresholds
Subordinate
measures
used for
calculation
Limitations Standard
reporting
frequency
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KPI DOCUMENTATION PROCESS
Review internal literature
Review external resources
Consult with staff collecting or using the data
Present to KPI owner for approval
Review and approve by KPI architect / SME / Strategy Manager
Approve by management team
Add to organizational KPI library
3
4
5
6
1
2
7
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THE ORGANIZATIONAL KPI LIBRARY
Process
Design the initial KPI
documentation form
Update KPI documentation forms
Review, update and sign-off KPI
documentation forms
Approve
Centralize all KPI documentation
forms in a KPI library
Governance
Strategy Office / KPI
implementation team
Data custodians
KPI data owners
Top management
Strategy Office / KPI
implementation team
3
4
5
1
2
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PRACTICE KPI DOCUMENTATION
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WORKING WITH TARGETS
• Show the desired result level for KPIs
• Represent the starting point in the
measuring and analysis process
(comparing to actual / desired level)
• Impact behavior
WHY The Goal Setting Theory (Ed Locke, Gary Latham)
Working with
Targets
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TARGET SETTING PROCESS
Consultations in target
setting should start with
the top management. As KPIs are active and data
is gathered, targets may be
reviewed and recalibrated Targets need to be
adjusted periodically as
the internal and external
environment of the
company is in a
permanent change.
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TARGET SETTING SOURCES
Contextual
Analysis
Internal
Benchmarking
External
Benchmarking
External analysis
(market trends)
Historical
records
Working with
Targets
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TARGET SETTING APPROACHES
Top-down
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TARGET SETTING APPROACHES
Bottom-up
# Turn time
15 min
Pre-flight check
5 min.
Meal & beverage
provisioning
5 min.
Passenger
boarding and
deplaning 10 min.
Cargo loading and
unloading
10 min.
Cabin grooming
3 min.
Fuelling
5 min.
• Some activities can take place in the same time like cabin grooming and cargo
loading or unloading, allowing the process to be more efficient
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TARGET SETTING APPROACHES
Establishing thresholds
Set target
value
Determine
trend
• Increasing
• Decreasing
• Within range
Establish
thresholds
• Above target
• In tolerance range
• Below target
Define each
threshold
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KPIS TREND
Increasing
Within range
Decreasing
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KPI THRESHOLDS
Popular methodologies to express thresholds
Traffic light:
• 2 points scale
 Meets or exceeds target
 Below target
• 3 points scale
 Meets or exceeds target
 Acceptable range
 Far below target
• 4 points scale
 Above target
 Meets target
 Acceptable range
 Far below target
138
© The KPI Institute 2015
KPI THRESHOLDS
Perspective / Strategic Objectives / KPIs SRF Actual result Target Thresholds Status
Financial
Ensure financial stability
$ Revenue M 10,500 10,000
>10,000
9,000-10,000
<9,000
Customers
Maintain high level of patient satisfaction
% Patient satisfaction Q 65% 80%
>80%
70-80%
<70%
Internal Processes
Ensure timely services
# Waiting time for consultation M 20 30
<30
30-35
>35
People, Learning and Growth
Develop staff competencies
# Training hours per employee Y 30 24
24-28
20-24; 28-32
<20; >32
139
© The KPI Institute 2015
CHALLENGES IN WORKING WITH TARGETS
Technical
• Historical data does not
exist;
• Accuracy of forecasts or
analysis on which targets
are set;
• The use of benchmarking
data;
• Assigning weights.
Social
• Targets are perceived
either too high or too low;
• Targets are imposed, not
established collaboratively;
• Negative behaviors driven
by target setting.
140
© The KPI Institute 2015
Which negative behaviors are associated with performance
based pay? Allocate the correct number in front of each
statement.
CHALLENGES IN WORKING WITH TARGETS
Match Description No. Behavior
Establishing lower targets than the realistic
level estimated as possible.
1 Gaming
Looking after the achievement of own
targets, without consideration of the
implications for other areas in the
organization.
2 Sandbagging
Disregarding environmental and safety
considerations in the process of meeting
targets.
3 Tunnel behavior
Influencing results through unapproved means
to ensure target achievement.
4
Unethical
behavior
141
© The KPI Institute 2015
1. KPI documentation form functions are to:
• Provide an easier understanding of KPIs;
• Facilitate communication;
• Prepare KPIs activation;
• Enable automation;
• Ensure knowledge management;
• Educate stakeholders;
• Contribute to buy-in;
2. Most important fields in a KPI documentation form: name, definition,
calculation formula, target, data source, data owner, data custodian.
3. Challenges in working with targets: sandbagging, tunnel behavior,
unethical behavior and gaming.
SESSION REVIEW
142
© The KPI Institute 2015
• Aberdeen Group (2011), Enterprise performance management. Available at:
http://www.aberdeen.com/Aberdeen-Library/6659/RA-enterprise-performance-management.aspx,
• The KPI Institute (2014), KPI documentation forms research study
Images:
• HSE (2012), KPI guidelines. Available at:
http://www.hse.ie/eng/services/Publications/corporate/performancereports/kpiguidelines2012.pdf
• Khaled, A., Sanjoy, K. P., Ripon, K. and Salahuddin A. (2011), Selection of suppliers through different
multi-criteria decision making techniques. Available at:
journalofbusiness.org/index.php/GJMBR/article/download/479/426
• KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• Ontario Buys (2009), Performance measurement. Phase II - User guide. Available at:
http://www.doingbusiness.mgs.gov.on.ca/mbs/psb/psb.nsf/Attachments/BPSPerformMeasurePhaseII-
UserGuide-pdf-eng/$FILE/perf_meas_userguide-eng.pdf
• SmartKPIs.com (2015), Net promoter score. Available at: http://www.smartkpis.com/kpi-key-
performance-indicator/net-promoter-score-1303.html
REFERENCES
143
© The KPI Institute 2015 144
AGENDA
Key Learning Points
6 Data Gathering and
Visualization
1. KPI activation process
2. KPI activation tools and techniques
3. Scorecards and dashboards design
1. Identify data quality dimensions;
2. Use KPI activation techniques and tools;
3. Design effective data visualization tools.
© The KPI Institute 2015
IDENTIFY DATA QUALITY ISSUES
KPI Name
Actual
Result
Department Data Custodian Position
Submission
date
Submission
deadline
# Time to fill a vacant position 35 HR Allan Smith Finance Manager 29-05-14 01-06-14
% Employee satisfaction 89% HR Allan Smith Finance Manager 28-05-14 01-06-14
% Return on capital employed
(ROCE)
5% Finance Allan Smith Finance Manager 30-05-14 01-06-14
# Caseload per physician 55 Operations Dan McKenny Operations Manager 29-05-14 01-06-14
% Net promoter score Marketing Joe Linch Marketing Manager 25-05-14 01-06-14
% Patients retention 10% Marketing Joe Linch Marketing Manager 28-05-14 01-06-14
% Contracts signed 234 Logistics Julien Harrison Logistics Manager 02-06-14 01-06-14
# Consultation rooms available 4 Operations Dan McKenny Operations Manager 25-05-14 01-06-14
$ Consultation time 30 Operations Dan McKenny Operations Manager 27-05-14 01-06-14
% Brand awareness 50% Marketing Joe Linch Marketing Manager 27-05-14 01-06-14
% Suppliers accounting for 80% of
spending
10% Logistics Julien Harrison Logistics Manager 27-05-14 01-06-14
You have received the following data to compile a report. You are requested
to perform a quick data audit and identify possible issues.
145
© The KPI Institute 2015
Data
quality
Timeliness
Completeness
Consistency
Conformity
Uniqueness
Accuracy
DATA QUALITY DIMENSIONS
Is all the necessary
data present?
Is the data available
at the time needed?
Are there
no
duplicate
records for
the same
data?
Does data
reflect the
real world
objects or
a verifiable
source?
Is the data compliant with the
format, type and range
requested?
Is the data
presenting the same
values in different
systems?
146
© The KPI Institute 2015
DATA QUALITY DIMENSIONS
Most common challenges:
Completeness
Availability
AccuracyTimeliness
147
© The KPI Institute 2015
THE KPI ACTIVATION / DATA GATHERING PROCESS
1
• Meet with data custodians
2
• Secure activation budget
3
• Design the data gathering template
4
• Communicate the template to data custodians
5
• Send KPI data gathering notification
6
• Send reminder email
7
• Receive data
KPI
activation
On-going
data
gathering
process
148
© The KPI Institute 2015
DATA GATHERING GOVERNANCE
KPI Owner
• Responsible to
reach KPI targets
Data Custodian
• Responsible to
gather data for
KPIs
Report Generator
This role can be taken by:
• Data custodian
• KPI owner
• A third party within the organization (e.g.
data analyst, strategy/performance
manager)
149
© The KPI Institute 2015
DISCOVER DATA CUSTODIAN ROLES
Analyze KPI measurement options
Reach the targets for the KPIs
Document KPIs
Select KPIs
Activate KPIs
Take decisions based on KPI results
Cascade KPIs to lower organizational levels
Find solutions for inactive KPIs
Ensure quality of data gathered: compliance with measurement
methodology, accuracy and timeliness of submission
Update KPI documentation forms
150
© The KPI Institute 2015
KPI DATA GATHERING SOURCES
SourcesSurveys
ERP
Internal
Operations
Benchmarking
reports
External entities
(accreditations,
ratings)
# Customer satisfaction
# Employee engagement
Universities
Hospitals
SAP
Oracle
Production reports
HSSE observation sheets
External
benchmarking reports
151
© The KPI Institute 2015
KPI ACTIVATION TOOLS
Data gathering process map
Data gathering template
KPI documentation form
Source: The KPI Institute (2015)
1
3
2
152
© The KPI Institute 2015
KPI ACTIVATION TOOLS
Data gathering process map
11
3
2
Source: The KPI Institute (2015)
153
© The KPI Institute 2015
KPI ACTIVATION TOOLS
Data gathering template
1
3
2
Source: The KPI Institute (2015)
154
© The KPI Institute 2015
KPI ACTIVATION TOOLS
KPI Documentation form
1
3
2
Source: The KPI Institute (2015)
155
© The KPI Institute 2015
KPI ACTIVATION / GATHERING TECHNIQUES
Meeting KPI data custodians in
person
Involving data custodians in a
community of practice
Sending reminder email
1
3
2
After KPI activation, involving data custodians in a
community of practice and sending a reminder email
become part of an on-going process to gather data.
156
© The KPI Institute 2015
KPI ACTIVATION TECHNIQUES
Meeting KPI data custodians in person
Maritz Institute - 3 main benefits for conducting face
to face meetings:
Source: EQAVET (n.d.)
1
3
2
Inspires a
positive
attitude
Strengthens
human networks
and business
relationships
Captures
attention
157
© The KPI Institute 2015
KPI ACTIVATION TECHNIQUES
Involving data custodians in a community of
practice
Source: EQAVET (n.d.)
• Provides a common platform for data custodians to
communicate and share work related experience;
• Stimulates learning by supplying a medium for
sharing best practices and tutoring;
1
3
2
• Creates collaborative processes that add value and
maximize data custodian efficiency.
158
© The KPI Institute 2015
KPI ACTIVATION TECHNIQUES
Custodian name
# KPIs to
report
# KPIs already
reported on
KPIs not reported on yet Due date Status Comment
John Doe 8 8 none 13-Jan-15 Submitted
Ann Smith 9 8
% Ambulance service budget
out of total operational
budget
13-Jun-15 Outstanding
Emory Lafayette 5 3
% Profit rate, $ Revenue per
patient
13-Jun-15 Outstanding
Carlos Mendoza 6 5
% Successful treatments
delivered
13-Jun-15 Outstanding
Ahmed Alsaudi 5 3
# Visits per patient,
# Physicians per shift
13-Jun-15 Outstanding
Luis Ramirez 4 3
# Emergency room patient
wait time
13-Jun-15 Outstanding
Anthony Gleason 2 0
# Medical service quality
rating, % Treatment price
variance from market
average
13-Jun-15
Not
submitted
Mike Myers 1 0 % Market share 13-Jun-15
Not
submitted
Sending reminder email
1
3
2
159
© The KPI Institute 2015
DATA COLLECTION METHODS
• Manual - Microsoft Excel
• Automated:
 Off-the shelf software;
 Custom-designed software.
Source: Gartner (2015)
160
© The KPI Institute 2015
Source: Spider Strategies (2015)
SPIDER STRATEGIES
161
© The KPI Institute 2015
SOFTWARE SPOTLIGHT
162
© The KPI Institute 2015
DATA VISUALIZATION GUIDELINES
Graphical Representation Checklist:
Is it necessary that the viewer makes his own
calculations?
Is data missing?
Are the axes visible enough?
Do lines intersect the data?
Is there an informative title?
Are all tags correctly associated with the graph
elements?
Are there too many dimensions in the graph?
Are there scales for all axes included?
Is 0 included in all line graphs?
Source: Hichert (2006)
163Data
Visualization
© The KPI Institute 2015
DATA VISUALIZATION GUIDELINES
Source: The KPI Institute (2014)
164
© The KPI Institute 2015
COMMONLY USED GRAPHS IN PRACTICE
165
Bar charts
Bullet graphs
Dial charts
Line charts
Pie charts
Sparkline
1
2
3
4
5
6
© The KPI Institute 2015
BAR CHARTS
Source: Adapted from Adecco (2013)
166
0
5
10
15
20
25
2009 2010 2011 2012 2013
Revenues (EUR billions)
0% 5% 10% 15% 20% 25% 30%
Australia & New Zealand
Switzerland
LHH
Iberia
Nordics
Italy
Benelux
Japan
Germany & Austria
UK & Ireland
Emerging markets
North America
France
2013 Revenue split by segment (%)
0% 20% 40% 60% 80% 100%
Branch managers
Senior managers
All managers
Gender distribution in 2013 (%)
Female Male
Column chart Bar chart
Stacked-bar chart
For comparing individual values
1
2
3
4
5
6
2
3
4
5
© The KPI Institute 2015
BULLET GRAPH
Source: Adapted from Centrelink (2010)
To compare actual results with targets
1
2
3
4
5
6
% Community
satisfaction
% Medical practitioner
satisfaction
% Practice manager
satisfaction
% Pharmacist satisfaction
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
Thresholds (Under target, within tolerance limits, above targets)
Target
Actual performance
Data 167
© The KPI Institute 2015
DIAL CHARTS
Source: Adapted from http://dashboard.virginiadot.org/default.aspx
168
Useful for signalling threshold values
1
2
3
4
5
6
© The KPI Institute 2015
LINE CHART
Source: Adapted from Unilever (2013)
169
Useful for tracking trends
1
2
3
4
5
6
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Net profit margin (%)
0
1,000
2,000
3,000
4,000
5,000
6,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Net profit (EUR million)
© The KPI Institute 2015
PIE CHART
170
Useful for comparing different parts of a whole
1
2
3
4
5
6
51%49%
% Net sales by segment
Hardware (1,140 € m) Software (1,099 € m)
15%
13%
29%
43%
% Net sales by segment
Asia / Pacific / Africa (332 € m) Americas (304 € m)
Germany (644 € m) Europe (959 € m)
67%
33%
% Net sales by segment
Banking (1,497 € m) Retail (742 € m)
© The KPI Institute 2015
SPARKLINE
Source: Adapted from United States Office of Personnel (2012),
171
Useful for showing data trends in a condensed manner
1
2
3
4
5
6
© The KPI Institute 2015
SPARKLINES & BULLET GRAPHS DASHBOARD
172
1
3
4
5
6
2
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Equinox Center (2014)
173
3D
Pie chart
Donut chart
Crowded graphs
Scales from 0
Background
1
2
3
4
5
6
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from Adecco (2014)
174
1
2
3
4
5
6
0
10
20
30
40
50
60
70
80
90
1 2 3 4 5
3D or not?
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from Adecco (2014)
175
3D or not?
1
2
3
4
5
6
0
10
20
30
40
50
60
70
80
90
1 2 3 4 5
51
62
71
77
82
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from Word Bank (2014)
176
Avoid 3D graphics
1
2
3
4
5
6
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health expenditure
19.4% 19.3% 18.6% 17.9%
Canada
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health
expenditure
14.7%
12.8% 13.4% 13.2%
Singapore
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health expenditure
25.6% 25.9% 25.1% 23.9%
United States
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health
expenditure
16.6% 16.2%
14.0%
15.9%
India
19.4% 19.3% 18.6% 17.9%
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health expenditure
Canada
14.7%
12.8% 13.4% 13.2%
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health expenditure
Singapore
25.6% 25.9% 25.1% 23.9%
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health expenditure
United States
25.6% 25.9% 25.1% 23.9%
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012
% Health expenditure
India
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from US Government (2014)
177
Pie charts: Inefficient use of space
1
2
3
4
5
6
Healthcare, 27%
Pensions, 25%
Defense, 22%
Wefare, 11%
Interest, 6%
Education, 3%
Transportation, 3%
Protection, 1%
General
Government , 1%Other spending,
1%
Federal Spending for United States (2014)
27%
25%
22%
11%
6%
3%
3%
1%
1%
1%
0% 5% 10% 15% 20% 25% 30%
Healthcare
Pensions
Defense
Wefare
Interest
Education
Transportation
Protection
General Government
Other spending
Federal Spending for United States
(2014)
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from Astra Zeneca (2012)
178
Doughnut charts = an ink saving version of pie-charts
1
4
5
6
21%
27%
39%
13%
2011
Base salary
Bonus
PSP
AZIP
Fixed
Variable
20%
32%
36%
12%
2010
Base salary
Bonus
PSP
AZIP
Fixed
Variable
19%
34%
29%
18%
2009
Base salary
Bonus
PSP
AZIP
Fixed
Variable
26%
32%
31%
11%
2011
Base salary
Bonus
PSP
AZIP
Fixed
Variable
24%
36%
30%
10%
2010
Base salary
Bonus
PSP
AZIP
Fixed
Variable
23%
35%
26%
16%
2009
Base salary
Bonus
PSP
AZIP
Fixed
Variable
3
2
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from MuRata (2014)
179
Avoid crowded graphs
1
2
3
4
5
6
¥0.0
¥50.0
¥100.0
¥150.0
¥200.0
¥250.0
¥300.0
Sales by product
2010 2011 2012 2013 2014
Too much information
on one graph creates
confusion and relevant
data is no longer
visible.
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: MuRata (2014)
180
Avoid crowded graphs
1
2
3
4
5
6
*The black line represents the average
value of the 5 analyzed years
*The green column represents the average
sales value of all products
¥0.0
¥50.0
¥100.0
¥150.0
¥200.0
¥250.0
¥300.0
2010
¥0.0
¥50.0
¥100.0
¥150.0
¥200.0
¥250.0
¥300.0
2011
¥0.0
¥50.0
¥100.0
¥150.0
¥200.0
¥250.0
¥300.0
2012
¥0.0
¥50.0
¥100.0
¥150.0
¥200.0
¥250.0
¥300.0
2013
¥0.0
¥50.0
¥100.0
¥150.0
¥200.0
¥250.0
¥300.0
2014
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Hichert (2006)
181
“Simplicity is the ultimate sophistication” – Leonardo DaVinci
1
2
3
4
5
6
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from Luftansa (2014)
182
Scales should start from 0
1
2
3
4
5
6
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2009 2010 2011 2012 2013
Capital expenditure and cash flow form operating
activities (EUR million)
Capital expenditure Cash flow from operating activities
2,405
2,273
2,566
2,359
2,499
1,991
2,992
2,356
2,842
3,290
1,000
1,500
2,000
2,500
3,000
3,500
2009 2010 2011 2012 2013
Capital expenditure and cash flow form operating activities
(EUR million)
Capital expenditure Cash flow from operating activities
© The KPI Institute 2015
USABILITY IN TERMS OF VISUAL DESIGN
Source: Adapted from United Stated Census Bureau (2008)
183
Background
1
2
3
4
5
6
65.0%
62.5%
70.0%
66.5%
59.4%
64.8%
62.4%
69.3% 66.5%
59.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
United States Northeast Midwest South West
Homeownership Rates by Region
First quarter 2013 First quarter 2014
65.0% 62.5%
70.0%
66.5%
59.4%
64.8% 62.4%
69.3% 66.5%
59.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
United States Northeast Midwest South West
Homeownership Rates by Region
First quarter 2013 First quarter 2014
65.0%
62.5%
70.0% 66.5%
59.4%64.8%
62.4%
69.3% 66.5%
59.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
United States Northeast Midwest South West
Homeownership Rates by Region
First quarter 2013 First quarter 2014
Strong colors are not
recommended for backgrounds.
Avoid using strong gridlines, as they
hinder visibility of data.
Recommended visual
representation
© The KPI Institute 2015
KPI TOOLKIT SPOTLIGHT: BALANCED SCORECARD
Source: The KPI Institute (2014)
184
© The KPI Institute 2015
IN PRACTICE: SCORECARD
Medicare Australia BSC
Source: Medicare Australia (2009)
185
• The BSC perspectives can be
adapted;
• 6 perspectives identified:
Financial, Services, Internal
Business Processes, Growth and
Development, People, Social and
Environment;
• For more consistency, the target
field should be the last one, not
inserted between actual results.
© The KPI Institute 2015
Imperial College Healthcare, UK
Source: Imperial College Healthcare, UK (n.d.)
186
• Clustering KPIs under relevant
objectives adds structure to the
data provided;
• An additional field that illustrates
previous results enables better
trend analysis and comparison;
• Color codes are used in order to
understand the information in a
more efficient manner.
IN PRACTICE: SCORECARD
© The KPI Institute 2015
NYS Office of
Mental Health
Source: New York State Office of Mental Health (2015)
187
• Current and past target
achievements are
illustrated
• Differentiating between
KPIs and objectives
helps improve the
performance reporting
process
• Standardization provides
a clear segmentation
between KPIs and
objectives
IN PRACTICE: SCORECARD
© The KPI Institute 2015
Alberta Health Services, Canada
Source: Alberta Health Services (2012)
188
• The table is easy
to read;
• The “status”
column provides
useful
information
regarding the
KPIs which
require
immediate
attention;
• Actual results are
compare to
previous results.
IN PRACTICE: SCORECARD
© The KPI Institute 2015
Hospital Medicine Faculty, University of California
Source: University of California (2012)
189
Positive aspects: Targets are clearly stated; the yearly progression of KPIs enables results comparison.
Recommendations: The use of a 2 points scale may be too narrow: green - at and above target; pink - below target;
Other comments: Given the lack of objectives or goals, the scorecard can be regarded as more of an operational tool.
IN PRACTICE: SCORECARD
© The KPI Institute 2015
SCORECARD DESIGN
Checklist:
• Numerical guide (to show if data has been shrink, if this is the
case);
• Legend;
• Eliminate and minimize grids;
• Delineate and group data (strategic themes, perspectives,
objectives);
• Outline status of results ( ≥target, acceptable range,<target);
• Provide essential data (not nice to know information);
• Align characters appropriately;
• Use optimal size font for easy reading.
Source: CLIMB (n.d.)
190
© The KPI Institute 2015
KPI TOOLKIT SPOTLIGHT: DASHBOARD
Source: The KPI Institute (2014)
191
© The KPI Institute 2015
IN PRACTICE: DASHBOARD
South Australia Health
Source: South Australia Health (2013)
192
• Traffic lights point out
areas with problems,
outlining where
actions must be taken.
• Colors used have a
meaning.
• Combines a variety of
visual representations
that are well
positioned in one
page.
© The KPI Institute 2015
IN PRACTICE: DASHBOARD
Source: Department of Health United Kingdom (2013)
193
National Health Services, UK
• No contrast
background, no
strong grids;
• Contrast colors
for line charts to
outline different
data sets;
• Interactive
charts, providing
comprehensive
details for each
set of data.
Data
Visualization
© The KPI Institute 2015
IN PRACTICE: DASHBOARD
Source: Health Authority Abu Dhabi (2012)
194
Health Authority Abu Dhabi - UAE
• Appropriate use
of colors;
• Trends can be
deducted from
the graphs.
• Adding measures
to the X axes
will add clarity
to the
dashboard.
© The KPI Institute 2015
IN PRACTICE: DASHBOARD
Source: Spider Strategies (2015)
195
The KPI Institute, Quickscore - SpiderStrategies
• Background
designed based on
thresholds to
provide instant
understanding of
performance
results;
• Monthly evolution
trends.
© The KPI Institute 2015
KPI TOOLKIT SPOTLIGHT: PERFORMANCE HEALTHOGRAM
196
Source: The KPI
Institute (2014)
© The KPI Institute 2015
1. Data quality dimensions: completeness, validity, accuracy,
consistency, integrity, timeliness.
2. KPI activation tools:
• Data gathering process map;
• KPI documentation form;
• Data gathering template.
3. KPI activation techniques
• Meeting KPI data custodians in person;
• Involving data custodians in a community of practice;
• Sending reminder email.
SESSION REVIEW
197
© The KPI Institute 2015 198
1. Scorecards use tables to visualize data, therefore:
• It keeps tables simple;
• No grids, no strong color combination;
• Clusters data based on strategic themes, perspectives or objectives.
2. Dashboards:
• Bar charts: to compare individual values;
• Bullet graphs: to compare actual results to targets;
• Dial charts: to indicate threshold values;
• Line charts: to track trends;
• Pie charts: to compare different parts of a whole;
• Sparklines: to show trends in a condensed manner.
3. Avoid using:
• 3D graphs: distort data
• Pie and donut charts: inefficient use of space;
• Crowded graphs: data is no longer visible;
• Strong colors for backgrounds: hinder visibility.
SESSION REVIEW
© The KPI Institute 2015
• Adecco Group (2013), Annual report 2013. Available at:
http://annualreport2013.adecco.com/fileadmin/user_upload/redakteure/ar2013/pdf/Adecco_Group_A
R2013.pdf
• Astra Zeneca (2012), Annual report 2011. Available at: http://www.astrazeneca-
annualreports.com/2011/documents/pdfs/annual_report_pdf_entire.pdf
• Centrelink (2010), Annual report 2009-10, available at:
http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual-
report/resources/0910/centrelink-annual-report-0910-full-report.pdf
• Digital Inspiration (2012), Choose the right chart type for your data, available at:
http://www.labnol.org/software/find-right-chart-type-for-your-data/6523/
• Domo (2011), How Fort Worth Police Department uses domo. Available at:
https://www.youtube.com/watch?v=pKbakXit9H4
• Equinox Center (2014), Quality of life dashboard. Available at:
http://www.equinoxcenter.org/assets/files/2014%20Final%20Dashboard%281%29.pdf
• EQAVET (n.d.), Mission. Available at: http://www.eqavet.eu/gns/about-eqavet/mission.aspx
• Fusion Charts (2013), Line & area charts, available at:
http://www.fusioncharts.com/demos/gallery/#line-and-area
• Gartner (2015), CIO Agenda insights. Available at:
http://www.gartner.com/imagesrv/cio/pdf/cio_agenda_insights2015.pdf
• Hichert (2006), Skalen ud deren manipulation, available at:
http://www.hichert.com/downloads/success/check/Skalenmanipulation_2006-11.pdf
REFERENCES
199
© The KPI Institute 2015
• MuRata (2014), Investor relations. Available at:
http://www.murata.com/ir/information/sales_product/index.html
• SA Health (2013), Emergency department dashboard. Available at:
http://www.sahealth.sa.gov.au/wps/wcm/connect/public+content/sa+health+internet/about+us/our+p
erformance/our+hospital+dashboards/about+the+emergency+department+dashboard/emergency+depar
tment+dashboard
• Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-dashboard-
balanced-scorecard-software
• The KPI Institute (2014), KPIs Infographic. Available at: http://store.kpiinstitute.org/key-performance-
indicators-infographic.html
• Tufte, E. (1983), The visual display of quantitative information. Cheshire, CT: Graphics Press
• Tufte, E. (2001), Presenting data and information, One-day course, September 17, 2001. New York
• Unilever (2013), Making sustainable living commonplace, available at:
http://www.unilever.com/images/ir_UNI_10-Year_Charts_2013_030314_tcm13-384260.pdf
• United Stated Census Bureau (2008), Housing vacancies and homeownership, available at:
http://www.census.gov/hhes/www/housing/hvs/qtr407/graph407.html
• United States Government (2014), US Federal Budget Pie. Available at:
http://www.usgovernmentspending.com/federal_budget_pie
• United States Office of Personnel (2012), Annual performance report 2011. Available at:
• World Bank (2014), Data. Available at:
http://data.worldbank.org/indicator/GC.XPN.TOTL.GD.ZS/countries/1W-DE?display=default
REFERENCES
200
© The KPI Institute 2015
Images:
• Alberta Health Services (2012), Performance Report. Available at:
http://www.albertahealthservices.ca/Publications/ahs-pub-pr-2012-03-performance-report.pdf
• Gartner (2015), Magic Quadrant. Available at: http://www.gartner.com/technology/reprints.do?id=1-
2AEDBU3&ct=150223&st=sb
• Health Authority Abu Dhabi (2012), http://www.haad.ae/haad/tabid/1156/Default.aspx?Cat=1
• Medicare Australia (2010), Annual report 2009-10. Available at:
http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual-report/resources/0910/centrelink-
annual-report-0910-full-report.pdf
• New York State Office of Mental Health (2015), Balanced Sorecard. Available at: http://bi.omh.ny.gov/scorecard/view
• Department of Health United Kingdon (2013), NHS Procurement Dashboard. Available at:
• The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• The KPI Institute (2014), Medical Center Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• The KPI Institute (2014), Performance Healthogram. Available at: http://kpiinstitute.org/research/about-performance-
management/performance-healthogram/
• Victoria Government Procurement (n.d.), Supplier performance scorecard. Available at:
http://www.procurement.vic.gov.au/CA2575BA0001417C/WebObj/KPIandSupplierPerformanceScorecardTool(Appendix6)/
$File/KPI%20and%20Supplier%20Performance%20Scorecard%20Tool%20(Appendix%206).XLS
• World Bank (2014), World Bank global scorecard. Available at:
http://siteresources.worldbank.org/CSCARDEXT/Resources/2014_WBG_corporate_scorecard_e-version.pdf
• University of California (2013), Division of Hospital Medicine Faculty Balanced Scorecard FY 2012. Available at:
http://hospitalmedicine.ucsf.edu/bsc/fy2012.html
REFERENCES
201
© The KPI Institute 2015
Scenario
• You are split in teams, with the objective of recalling as many
key concepts as possible, connected to today’s sessions, starting
from the central theme of the crossword game.
Tasks
• The rally race lasts for 3 minutes and team members take turns
to run to the board and write down a key term starting from the
letters provided by the central theme;
• Words can be written as well based on the letters provided by
other team members, both vertically and horizontally.
• The team who generates as many relevant concepts in the
limited timeframe wins the game.
REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS
202
© The KPI Institute 2015
REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS
Example
• Consider the following example to understand how key
concepts can be build around the central theme (SUMMER)
and around other team members ideas.
S U N
H U
O M
L M
I C E C R E A M
D R
A
Y
Working with
Targets
203
© The KPI Institute 2015
REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS
P
E
R
F
O
R
M
A
N
C
E
204
© The KPI Institute 2015 205
10 takeaways to implement in your organization:
1. Connect your KPIs to strategy.
2. Articulate the KPI selection process – apply techniques like
KPI selection workshop, KPI clustering, VFA and KPI
balancing.
3. Avoid measuring what is easy to measure or familiar for the
organization.
4. Use a balanced approached of performance measurement –
Balanced Scorecard.
5. Use both scorecards and dashboards.
COURSE REVIEW
© The KPI Institute 2015 206
10 takeaways to implement in your organization:
6. Cascade the performance measurement framework down to
employee level.
7. Develop the performance measurement capability in the
organization.
8. Involve stakeholders in the KPI implementation project.
9. Avoid making irrelevant comparisons through flawed
benchmarking.
10. Analyze objectives and KPIs in correlation, not as isolated
elements.
COURSE REVIEW
Web:
http://kpiinstitute.org/
http://www.smartkpis.com
http://www.purposefulidentity.com/
http://www.balancedscorecardreview.com
http://www.integratingperformance.com
http://www.performancemagazine.org/
http://elearning.smartkpis.com
Why choose The KPI Institute?
Global expertise in:
• Strategy Management
• Performance Management
• KPIs and analytics
• Business Intelligence
Rigorous research programs
Extensive collections of publications
Comprehensive educational programs
Headquarters
Melbourne Office
Life.lab Building
198 Harbour Esplanade,
Suite 606, Melbourne Docklands,
VIC 3008, Australia
T: +61 3 9028 2223
M: +61 4 2456 8088
office@kpiinstitute.org
Middle East Division
Dubai Office
The Fairmont Dubai
Suite 13 - Office 2103, 21st Floor
Sheikh Zayed Road, POB 119724,
Dubai, UAE
T: +971 4 311 6556
M: +971 5 5787 6427
office@kpiinstitute.org
European Division
Sibiu Office
Sibiu City Center
Somesului Street, No. 3
550003 - Sibiu,
Romania
T: +61 3 9028 2223
M: + 40 7 4706 0997
office@kpiinstitute.org
SE Asia Division
Kuala Lumpur Office
Wisma UOA II
21 Jalan Pinang,
Unit 11-10, 50450
Kuala Lumpur,
Malaysia
M: +60 11 3303 2135
office@kpiinstitute.org

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KPI Course slides

  • 1. © The KPI Institute 2015 KEY PERFORMANCE INDICATORS MASTERCLASS Towards the use of a rigorous KPI Management Framework 11th - 12th of November 2015 | Riyadh | Kingdom of Saudi Arabia 1 Adrian Brudan General Manager TKI - EMEA, The KPI Institute The Fairmont Dubai, 21st floor, Office 2103 – Suite 13 PO Box 119724, Dubai, United Arab Emirates T: +971 4 311 6556 | M: +971 56 427 9177 E: adrian.brudan@kpiinstitute.com | W: www.kpiinstitute.org
  • 2. © The KPI Institute 2015 2 CONTACT DETAILS www.purposefulidentity.com www.balancedscorecardreview.com www.integratingperformance.com Life.lab Building Suite 606, 198 Harbour Esplanade Melbourne Docklands, VIC 3008 Australia office@kpiinstitute.org +61 3 9028 2223 ADDITIONAL RESOURCES KEY RESOURCES
  • 3. © The KPI Institute 2015 3
  • 4. © The KPI Institute 2015 4
  • 5. © The KPI Institute 2015 5 At the core of smartKPIs.com is an online catalogue of over 20,000 KPI examples from 16 business functional areas and 25 industries. An online magazine containing more than 1,000 articles on topics like strategy, Balanced Scorecard, KPI, organizational performance. An online catalogue illustrating the use of corporate identity elements in practice. A platform for integrating performance management knowledge at all levels. The most comprehensive online resource dedicated to the Balanced Scorecard. RESEARCH
  • 6. © The KPI Institute 2015 6 Top KPIs Reports by Functional Area 54 Reports Details at: http://kpiinstitute.org/publications/ Top KPIs Reports by Industry 57 Reports PUBLICATIONS The KPI Dictionaries 3 Books
  • 7. © The KPI Institute 2015 7 Certified Strategy and Business Planning Professional Certified Data Visualization Professional Certified Benchmarking Professional Certified Supplier Performance Professional Certified Customer Service Performance Professional Certified Personal Performance Professional Certified KPI Professional Certified Performance Improvement Professional Certified Employee Performance Professional Certified Data Analysis Professional EDUCATION
  • 8. © The KPI Institute 2015 8 EDUCATION Source: The KPI Institute (2015)
  • 9. © The KPI Institute 2015 9 EDUCATION Source: The KPI Institute (2015)
  • 10. © The KPI Institute 2015 OUR CLIENTS In-house training and advisory services Telecommunications Aviation Chemicals Utilities Public Authority Financial Services 10
  • 11. © The KPI Institute 2015 OUR CLIENTS 11 Open Courses Manufacturing Chemicals Public Authority Aviation Healthcare Financial Services
  • 12. © The KPI Institute 2015 PROFESSIONAL FORMATION Professional Associations CertificationsAcademic Economics | Business Administration | Performance Management 12
  • 13. © The KPI Institute 2015 13 AGENDA 1 DAY 1 DAY 2 Introduction and Context Understanding KPIs KPIs and Objectives Setting KPI Selection KPI Documentation and Target Setting Data Gathering and Visualization 1 2 4 5 6 3 7 Learning Assessment Quiz
  • 14. © The KPI Institute 2015 14 Key learning points Case study Session review Exercise Video References LEGEND
  • 15. © The KPI Institute 2015 LEARNING OBJECTIVES • Differentiate between objectives, KPIs and initiatives; • Apply best practice techniques to KPI selection; • Understand KPI selection in different contexts; • Document KPIs in a standardized template; • Learn when and how to use benchmarking in target setting; • Optimize the KPI activation and data gathering process; • Enhance the use of data through effective data visualization. 15
  • 16. © The KPI Institute 2015 16 AGENDA Introduction and Context 1. Challenges in working with KPIs 2. The value added by KPIs 3. Organizational levels 4. KPI concept map 1. Identify main challenges in performance measurement; 2. Understand the role of business performance measurement systems; 3. Acknowledge 6 arguments to get buy-in for a KPI implementation project. Key Learning Points 1
  • 17. © The KPI Institute 2015 Which are the major challenges: • You are interested in addressing? • Your organization/ team is facing? • Are relevant to the practice overall? CHALLENGES IN WORKING WITH KPIS 17
  • 18. © The KPI Institute 2015 51.26% 14.83% 13.88% 10.09% 9.94% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Selecting the right KPIs Gathering data for KPIs Documenting KPIs clearly and concisely Root cause analysis Decision making based on KPI results What is the most challenging aspect of working with KPIs? CHALLENGES IN WORKING WITH KPIS 18
  • 19. © The KPI Institute 2015 PERFORMANCE MEASUREMENT VS PERFORMANCE MANAGEMENT Performance Measurement = evaluation and assessment of results. 1. Sub-process of performance management 2. Focuses on the identification of KPIs tracking of KPIs communication KPIs results Performance Management = taking action based on the results of the evaluation to ensure targets achieved. 1. The overarching discipline that deals with performance. 2. Reflects the approach one entity has towards performance 3. Includes sub-processes such as: The formulation of a plan Actively monitoring implementation Readjusting the plan Performance measurement Capability development 19
  • 20. © The KPI Institute 2015 THE VALUE ADDED BY KPIS Clarity Improvement Focus Communication 20
  • 21. © The KPI Institute 2015 THE VALUE ADDED BY KPIS CLARITY • Provide a detailed numerical view of which are the desired results aimed to be achieved • Facilitate line of sight by mapping contribution to success across organisational levels FOCUS • Convey what matters • Convey what requires attention IMPROVEMENT • Objectively evaluate the level of achievement of desired results • Readily available data which accelerates corrective action initiation ENGAGEMENT • Lead to a sense of ownership through responsibility and accountability • Motivate in achieving better results • Contribute to building a performance culture COMMUNICATION • Provide common understanding of the numbers that matter • Enables precise stakeholder communication • Demonstrate interest and ability to use state of the art management concepts LEARNING • Enable comparison of results in time, to reflect trends • Identify opportunities by comparing to others • Lead to a better understanding of the business 21
  • 22. © The KPI Institute 2015 MAIN ROLES OF BPM SYSTEMS Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007) 59% 41% 41% 41% 35% 29% 24% 18% 18% 12% 12% 6% 6% 6% 0% 10% 20% 30% 40% 50% 60% 70% 22
  • 23. © The KPI Institute 2015 MAIN FEATURES OF BPM SYSTEMS Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007) 23 53% 35% 29% 24% 12% 12% 12% 12% 0% 10% 20% 30% 40% 50% 60%
  • 24. © The KPI Institute 2015 TERMS & TOOLS LINKED TO “PERFORMANCE” Budgets Communications Dashboards Discussions Forums Goals KPIs Meetings Objectives Performance reviews Plans Projects Reports Rewards Scorecards Targets Technology Training A better structure, alignment, integration and use of what is already in place is the answer to improve performance management practices. 24
  • 25. © The KPI Institute 2015 INTEGRATION OF TOOLS WITHIN A PERFORMANCE MANAGEMENT SYSTEM Source: http://commons.wikimedia.org/wiki/File:Fleischwolf-zerlegt.jpg Photo taken by: Kku, Modified by: Rainer Zenz Organizational and Departmental Level System Map Desired State of Evolution Strategy Map Performance Scorecard Organisational KPI Catalogue Portfolio of Initiatives Dashboard Performance review meetings Individual Level Individual performance plans Performance evaluations Performance conversations Personal Level Personal performance plans Performance reviews 25
  • 26. © The KPI Institute 2015 SYSTEM INTEGRATION ORGANIZATIONAL STRATEGY INTEGRATED PERFORMANCE MANAGEMENT SYSTEM OUTCOMES OUTCOMES 26
  • 27. © The KPI Institute 2015 IDENTIFY PERFORMANCE MANAGEMENT TOOLS 27 Match Description No. Tool 90% 1 Goal # Employees 2 KPI % Patient satisfaction 3 Initiative Patient Engagement Program 4 Metric Deliver the first survey results by 30 July 5 Milestone Develop the patient satisfaction survey 6 Mission Statement Integrity 7 Program Maintain high level of patient satisfaction 8 Objective Opt 1.Provide best talent for the business / Opt 2. Growth for the business 9 Target Quality 10 Task To be the regional destination provider of innovative and complex care, setting the standard in the field. 11 Value Driver Bi-annual patient satisfaction assessment 12 Value Statement To provide medical care services at high quality standards to the citizens of the state. 13 Vision Statement
  • 28. © The KPI Institute 2015 ORGANIZATIONAL LEVELS Team Departmental • Performance expectations aligned to departmental and organizational objectives Employee Organizational • Overall organizational objectives • Departmental (operational) or sub- departmental (team) processes, aligned to organizational strategy 28
  • 29. © The KPI Institute 2015 PERFORMANCE MANAGEMENT SYSTEM ARCHITECTURE SYSTEM INTEGRATION Source: The KPI Institute (2014) 29
  • 30. © The KPI Institute 2015 1. DESIRED STATE OF EVOLUTION Source: The KPI Institute (2014) 30
  • 31. © The KPI Institute 2015 2. STRATEGY MAP Source: The KPI Institute (2014) 31
  • 32. © The KPI Institute 2015 3. PERFORMANCE SCORECARD Source: The KPI Institute (2014) 32
  • 33. © The KPI Institute 2015 4. PERFORMANCE DASHBOARD 33
  • 34. © The KPI Institute 2015 5. KPI DOCUMENTATION FORM Source: The KPI Institute (2014) 34
  • 35. © The KPI Institute 2015 6. KPI REPORT FORM Source: The KPI Institute (2014) 35
  • 36. © The KPI Institute 2015 7. PORTFOLIO OF INITIATIVES Source: The KPI Institute (2014) 36
  • 37. © The KPI Institute 2015 8. INITIATIVE DESCRIPTION FORM Source: The KPI Institute (2014) 37
  • 38. © The KPI Institute 2015 KPI CASCADING 38
  • 39. © The KPI Institute 2015 KPI MANAGEMENT FRAMEWORK CONCEPT MAP 39
  • 40. © The KPI Institute 2015 KPI MEASUREMENT FRAMEWORK GOVERNANCE Top Management Department Department Department Strategy / Performance Office • Promote • Support • Design • Implement • Maintain • Assume ownership of targets • Collect data • Report data 40
  • 41. © The KPI Institute 2015 KPI ARCHITECTURE SKILLS Research Analysis Synthesis Software MS PPT MS XLS Strategy Data visualization Performance Measurement Architecture Coaching Communication Facilitation Technology Interpersonal Performance Management Data 41
  • 42. © The KPI Institute 2015 1. Most common challenge: KPI selection 2. Why use KPIs? • Clarity • Focus • Improvement • Engagement • Communication • Learning SESSION REVIEW 42
  • 43. © The KPI Institute 2015 • Franco-Santos, M., Kennerley, M., Micheli, P., Martinez, V., Mason, S., Marr, B., Gray, D. and Neely, A. (2007), Towards a definition of a business performance measurement system, International Journal of Operations and Production Management, 27(8): 784-801. Available at: https://dspace.lib.cranfield.ac.uk/bitstream/1826/2789/1/Towards%20a%20definition%20of%20busines s%20performance%20measurement%20system.pdf Images: • The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at: http://store.kpiinstitute.org/hr-performance-management-system-toolkit.html REFERENCES 43
  • 44. © The KPI Institute 2015 44 AGENDA Key Learning Points 2 Understanding KPIs 1. KPI related terminology 2. KPIs use case scenarios 3. KPI lifecycle 1. Define objectives, KPIs and initiatives according to terminology standards; 2. Identify the KPI lifecycle stages.
  • 45. © The KPI Institute 2015 KPI RELATED TERMINOLOGY • Key Result Areas (KRAs); • Key Performance Indicators (KPIs); • Performance Indicators (PIs); • Measures; • Metrics; • Key Result Indicators (KRIs); • Analytics; • Evaluation criteria. OPTION 2 KRAs KPIs PIs Measures Metrics – to inform decisions KPIs – to evaluate performance OPTION 1 45
  • 46. © The KPI Institute 2015 METRICS – KPIS- KRIS - ANALYTICS Decision Making Performance Assessment KPIs Risk Assessment KRIs Measurement Metrics Analytics 46
  • 47. © The KPI Institute 2015 METRICS 47 # Air temperature # Air humidity # Air purity # Square meters per room # Employees # Highway kilometres # Employee age # Working hours per year $ Budget
  • 48. © The KPI Institute 2015 KEY PERFORMANCE INDICATORS Source: Spider Strategies (2015) % Net promoter score % Budget variance % Hospital bed occupancy rate $ Revenues $ Operating costs # Patient consultation time # Caseload per physician 48
  • 49. © The KPI Institute 2015 KEY RISK INDICATORS • Key risk indicators are metrics used by organizations to provide an early signal of increasing risk exposures in various areas of the enterprise. Objective: Manage the collection of accounts receivable to reduce loss due to write-offs Key Performance Indicator (KPI) Key Risk Indicator (KRI) Data about write-offs of accounts in most recent month, quarter, year. Analysis of reported financial results for the company’s 25 largest customers or general collection challenges throughout the industry that highlight trends signaling future collection concerns. $ Write-offs of accounts % Large customers in financial difficulty Linking Objectives to Strategies to Risks to KRI’s Profitability Increase Revenues Reduce Costs Strategic Initiative #1 Strategic Initiative #2 Strategic Initiative #3 Strategic Initiative #4 Potential Risk Potential Risk Potential Risk Potential Risk KRI KRI KRI KRI Potential Risk KRI KPI KPI KPI KPI Source: Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010) 49
  • 50. © The KPI Institute 2015 ANALYTICS Source: Google (2015) Refers to extracting key information from large volumes of data in order to: • predict future trends • identify patterns Support decision making 50
  • 51. © The KPI Institute 2015 1. % Employee satisfaction 2. $ Turnover 3. Finalise project by 31 December 4. # Patients from referrals 5. # Employees 6. % Projects delivered on time and on budget 7. Quality 8. % Hospital bed occupancy rate 9. $ Budget 10. Increase market share to 28% IDENTIFY THE KPIS KPI Definition: A measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity. (The KPI Institute) 51
  • 52. © The KPI Institute 2015 TERMINOLOGY STANDARDS Objectives start with Verb KPIs start with $ = Value of # = Number of % = Percentage of Initiatives start with Noun Increase customer satisfaction $ Revenue per client CRM software implementation # Complaints received % Customer satisfaction 52
  • 53. © The KPI Institute 2015 “Corporate Goal 1 – To obtain profit before interest, taxes, depreciation and amortization (EBITDA) ≥ B/.1,110 million up to September 30, 2009. Corporate Goal 2 – To establish a new pricing structure up to September 30, 2009 depending on the phases established in the work plan. Corporate Goal 3 – To provide a preliminary report of the Technical Cooperation Project up to September 30, 2009. Corporate Goal 4 – To implement planned activities for the Third Set of Locks Project up to September 30, 2009, in compliance with the milestones of the established schedule. Corporate Goal 5 – To make optimal use of the existing plant to meet transit demands, ensuring a service level compliance average ≥ 85 percent.” “Corporate Goal 6 - To adapt the organization through the improvement of the processes identified up to September 30, 2009. Source: Panama Canal Authority (2009) ANALYZE PANAMA CANAL AUTHORITY CORPORATE GOALS 2009 53
  • 54. © The KPI Institute 2015 Corporate Goal 7 – To implement 100.0 percent the activities of the Sustainability and Corporate Social Responsibility Action Plan scheduled for fiscal year 2009. Corporate Goal 8 – To develop the Monitoring and Evaluation Plan for Sustainable Development and Integrated Management of Water Resources for the Panama Canal Watershed up to September 30, 2009. Corporate Goal 9 – To prepare a talent management plan and to provide a generational shift and to meet emerging needs in the operation up to September 30, 2009. Corporate Goal 10 – To improve the working environment ≥ 5.0 percent, measured by a satisfaction, commitment and work climate survey up to September 30, 2009. Corporate Goal 11 – To ensure that the Corporate Performance Index (CDI) is ≥ 100, up to September 30, 2009.” ANALYZE PANAMA CANAL AUTHORITY CORPORATE GOALS 2009 Source: Panama Canal Authority (2009) 54
  • 55. © The KPI Institute 2015 Positive examples: “Objective 1 - To increase profitability in a sustainable manner for the benefit of the country. Objective 2 - To expand the range of services and products. Objective 3 - To enhance good corporate governance. Objective 4 - To efficiently manage the volume and quality of the water resources of the Panama Canal Watershed. Objective 5 - To increase productivity through excellence in performance and the wellbeing of human resources” Source: Panama Canal Authority (2013) ANALYZE PANAMA CANAL AUTHORITY CORPORATE GOALS 2013 55
  • 56. © The KPI Institute 2015 INTERDISCIPLINARY SYSTEMIC WORLDVIEW 56
  • 57. © The KPI Institute 2015 KPI USE CASE SCENARIOS Strategy Management 1 Organizational strategy 2 Organizational operations tracking 3 Departmental strategy 4 Departmental operations tracking Interlink Level 5 Alliances / Joint ventures relationship scorecard 6 Portfolio management 7 Project management Operations Management 8 Quality / process management 9 Service level agreements 10 Supplier performance management Individual Performance 11 Employee performance management Personal Performance 12 Fitness training 13 Personal performance management Evaluation 14 Sustainability performance reporting 15 Benefits realization management 16 General strategic / operations reporting 17 Audit 18 Compliance reporting (micro and macroeconomic level) 57
  • 58. © The KPI Institute 2015 1. ORGANIZATIONAL STRATEGY 58 Context: Scorecards to monitor the achievement of strategy, through KPIs. Positive aspects: KPIs are monitored in 5 perspectives: Financial, Customer, Operations and People. Traffic lights are used to enable immediate understanding of performance data. Recommendations: Link KPIs to more specific strategic objectives, not only to goals. Comments: The scorecard contain some of the most important fields to track performance.
  • 59. © The KPI Institute 2015 2. ORGANIZATIONAL OPERATIONS STRATEGY Source: KPI Institute (2014) 59 Context: Dashboards to provide a more detailed overview of corporate performance.
  • 60. © The KPI Institute 2015 3. DEPARTMENTAL STRATEGY Source: KPI Institute (2014) 60 Context: Scorecards to monitor strategy at operational level.
  • 61. © The KPI Institute 2015 4. DEPARTMENTAL OPERATIONS TRACKING Source: Godrejinfotech.com (2010) 61 Context: Dashboards to offer visibility into key processes. Positive aspects: KPIs are visualized in both tables and graphs with the purpose to enhance data meaning. Recommendations: Cluster KPIs around key processes or activities. Comments: The interactivity of the dashboard enables managers to access different data sets with ease, supporting timely decision making.
  • 62. © The KPI Institute 2015 5. ALLIANCES / JOINT VENTURES RELATIONSHIP SCORECARD 62 Context: Scorecards to monitor performance of alliances or other business partnerships. Positive aspects: KPIs are linked to clear objectives established for the alliance. Recommendations: Standardize KPI names and allocate a section to comment KPI results. Comments: Key value drivers for the alliance were identified, such as relationship value or strength that cluster the scorecard objectives and help managers focus on what matters the most.
  • 63. © The KPI Institute 2015 6. PORTFOLIO AND PROJECT MANAGEMENT 63 Context: KPIs to monitor the performances in terms of managing more projects. Positive aspects: KPI results are displayed through graphs, in the format of a dashboard. Recommendations: Replace pie charts, with more effective data visualization tools; Comments: Dashboards are very useful in managing a portfolio of projects as they provide key information in order to ensure initiatives are finalized on time, within budget and resources are used efficiently.
  • 64. © The KPI Institute 2015 7. PROJECT MANAGEMENT Source: SmartKPIs.com (2015) 64
  • 65. © The KPI Institute 2015 8. QUALITY / PROCESS MANAGEMENT Source: Adapted from Oak Ride Institute for Science and Education (2005) 65 Context: KPIs to measure quality and compliance with standards, as well as to support process optimization. Positive aspects: Process mapping is used to standardize activities and to support process optimization. Recommendations: Establish KPIs to assess the quality of processes.
  • 66. © The KPI Institute 2015 8. QUALITY / PROCESS MANAGEMENT Process improvement Work Time (value add) Before After Wait Time (non value add) Cost Defects Lead time Inventory Space Waste! Capacity Cash flow Customer satisfaction Customer responsiveness On time delivery Productivity Profit Quality 66
  • 67. © The KPI Institute 2015 9. SERVICE LEVEL AGREEMENT (SLA) Source: Texas State University (n.d) 67 Context: KPIs to ensure the quality of services delivered – whether is about third party providers (suppliers) or internal providers (departments, divisions). Positive aspects: Clear targets are established for each performance measure. Recommendations: Standardize KPI names for more clarity. Comments: Internal SLAs can be used for both internal and external providers.
  • 68. © The KPI Institute 2015 10. SUPPLIER PERFORMANCE MANAGEMENT Compliance with client requirements Quality and severity of defects The objectives of the engagement were achieved Timely delivery schedule Ability to meet interim milestones Ability to complete work within agreed upon budget Ability to control costs / Cost improvements over time Value for money / Competitiveness of pricing Provides effective and timely communication Service and product delivery problems were quickly resolved Documentation requirements / Understanding of business requirements Innovative in helping delivering solutions Understanding of the client’s business processes and practices Understanding of the industry and market and how it applies to VG Technical skills and experience Personnel quality (i.e. independence and thoroughness) Overall project management Reasonable negotiations and contract, ease of doing business Effective, accurate and efficient billing system Flexible, accessible and responsive to inquiries Overall satisfaction with vendor deliverables and services Professional and cooperative behaviour with the client personnel Work ethic, flexibility and responsiveness c) 24 Indicatorsb) 8 Categoriesa) 3 Perspectives Outcomes Schedule Budget Communication Value add/Innovation Delivery capability Responsiveness / Account Management Client satisfaction Outcome performance Delivery performance Service excellence 68 Context: KPIs to monitor performance of supplier, for a streamlined supply chain.
  • 69. © The KPI Institute 2015 11. EMPLOYEE PERFORMANCE MANAGEMENT Source: KPI Institute (2015) 69 Context: KPIs and scorecards to evaluate performance of each employee in the organization.
  • 70. © The KPI Institute 2015 12. FITNESS TRAINING Source: Body Media Fit (2015) 70 Context: KPIs to track performance of athletes. Positive aspects: The dashboard allows target setting for KPIs and enables you to visualize progress in time. Comments: A clear perspective on current fitness performance contributes to better planning workouts.
  • 71. © The KPI Institute 2015 13. PERSONAL MANAGEMENT 71 Source: Felton, N. (2013), Annual report Positive aspects: It provides an instant overview upon the performance achieved in several personal areas. Recommendations: Structure the KPIs under objectives and assign specific targets that need to be attained. Comments: Common personal areas to be monitored are finances, household management, professional development, time management, social activity – interactions with friends and family. Context: KPIs to monitor personal achievements, to track daily activities, to improve time management.
  • 72. © The KPI Institute 2015 14. SUSTAINABILITY PERFORMANCE REPORTING Source: Apple (2011) KP Taxonomy 72 Comments: Transparency in KPI results can positively contribute to brand image. Context: KPIs to assess the environmental impact of activities. Results are presented in sustainability scorecards or in dedicated performance reports. Positive aspects: there is a trend in representing performance data in annual reports through infographics. Recommendations: Structure the KPIs under sustainability objectives and outline specific targets that are desired.
  • 73. © The KPI Institute 2015 15. BENEFITS REALIZATION MANAGEMENT Source: Western Australia Department of Treasury and Finance (2005) 73 Positive aspects: KPIs are accompanied by target values. Recommendations: KPI names should be standardized. Comments: benefits realization management through KPIs provides the necessary visibility in assessing investment projects. Context: Benefits realization is an important part of project management and should rely on KPIs that clearly outline expected benefits.
  • 74. © The KPI Institute 2015 16. GENERAL OPERATIONAL REPORTING Source: Clebsch, B., Dougherty, J. D., and Anderson, G. (2004) 74 Recommendations: Structure the KPIs under sustainability objectives and outline specific targets that are desired. Comments: Operational reporting must be focused on providing essential data for decision making. Context: KPIs are commonly used by departments or teams to report the performance of their activities. Positive aspects: KPI results are accompanied by comments to facilitate understanding of current performance level.
  • 75. © The KPI Institute 2015 17. AUDIT Source: Australian National Audit Office (2011) 75 • The checklist from the example is used to evaluates the KPIs used by a set of organizations to track if their projects deliver the expected outputs. Context: KPIs can be used to assess the quality of the audit department, but also to analyze how an organization is coordinated. • The audit aims to identify the mix between qualitative and quantitative KPIs and whether they had clear targets assigned.
  • 76. © The KPI Institute 2015 18. COMPLIANCE REPORTING Source: Ontario Buys (2010) 76 Positive aspects: KPIs are clustered on different perspectives. Recommendations: KPI names should be standardized. Comments: Reporting to governmental institution can also serve for organizations as a benchmarking technique if results are published. Context: KPIs are commonly used to report compliance with regulations.
  • 77. © The KPI Institute 2015 KPI LIFECYCLE KPI lifecycle – Stage 1 Establishment KPI lifecycle – Stage 2 Use KPI lifecycle – Stage 3 Evolution •Needs identification •Selection •Documentation •Visualization •Activation •Analysis •Reporting •Decision making •Communication •Documentation refresh •Data gathering •Analysis •Reporting •Decision making •Communication •Documentation refresh • Maintain • Refresh • Conserve/Suspend • Supercede 77
  • 78. © The KPI Institute 2015 1. KPI definition: a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity. 2. Terminology standards: • Objectives - Verb • KPIs - Symbols (#, %, $) • Initiatives - Noun. 3. KPI lifecycle: • Establishment • Use • Evolution SESSION REVIEW Understand KPIs 78
  • 79. © The KPI Institute 2015 • Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010.), Developing Key Risk Indicators to strengthen enterprise risk management: How Key Risk Indicators can sharpen focus on emerging risks. Available at: http://www.coso.org/documents/COSOKRIPaperFull- FINALforWebPostingDec110_000.pdf • Panama Canal Authority (2009), Annual report. Available at: http://www.pancanal.com/eng/general/reporte-anual/ • Panama Canal Authority (2013), Annual report. Available at: http://www.pancanal.com/eng/general/reporte-anual/ Images: • Google (2015), Google Analytics. Available at: http://www.google.com/analytics/ • Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi- dashboard-balanced-scorecard-software/ REFERENCES 79
  • 80. © The KPI Institute 2015 80 AGENDA Key Learning Points 3 KPIs and Objectives Setting 1. SMART objectives decomposed 2. Leading vs lagging KPIs 1. Formulate SMART objectives 2. Differentiate leading and lagging KPIs in different contexts;
  • 81. © The KPI Institute 2015 SMART OBJECTIVES DECOMPOSED Objective KPI Target Time Owner 2 • Increase market share • % Market share • By financial year end • 28% • Marketing Director Option 1: Increase market share to 28% by the end of the financial year under Marketing Director coordination. Option 2: 81
  • 82. © The KPI Institute 2015 OBJECTIVES SETTING 2 82 Value drivers Objective KPIsMission Vision Corporate values Initiatives
  • 83. © The KPI Institute 2015 LEADING VS LAGGING KPIS Source: International Association of Oil & Gas Producer (2011) International Customer Management Institute (n.d) Leading indicators = measure things that address what can create future value Lagging indicators = look back at past performance Vs. • “outcomes, forward-looking indicators” Advantage: • Being predictive allows the organization to take better decisions to address future events. Challenge: • May be difficult to identify and capture results. • “measures events / incidents and consequences, retrospective” Advantage: • Easy to identify and to measure / collect results. Challenge: • Indicates past performance, does not reflect current activities. 83
  • 84. © The KPI Institute 2015 Task: • Cluster the following examples into leading and lagging KPIs. LEADING VS LAGGING KPIS No. KPI examples 1 % Employee engagement 2 % Patients from referrals 3 % Patients satisfaction 4 % Market share 5 $ Profit 6 # Medical service lead time 7 % Staff with competencies at desired level 84
  • 85. © The KPI Institute 2015 1. SMART objectives: Objective – KPI – Target – Time - Owner 2. Leading or lagging ? – depends on the context SESSION REVIEW 85
  • 86. © The KPI Institute 2015 • Australian Federal Government (2011), Department of Climate Change and Energy Efficiency annual report 2010–11. Available at: http://www.climatechange.gov.au/about-us/annual-reports/annual- report-2010-11 • Australian National Audit Office (1998), Better practice principles for performance information, available at: http://www.anao.gov.au/Publications/Better-Practice-Guides • Charted Accountants Professionals Canada (2010), Performance indicators. Available at: http://www.camagazine.com/archives/print-edition/2010/march/regulars/camagazine34812.aspx • International Association of Oil & Gas Producer (2011), Process safety – recommended practice on Key Performance Indicators. Available at: http://www.ogp.org.uk/pubs/456.pdf • International Customer Management Institute (n.d.), Leading and Lagging Indicators. Available at: http://www.icmi.com/files/ICMILeading_LaggingIndicatorsExplained.pdf • Public Record Office Victoria, Australia (2010), Strategic management guidelines: Key Performance Indicators. Available at: http://prov.vic.gov.au/wp-content/uploads/2011/05/1010g3.pdf • WACOSS (2011), Qualitative vs. quantitative data collection. Available at: http://www.wacoss.org.au/CommunitySectorFundingReform/Resources/Fundingreformconsidering/ QualitativeQuantitative.aspx • Western Australia Police (2005), General Audit. Available at: http://www.police.wa.gov.au/LinkClick.aspx?link=PDFs/AR05_Performance.pdf&tabid=935 REFERENCES 86
  • 87. © The KPI Institute 2015 REVIEW DAY 1 – CROSSWORD Scenario • You are split in teams, with the objective of finding out the crosswords from the next slide. Tasks • Identify the 10 words hidden behind letters from the next slide; • All words connect to the previous day key concepts. 87
  • 88. © The KPI Institute 2015 REVIEW DAY 1 – CROSSWORD A S L E A D I N G E T G G V D E R A C K B E K K G Q T I L O S Z Q L I N D E C Q B C Q P P M K Q E D A F O B J E C T I V E I A Q D M H R O I L R D Y C A B O N A S O A R S N B B M D F N Q A S C V B I S Q E Y P V B N M L Q H C G I L A A A L L H U J S C W B H O A A S S G T Y S T N O L E Z C A X S C K D X E N I C D V B M D P E R F O R M A N C E U I I F C R M K O C V B K A U V E X S W E D X R T Y U N L D V J M D A N M I O I I E V R Y T E O E G H J D O Q E R T Y U I O P C Y N R E W Q R A S W V E R I U D A S H B O A R D R N N R T C Y I Z X I V B N C T A S C V B N M J H K D I X A A A C G H E K L O A R I U Y T R E W Q S D G T J L F L F J H W F D S T E A S C O R E C A R D I I P O C E T S R T D N G O W C M N B V C U P O L U A T R A Q Y E L H G F S R Q Q W E R T Y U I O P K T H L A G G I N G E S S D D G F L A G G I N G W U I O P E L T J H G F D S A F A S D F G L H Q A Z E V W C R V B N H G F D E W G V B N M P L O I U Y R E W Q U W L I X A T I Z E H 88
  • 89. © The KPI Institute 2015 • Apple (2011), Environmental responsibility. Available at: http://www.apple.com/environment/ • Australian National Audit Office (2011), Development and implementation of Key Performance Indicators to support the outcomes and programs framework. Available at: http://www.anao.gov.au/~/media/Uploads/Audit%20Reports/2011%2012/201112%20Audit%20Report%20 No%205.pdf • Body Media Fit (2015), Activity Manager. Available at: http://www.bodymedia.com/?whence= • Clebsch, B., Dougherty, J. D., and Anderson, G. (2004), Management by fact: Benchmarking university IT services. Available at: http://www.educause.edu/ero/article/management-fact-benchmarking- university-it-services • Felton, N. (2013), Annual report. Available at http://feltron.com/FAR13_11.html • Godrejinfotech.com (2010), Products. Available at: http://www.godrejinfotech.com/godrej/godrejinfotech/offerings/products/sap/pro_sap_busiObj.html • KPI Institute (2014), Human Resources Performance Management Toolkit. Available at: http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html • KPI Institute (2015), Individual Performance Management Toolkit. Available at: http://store.kpiinstitute.org/individual-performance-management-toolkit.html • Oak Ride Institute for Science and Education (2005), Performance measurement process. Available at: http://www.orau.gov/pbm/handbook/1-1.pdf • Texas State University (n.d.), Global service level objectives. Available at: http://www.tr.txstate.edu/ser-cat/sc-object.html • Western Australia Department of Treasury and Finance (2005), 2004-05 Procurement Reform benefits realisation report REFERENCES 89
  • 90. © The KPI Institute 2015 90 AGENDA Key Learning Points 4 KPI Selection 1. KPI selection in practice 2. KPI selection sources 3. KPI selection techniques 4. KPI selection criteria 1. Design a well structured KPI selection process; 2. Recognize useful KPI selection sources; 3. Deploy KPI selection techniques.
  • 91. © The KPI Institute 2015 ALLOCATE KPIS FOR EACH OBJECTIVE Financial Increase profitability Maintain financial discipline Customer Maintain high levels of patient satisfaction Expand medical service reach Internal Processes Optimize facilities management Improve patient waiting times People, Learning & Growth Nurture engagement, creativity and innovation Develop workforce skills and competences Ensure talent availability No. KPIs list 1 $ Operating expenses 2 % Employees meeting professional development requirements 3 # Complaints from customers 4 # New patients 5 % Budget variance 6 # Innovation ideas 7 # Employee engagement index 8 # Training hours per full time equivalent (FTE) 9 % Market share 10 % Net profit margin 11 # Patient wait time 12 $ Net cash flow 13 % Hospital bed occupancy rate 14 # Positions filled 15 % Customer satisfaction 16 # Available beds 17 % Critical positions with succession plans in place 18 % Patients seen by the doctor within SLA 91
  • 92. © The KPI Institute 2015 KPI SELECTION PROCESS AND TEHNIQUES 1 2 3 2 Scope clarifications KPI expo KPI clustering Prepare for KPI selection Facilitate the KPI selection KPI selection workshop Relevant questions framing Value flow analysis KPI balancing KPI documentation First performance review meeting Follow up on KPI selection 1 2 3 92
  • 93. © The KPI Institute 2015 SCOPE CLARIFICATIONS 1 2 3 WHAT Defining what needs to be measured: WHY Channels the selection process on a clear path with specified scope and outputs expected. Objectives Processes Scorecard Dashboard 93
  • 94. © The KPI Institute 2015 KPI SELECTION SOURCES Workshop 1 2 3 KPI Sources External lists Management Board Industry standards Benchmarking Competitors Historical data Workshop Compliance 94
  • 95. © The KPI Institute 2015 KPI SELECTION SOURCES 1 2 3 SECONDARY INTERNAL EXTERNAL PRIMARY • Strategic development plan (3-5 years) • Annual business / strategic plan • Annual reports • Internal operational reports • Competitor review reports • Printed catalogues • Online catalogues (http://www.smartkpis.com/) • Annual reports of other organizations (KPIs in Practice) • Front-line employees input • Managers input • Board input • Suppliers input • Customers input • Expert advice • Questions in discussion forums 95
  • 96. © The KPI Institute 2015 KPI EXPO 1 2 3 WHAT • Collection, curation and presentation of relevant KPI examples. WHY HOW • Consolidating lists from external sources, like smartKPIs.com. • Using internal sources to identify KPIs, like operational reports. Informs Educates Inspires 96
  • 97. © The KPI Institute 2015 KPI CLUSTERING WHAT Grouping KPIs in different categories: • Balanced Scorecard perspectives; • Objectives; • Dashboard sections; • Value Flow Analysis stages; • Process steps. WHY • Enables alignment and identification of possible gaps. 1 2 3 97
  • 98. © The KPI Institute 2015 KPI CLUSTERING 1 Scenario: • You are part of the management team operating in the healthcare industry. • The board asks you to present 5 KPIs you will be using to track the performance of the organization. Task: • Write down 5 KPIs you would recommend. • Use one single post-it note for each KPI (5 post-it notes per team). 1 2 3 98
  • 99. © The KPI Institute 2015 RELEVANT QUESTIONS FRAMING 1 2 3 WHY? • Focus on the importance and relevancy of context Examples: • What numbers will demonstrate the objectives achievement? • What process are we going through and how long will it take? • What will we learn from the data? • What matters? • So what? 99
  • 100. © The KPI Institute 2015 RELEVANT QUESTIONS FRAMING 4 FAQs During the KPI selection workshop Questions to prepare in case they are asked What are the most relevant sources for KPI selection? How many KPIs should we select? What will we do with KPI results? What is the order of importance in which the KPI selection sources should be analyzed? What is the procedure for validating the KPIs selected? What efforts are required for data gathering for each KPI? Who should participate in the KPI selection process? What process are we going through and how long will it take? What will we learn from the data? What is the ideal format for KPI selection process? What figures will reflect the achievement of company objectives? How do we link KPI results with bonuses? What are the most relevant criteria for the KPI selection? What sort of data we need to keep track of to ensure informed decision making? What are we trying to achieve by setting up KPIs? What matters? 1 2 3 100
  • 101. © The KPI Institute 2015 VALUE FLOW ANALYSIS WHAT? • Logical model to indicate the value generation from inputs, process outputs and outcomes. WHY? • Gain insight into how the objective can be measured from different perspectives. • Provides an overview of the process involved by achieving the objective. • Enables the selection of the most relevant KPIs for the objective. 1 2 3 101
  • 102. © The KPI Institute 2015 VALUE FLOW ANALYSIS Optimize inpatient inflows % Bed occupancy rate % Bed turnover $ Operating costs $ Revenue per bed INPUTS PROCESSES OUTPUTS OUTCOMESOBJECTIVES # Medical staff available # Hospital beds # Patients discharged per day # Length of stay 102
  • 103. © The KPI Institute 2015 INPUT METRICS • Measure the quantity/quality of input resources to organizational activities. • Generally include: human resources, financial resources infrastructure. • Examples:  Human Resources: # Employees, # Physicians, # Clinical trial implementation team  Financial Resources: $ Budget, # Grants, $ Bank loans  Infrastructure: # Medical equipment available, # Length of stay Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334 INPUTS PROCESSES OUTPUTS OUTCOMES 103
  • 104. © The KPI Institute 2015 PROCESS METRICS • Measure the quantity/quality of the activities required to provide certain expected outputs. • Generally include: transformation in terms of time and utilization rates. • Examples:  Time: % On-time delivery vaccination, # Time to finalize task  Utilization: % Equipment utilization rate, # Ambulance response time Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334 INPUTS PROCESSES OUTPUTS OUTCOMES 104
  • 105. © The KPI Institute 2015 OUTPUT METRICS • Measure the quantity/quality of the goods or services created or provided through the use of inputs; • They generally include quantifiable results. • Examples:  # Patients vaccinated  # Treatments delivered  # Surgeries performed  # Examinations completed Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334 INPUTS PROCESSES OUTPUTS OUTCOMES 105
  • 106. © The KPI Institute 2015 OUTCOME / IMPACT METRICS • Measure the quantity/quality of the results achieved through the provision of goods and services. • They generally include: added value, impact. • Examples:  Impact: % Incidence of disease, % Mortality rate  Added value: $ Savings generated by innovation ideas, # Patient satisfaction index, % Net promoter score Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334 INPUTS PROCESSES OUTPUTS OUTCOMES 106
  • 107. © The KPI Institute 2015 VALUE FLOW ANALYSIS Objective INPUT PROCESS OUTPUT OUTCOMES Ensure population immunization $ Budget # Doctors % On time delivery of vaccination programs # Population vaccinated % Incidence of disease % Mortality rate Maintain high compliance levels with regulations $ Budget # Audit team # Time to complete an internal audit # Non- compliances found % Compliance rate with regulations Provide effective emergency services $ Budget # Ambulances # ER medical staff available # Time to reach an emergency call % Patients seen in < 15 minutes after requesting help % Mortality rate on emergency calls 107
  • 108. © The KPI Institute 2015 1 # Innovation champions in each area 4 # Staff in the innovation program team 7 $ Value generated by innovation ideas 10 % Innovation ideas funded 2 # Innovation focus groups 5 # Time to evaluate an idea 8 % Ideas evaluated within the SLA target of 2 weeks 11 % Innovation ideas implemented 3 # Patents 6 $ Budget 9 % Innovation ideas evaluated 12 % Innovation ideas that generated value Objective: Operate in an environment that fosters creativity and innovation VALUE FLOW ANALYSIS Input Process Output Outcome 1 2 3 108
  • 109. © The KPI Institute 2015 VALUE FLOW ANALYSIS Scenario: • Select one objective of your choice. Tasks: • Write at least 2 input, 2 process, 2 output and 2 outcome metrics. • Select from these metrics 2-3 KPIs to measure the achievement of the objective. • Propose 1-2 initiatives to address the implementation of the objectives. 1 2 3 109
  • 110. © The KPI Institute 2015 KPI BALANCING WHAT • Quality assurance technique consisting in selecting at least 2 KPIs for the same objective. WHY? • To avoid focusing on certain KPIs at the expense of others. • To provide a wider perspective upon actual performance. 1 2 3 110
  • 111. © The KPI Institute 2015 Write the correct KPI number under each objective, in order to assure a balanced approach. KPI BALANCING 6 FAs Objectives No. KPIs Ambulance services A. Provide timely ambulatory services 1 # Surgeries conducted 2 # Flue cases 3 % Diagnosis accuracy Surgery services B. Ensure reliable surgery services 4 # Ambulances available 5 # Discharges per day 6 # Time to conduct a laboratory test Facilities management C. Optimize inpatient flow 7 % Unplanned readmission rate 8 % Population vaccinated 9 % Ambulance reaching patients within SLA Medical laboratory D. Provide timely and accurate diagnosis 10 % Post surgery infections Preventive healthcare E. Increase the citizens immunity 1 2 3 111
  • 112. © The KPI Institute 2015 KPI BALANCING Leading Lagging # Incidents of non-compliance # Fatal accidents # Training hours per FTE % Employees with competencies at desired level Efficiency Effectiveness $ New customers acquisition cost # New customers # Call duration % First call resolution rate Quantity Quality # Maintenance requests resolved % Maintenance requests resolved within SLA # Ideas expressed % Ideas implemented Subjectivity Objectivity # Patient satisfaction # Patient complaints received % Net promoter score # Clients from referrals 1 2 3 112
  • 113. © The KPI Institute 2015 Source: Heinrich, H.W. (1931) 4 KPI BALANCING 1 2 3 113
  • 114. © The KPI Institute 2015 KPI SELECTION WORKSHOP 1 2 3 WHY • Collective intelligence insights • Learning • Buy-in WHO • Clients • Suppliers • Employees • Board • Management • Facilitators 114
  • 115. © The KPI Institute 2015 KPI SELECTION WORKSHOP 1 2 3 Agenda Topics Context (60 minutes) 5 Agenda and meeting scope review 5 Needs review 10 Terminology and KPI format clarification 20 Selection process and tool review 20 Sample Value Flow Analysis (VFA) as a model Selection activities (140 minutes) 60 Interactive VFA team exercises 60 Consolidation of KPI wall 20 List revision based on filtering criteria Review and closing (40 minutes) 20 Review of draft 10 Answering questions 10 Clarifying next steps 240 minutes 115
  • 116. © The KPI Institute 2015 FOLLOW UP ON KPI SELECTION 1 2 3 KPI documentation • KPI measurement limitations • Cost benefit analysis First performance review meeting • Review and reconsider some KPIs that may prove inefficient to measure and report in practice. 116
  • 117. © The KPI Institute 2015 KPI SELECTION CRITERIA Performance criteria found in practice: • Attainable • Complete • Direct • Incentivized • Practical • Reliable • Specific • Tested • Time bound • Useful for management Relevant Clearly defined Balanced Performance criteria recommended: 117
  • 118. © The KPI Institute 2015 1. KPI selection sources: internal and external, primary and secondary. 2. Main KPI selection techniques: • KPI expo; • KPI clustering; • Value Flow Analysis; • KPI balancing; • KPI selection workshop. 3. KPI selection criteria: clearly defined, balanced, relevant. SESSION REVIEW 118
  • 119. © The KPI Institute 2015 • SmartKPIs.com (2015), KPI examples. Available at: http://www.smartkpis.com/kpi_examples/dashboard/ • Heinrich, H.W. (1931), Industrial accident prevention: A scientific approach. Available at: http://www.worldcat.org/title/industrial-accident-prevention-a-scientific-approach/oclc/3493629 REFERENCES 119
  • 120. © The KPI Institute 2015 120 AGENDA Key Learning Points 5 KPI Documentation and Target Setting 1. KPI documentation form design and functions 2. KPI documentation process 3. Target setting approaches 1. Design a KPI documentation form; 2. Identify sources of information to document a KPI; 3. Set relevant targets by using a variety of information sources.
  • 121. © The KPI Institute 2015 KPI DOCUMENTATION FORM FUNCTIONS Ensure understanding of KPI measurement Facilitates communication through standardisation Activation prerequisite Automation enabler Knowledge management Educates stakeholders (KPI owners, data custodians) Contributes to buy-in by involving the stakeholders 121
  • 122. © The KPI Institute 2015 KPI DOCUMENTATION WHAT • Identify metadata fields • Fill in the required fields for each KPI WHY • Simplify communication • Alignment • “Setting the rules” HOW • Standardized KPI documentation form Benefits of the organizational KPI Library • Top performers are 53% more likely than the industry average to maintain a library of KPI examples and 39% promote the use of performance management to their employees. Source: SmartKPIs.com (2015) Source: Aberdeen (2011) 122
  • 123. © The KPI Institute 2015 KPI DOCUMENTATION FORM DESIGN Form sections Fields Identification Name, number, functional area Definition and usage Definition, link to strategic objective Calculation Sub-measures, formula, trend Orientation Meaning, impact, implementation level, indicator type Purpose Link to strategic objective Data profile Automation, frequency, time-lag, integrity, limitations Targets Intervals, benchmarking fit Administration Owner, custodian, source 123
  • 124. © The KPI Institute 2015 KPI DOCUMENTATION FORM (1) Source: The KPI Institute (2014) 124
  • 125. © The KPI Institute 2015 KPI DOCUMENTATION FORM (2) Source: Ontario Buys (2009) 125 Positive aspects: A comprehensive 2-3 pages documentation form; Recommendations: A table format for the document is recommended. Comments: Other fields, besides the ones present in the right image are: • Rational (the need for this KPI); • Benefits; • Underlying leading practices; • Relevancy; • Target considerations (establishment and impact with other metrics); • Related metrics and standards; • Implementation (calculation parameters, formula, what to include and exclude ) • Data accessibility; • Data source; • Implementation challenges.
  • 126. © The KPI Institute 2015 KPI DOCUMENTATION FORM (3) Source: HSE (2012) 126 Positive aspects: Proper display of information – using a 1 page table, while providing the critical information for KPI measurement. Recommendations: Standardize KPI names. Comments: • The use of predefined checklist, to standardize response options; • The insert of hyperlinks in the documents to redirect the reader to additional information; • Provides direct contact details, such email addresses.
  • 127. © The KPI Institute 2015 KPI DOCUMENTATION FORM Source: The KPI Institute (2014) • Organizations use on average 12 different fields to document a KPI • The most popular fields are: 21 19 18 13 12 11 8 7 7 6 0 5 10 15 20 25 Name Definition Calculation formula Data source KPI ID record Purpose Targets/ Thresholds Subordinate measures used for calculation Limitations Standard reporting frequency 127
  • 128. © The KPI Institute 2015 KPI DOCUMENTATION PROCESS Review internal literature Review external resources Consult with staff collecting or using the data Present to KPI owner for approval Review and approve by KPI architect / SME / Strategy Manager Approve by management team Add to organizational KPI library 3 4 5 6 1 2 7 128
  • 129. © The KPI Institute 2015 THE ORGANIZATIONAL KPI LIBRARY Process Design the initial KPI documentation form Update KPI documentation forms Review, update and sign-off KPI documentation forms Approve Centralize all KPI documentation forms in a KPI library Governance Strategy Office / KPI implementation team Data custodians KPI data owners Top management Strategy Office / KPI implementation team 3 4 5 1 2 129
  • 130. © The KPI Institute 2015 PRACTICE KPI DOCUMENTATION 130
  • 131. © The KPI Institute 2015 WORKING WITH TARGETS • Show the desired result level for KPIs • Represent the starting point in the measuring and analysis process (comparing to actual / desired level) • Impact behavior WHY The Goal Setting Theory (Ed Locke, Gary Latham) Working with Targets 131
  • 132. © The KPI Institute 2015 TARGET SETTING PROCESS Consultations in target setting should start with the top management. As KPIs are active and data is gathered, targets may be reviewed and recalibrated Targets need to be adjusted periodically as the internal and external environment of the company is in a permanent change. 132
  • 133. © The KPI Institute 2015 TARGET SETTING SOURCES Contextual Analysis Internal Benchmarking External Benchmarking External analysis (market trends) Historical records Working with Targets 133
  • 134. © The KPI Institute 2015 TARGET SETTING APPROACHES Top-down 134
  • 135. © The KPI Institute 2015 TARGET SETTING APPROACHES Bottom-up # Turn time 15 min Pre-flight check 5 min. Meal & beverage provisioning 5 min. Passenger boarding and deplaning 10 min. Cargo loading and unloading 10 min. Cabin grooming 3 min. Fuelling 5 min. • Some activities can take place in the same time like cabin grooming and cargo loading or unloading, allowing the process to be more efficient 135
  • 136. © The KPI Institute 2015 TARGET SETTING APPROACHES Establishing thresholds Set target value Determine trend • Increasing • Decreasing • Within range Establish thresholds • Above target • In tolerance range • Below target Define each threshold 136
  • 137. © The KPI Institute 2015 KPIS TREND Increasing Within range Decreasing 137
  • 138. © The KPI Institute 2015 KPI THRESHOLDS Popular methodologies to express thresholds Traffic light: • 2 points scale  Meets or exceeds target  Below target • 3 points scale  Meets or exceeds target  Acceptable range  Far below target • 4 points scale  Above target  Meets target  Acceptable range  Far below target 138
  • 139. © The KPI Institute 2015 KPI THRESHOLDS Perspective / Strategic Objectives / KPIs SRF Actual result Target Thresholds Status Financial Ensure financial stability $ Revenue M 10,500 10,000 >10,000 9,000-10,000 <9,000 Customers Maintain high level of patient satisfaction % Patient satisfaction Q 65% 80% >80% 70-80% <70% Internal Processes Ensure timely services # Waiting time for consultation M 20 30 <30 30-35 >35 People, Learning and Growth Develop staff competencies # Training hours per employee Y 30 24 24-28 20-24; 28-32 <20; >32 139
  • 140. © The KPI Institute 2015 CHALLENGES IN WORKING WITH TARGETS Technical • Historical data does not exist; • Accuracy of forecasts or analysis on which targets are set; • The use of benchmarking data; • Assigning weights. Social • Targets are perceived either too high or too low; • Targets are imposed, not established collaboratively; • Negative behaviors driven by target setting. 140
  • 141. © The KPI Institute 2015 Which negative behaviors are associated with performance based pay? Allocate the correct number in front of each statement. CHALLENGES IN WORKING WITH TARGETS Match Description No. Behavior Establishing lower targets than the realistic level estimated as possible. 1 Gaming Looking after the achievement of own targets, without consideration of the implications for other areas in the organization. 2 Sandbagging Disregarding environmental and safety considerations in the process of meeting targets. 3 Tunnel behavior Influencing results through unapproved means to ensure target achievement. 4 Unethical behavior 141
  • 142. © The KPI Institute 2015 1. KPI documentation form functions are to: • Provide an easier understanding of KPIs; • Facilitate communication; • Prepare KPIs activation; • Enable automation; • Ensure knowledge management; • Educate stakeholders; • Contribute to buy-in; 2. Most important fields in a KPI documentation form: name, definition, calculation formula, target, data source, data owner, data custodian. 3. Challenges in working with targets: sandbagging, tunnel behavior, unethical behavior and gaming. SESSION REVIEW 142
  • 143. © The KPI Institute 2015 • Aberdeen Group (2011), Enterprise performance management. Available at: http://www.aberdeen.com/Aberdeen-Library/6659/RA-enterprise-performance-management.aspx, • The KPI Institute (2014), KPI documentation forms research study Images: • HSE (2012), KPI guidelines. Available at: http://www.hse.ie/eng/services/Publications/corporate/performancereports/kpiguidelines2012.pdf • Khaled, A., Sanjoy, K. P., Ripon, K. and Salahuddin A. (2011), Selection of suppliers through different multi-criteria decision making techniques. Available at: journalofbusiness.org/index.php/GJMBR/article/download/479/426 • KPI Institute (2014), Human Resources Performance Management Toolkit. Available at: http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html • Ontario Buys (2009), Performance measurement. Phase II - User guide. Available at: http://www.doingbusiness.mgs.gov.on.ca/mbs/psb/psb.nsf/Attachments/BPSPerformMeasurePhaseII- UserGuide-pdf-eng/$FILE/perf_meas_userguide-eng.pdf • SmartKPIs.com (2015), Net promoter score. Available at: http://www.smartkpis.com/kpi-key- performance-indicator/net-promoter-score-1303.html REFERENCES 143
  • 144. © The KPI Institute 2015 144 AGENDA Key Learning Points 6 Data Gathering and Visualization 1. KPI activation process 2. KPI activation tools and techniques 3. Scorecards and dashboards design 1. Identify data quality dimensions; 2. Use KPI activation techniques and tools; 3. Design effective data visualization tools.
  • 145. © The KPI Institute 2015 IDENTIFY DATA QUALITY ISSUES KPI Name Actual Result Department Data Custodian Position Submission date Submission deadline # Time to fill a vacant position 35 HR Allan Smith Finance Manager 29-05-14 01-06-14 % Employee satisfaction 89% HR Allan Smith Finance Manager 28-05-14 01-06-14 % Return on capital employed (ROCE) 5% Finance Allan Smith Finance Manager 30-05-14 01-06-14 # Caseload per physician 55 Operations Dan McKenny Operations Manager 29-05-14 01-06-14 % Net promoter score Marketing Joe Linch Marketing Manager 25-05-14 01-06-14 % Patients retention 10% Marketing Joe Linch Marketing Manager 28-05-14 01-06-14 % Contracts signed 234 Logistics Julien Harrison Logistics Manager 02-06-14 01-06-14 # Consultation rooms available 4 Operations Dan McKenny Operations Manager 25-05-14 01-06-14 $ Consultation time 30 Operations Dan McKenny Operations Manager 27-05-14 01-06-14 % Brand awareness 50% Marketing Joe Linch Marketing Manager 27-05-14 01-06-14 % Suppliers accounting for 80% of spending 10% Logistics Julien Harrison Logistics Manager 27-05-14 01-06-14 You have received the following data to compile a report. You are requested to perform a quick data audit and identify possible issues. 145
  • 146. © The KPI Institute 2015 Data quality Timeliness Completeness Consistency Conformity Uniqueness Accuracy DATA QUALITY DIMENSIONS Is all the necessary data present? Is the data available at the time needed? Are there no duplicate records for the same data? Does data reflect the real world objects or a verifiable source? Is the data compliant with the format, type and range requested? Is the data presenting the same values in different systems? 146
  • 147. © The KPI Institute 2015 DATA QUALITY DIMENSIONS Most common challenges: Completeness Availability AccuracyTimeliness 147
  • 148. © The KPI Institute 2015 THE KPI ACTIVATION / DATA GATHERING PROCESS 1 • Meet with data custodians 2 • Secure activation budget 3 • Design the data gathering template 4 • Communicate the template to data custodians 5 • Send KPI data gathering notification 6 • Send reminder email 7 • Receive data KPI activation On-going data gathering process 148
  • 149. © The KPI Institute 2015 DATA GATHERING GOVERNANCE KPI Owner • Responsible to reach KPI targets Data Custodian • Responsible to gather data for KPIs Report Generator This role can be taken by: • Data custodian • KPI owner • A third party within the organization (e.g. data analyst, strategy/performance manager) 149
  • 150. © The KPI Institute 2015 DISCOVER DATA CUSTODIAN ROLES Analyze KPI measurement options Reach the targets for the KPIs Document KPIs Select KPIs Activate KPIs Take decisions based on KPI results Cascade KPIs to lower organizational levels Find solutions for inactive KPIs Ensure quality of data gathered: compliance with measurement methodology, accuracy and timeliness of submission Update KPI documentation forms 150
  • 151. © The KPI Institute 2015 KPI DATA GATHERING SOURCES SourcesSurveys ERP Internal Operations Benchmarking reports External entities (accreditations, ratings) # Customer satisfaction # Employee engagement Universities Hospitals SAP Oracle Production reports HSSE observation sheets External benchmarking reports 151
  • 152. © The KPI Institute 2015 KPI ACTIVATION TOOLS Data gathering process map Data gathering template KPI documentation form Source: The KPI Institute (2015) 1 3 2 152
  • 153. © The KPI Institute 2015 KPI ACTIVATION TOOLS Data gathering process map 11 3 2 Source: The KPI Institute (2015) 153
  • 154. © The KPI Institute 2015 KPI ACTIVATION TOOLS Data gathering template 1 3 2 Source: The KPI Institute (2015) 154
  • 155. © The KPI Institute 2015 KPI ACTIVATION TOOLS KPI Documentation form 1 3 2 Source: The KPI Institute (2015) 155
  • 156. © The KPI Institute 2015 KPI ACTIVATION / GATHERING TECHNIQUES Meeting KPI data custodians in person Involving data custodians in a community of practice Sending reminder email 1 3 2 After KPI activation, involving data custodians in a community of practice and sending a reminder email become part of an on-going process to gather data. 156
  • 157. © The KPI Institute 2015 KPI ACTIVATION TECHNIQUES Meeting KPI data custodians in person Maritz Institute - 3 main benefits for conducting face to face meetings: Source: EQAVET (n.d.) 1 3 2 Inspires a positive attitude Strengthens human networks and business relationships Captures attention 157
  • 158. © The KPI Institute 2015 KPI ACTIVATION TECHNIQUES Involving data custodians in a community of practice Source: EQAVET (n.d.) • Provides a common platform for data custodians to communicate and share work related experience; • Stimulates learning by supplying a medium for sharing best practices and tutoring; 1 3 2 • Creates collaborative processes that add value and maximize data custodian efficiency. 158
  • 159. © The KPI Institute 2015 KPI ACTIVATION TECHNIQUES Custodian name # KPIs to report # KPIs already reported on KPIs not reported on yet Due date Status Comment John Doe 8 8 none 13-Jan-15 Submitted Ann Smith 9 8 % Ambulance service budget out of total operational budget 13-Jun-15 Outstanding Emory Lafayette 5 3 % Profit rate, $ Revenue per patient 13-Jun-15 Outstanding Carlos Mendoza 6 5 % Successful treatments delivered 13-Jun-15 Outstanding Ahmed Alsaudi 5 3 # Visits per patient, # Physicians per shift 13-Jun-15 Outstanding Luis Ramirez 4 3 # Emergency room patient wait time 13-Jun-15 Outstanding Anthony Gleason 2 0 # Medical service quality rating, % Treatment price variance from market average 13-Jun-15 Not submitted Mike Myers 1 0 % Market share 13-Jun-15 Not submitted Sending reminder email 1 3 2 159
  • 160. © The KPI Institute 2015 DATA COLLECTION METHODS • Manual - Microsoft Excel • Automated:  Off-the shelf software;  Custom-designed software. Source: Gartner (2015) 160
  • 161. © The KPI Institute 2015 Source: Spider Strategies (2015) SPIDER STRATEGIES 161
  • 162. © The KPI Institute 2015 SOFTWARE SPOTLIGHT 162
  • 163. © The KPI Institute 2015 DATA VISUALIZATION GUIDELINES Graphical Representation Checklist: Is it necessary that the viewer makes his own calculations? Is data missing? Are the axes visible enough? Do lines intersect the data? Is there an informative title? Are all tags correctly associated with the graph elements? Are there too many dimensions in the graph? Are there scales for all axes included? Is 0 included in all line graphs? Source: Hichert (2006) 163Data Visualization
  • 164. © The KPI Institute 2015 DATA VISUALIZATION GUIDELINES Source: The KPI Institute (2014) 164
  • 165. © The KPI Institute 2015 COMMONLY USED GRAPHS IN PRACTICE 165 Bar charts Bullet graphs Dial charts Line charts Pie charts Sparkline 1 2 3 4 5 6
  • 166. © The KPI Institute 2015 BAR CHARTS Source: Adapted from Adecco (2013) 166 0 5 10 15 20 25 2009 2010 2011 2012 2013 Revenues (EUR billions) 0% 5% 10% 15% 20% 25% 30% Australia & New Zealand Switzerland LHH Iberia Nordics Italy Benelux Japan Germany & Austria UK & Ireland Emerging markets North America France 2013 Revenue split by segment (%) 0% 20% 40% 60% 80% 100% Branch managers Senior managers All managers Gender distribution in 2013 (%) Female Male Column chart Bar chart Stacked-bar chart For comparing individual values 1 2 3 4 5 6 2 3 4 5
  • 167. © The KPI Institute 2015 BULLET GRAPH Source: Adapted from Centrelink (2010) To compare actual results with targets 1 2 3 4 5 6 % Community satisfaction % Medical practitioner satisfaction % Practice manager satisfaction % Pharmacist satisfaction 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Thresholds (Under target, within tolerance limits, above targets) Target Actual performance Data 167
  • 168. © The KPI Institute 2015 DIAL CHARTS Source: Adapted from http://dashboard.virginiadot.org/default.aspx 168 Useful for signalling threshold values 1 2 3 4 5 6
  • 169. © The KPI Institute 2015 LINE CHART Source: Adapted from Unilever (2013) 169 Useful for tracking trends 1 2 3 4 5 6 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Net profit margin (%) 0 1,000 2,000 3,000 4,000 5,000 6,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Net profit (EUR million)
  • 170. © The KPI Institute 2015 PIE CHART 170 Useful for comparing different parts of a whole 1 2 3 4 5 6 51%49% % Net sales by segment Hardware (1,140 € m) Software (1,099 € m) 15% 13% 29% 43% % Net sales by segment Asia / Pacific / Africa (332 € m) Americas (304 € m) Germany (644 € m) Europe (959 € m) 67% 33% % Net sales by segment Banking (1,497 € m) Retail (742 € m)
  • 171. © The KPI Institute 2015 SPARKLINE Source: Adapted from United States Office of Personnel (2012), 171 Useful for showing data trends in a condensed manner 1 2 3 4 5 6
  • 172. © The KPI Institute 2015 SPARKLINES & BULLET GRAPHS DASHBOARD 172 1 3 4 5 6 2
  • 173. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Equinox Center (2014) 173 3D Pie chart Donut chart Crowded graphs Scales from 0 Background 1 2 3 4 5 6
  • 174. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from Adecco (2014) 174 1 2 3 4 5 6 0 10 20 30 40 50 60 70 80 90 1 2 3 4 5 3D or not?
  • 175. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from Adecco (2014) 175 3D or not? 1 2 3 4 5 6 0 10 20 30 40 50 60 70 80 90 1 2 3 4 5 51 62 71 77 82
  • 176. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from Word Bank (2014) 176 Avoid 3D graphics 1 2 3 4 5 6 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure 19.4% 19.3% 18.6% 17.9% Canada 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure 14.7% 12.8% 13.4% 13.2% Singapore 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure 25.6% 25.9% 25.1% 23.9% United States 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure 16.6% 16.2% 14.0% 15.9% India 19.4% 19.3% 18.6% 17.9% 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure Canada 14.7% 12.8% 13.4% 13.2% 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure Singapore 25.6% 25.9% 25.1% 23.9% 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure United States 25.6% 25.9% 25.1% 23.9% 0% 5% 10% 15% 20% 25% 30% 2009 2010 2011 2012 % Health expenditure India
  • 177. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from US Government (2014) 177 Pie charts: Inefficient use of space 1 2 3 4 5 6 Healthcare, 27% Pensions, 25% Defense, 22% Wefare, 11% Interest, 6% Education, 3% Transportation, 3% Protection, 1% General Government , 1%Other spending, 1% Federal Spending for United States (2014) 27% 25% 22% 11% 6% 3% 3% 1% 1% 1% 0% 5% 10% 15% 20% 25% 30% Healthcare Pensions Defense Wefare Interest Education Transportation Protection General Government Other spending Federal Spending for United States (2014)
  • 178. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from Astra Zeneca (2012) 178 Doughnut charts = an ink saving version of pie-charts 1 4 5 6 21% 27% 39% 13% 2011 Base salary Bonus PSP AZIP Fixed Variable 20% 32% 36% 12% 2010 Base salary Bonus PSP AZIP Fixed Variable 19% 34% 29% 18% 2009 Base salary Bonus PSP AZIP Fixed Variable 26% 32% 31% 11% 2011 Base salary Bonus PSP AZIP Fixed Variable 24% 36% 30% 10% 2010 Base salary Bonus PSP AZIP Fixed Variable 23% 35% 26% 16% 2009 Base salary Bonus PSP AZIP Fixed Variable 3 2
  • 179. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from MuRata (2014) 179 Avoid crowded graphs 1 2 3 4 5 6 ¥0.0 ¥50.0 ¥100.0 ¥150.0 ¥200.0 ¥250.0 ¥300.0 Sales by product 2010 2011 2012 2013 2014 Too much information on one graph creates confusion and relevant data is no longer visible.
  • 180. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: MuRata (2014) 180 Avoid crowded graphs 1 2 3 4 5 6 *The black line represents the average value of the 5 analyzed years *The green column represents the average sales value of all products ¥0.0 ¥50.0 ¥100.0 ¥150.0 ¥200.0 ¥250.0 ¥300.0 2010 ¥0.0 ¥50.0 ¥100.0 ¥150.0 ¥200.0 ¥250.0 ¥300.0 2011 ¥0.0 ¥50.0 ¥100.0 ¥150.0 ¥200.0 ¥250.0 ¥300.0 2012 ¥0.0 ¥50.0 ¥100.0 ¥150.0 ¥200.0 ¥250.0 ¥300.0 2013 ¥0.0 ¥50.0 ¥100.0 ¥150.0 ¥200.0 ¥250.0 ¥300.0 2014
  • 181. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Hichert (2006) 181 “Simplicity is the ultimate sophistication” – Leonardo DaVinci 1 2 3 4 5 6
  • 182. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from Luftansa (2014) 182 Scales should start from 0 1 2 3 4 5 6 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2009 2010 2011 2012 2013 Capital expenditure and cash flow form operating activities (EUR million) Capital expenditure Cash flow from operating activities 2,405 2,273 2,566 2,359 2,499 1,991 2,992 2,356 2,842 3,290 1,000 1,500 2,000 2,500 3,000 3,500 2009 2010 2011 2012 2013 Capital expenditure and cash flow form operating activities (EUR million) Capital expenditure Cash flow from operating activities
  • 183. © The KPI Institute 2015 USABILITY IN TERMS OF VISUAL DESIGN Source: Adapted from United Stated Census Bureau (2008) 183 Background 1 2 3 4 5 6 65.0% 62.5% 70.0% 66.5% 59.4% 64.8% 62.4% 69.3% 66.5% 59.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% United States Northeast Midwest South West Homeownership Rates by Region First quarter 2013 First quarter 2014 65.0% 62.5% 70.0% 66.5% 59.4% 64.8% 62.4% 69.3% 66.5% 59.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% United States Northeast Midwest South West Homeownership Rates by Region First quarter 2013 First quarter 2014 65.0% 62.5% 70.0% 66.5% 59.4%64.8% 62.4% 69.3% 66.5% 59.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% United States Northeast Midwest South West Homeownership Rates by Region First quarter 2013 First quarter 2014 Strong colors are not recommended for backgrounds. Avoid using strong gridlines, as they hinder visibility of data. Recommended visual representation
  • 184. © The KPI Institute 2015 KPI TOOLKIT SPOTLIGHT: BALANCED SCORECARD Source: The KPI Institute (2014) 184
  • 185. © The KPI Institute 2015 IN PRACTICE: SCORECARD Medicare Australia BSC Source: Medicare Australia (2009) 185 • The BSC perspectives can be adapted; • 6 perspectives identified: Financial, Services, Internal Business Processes, Growth and Development, People, Social and Environment; • For more consistency, the target field should be the last one, not inserted between actual results.
  • 186. © The KPI Institute 2015 Imperial College Healthcare, UK Source: Imperial College Healthcare, UK (n.d.) 186 • Clustering KPIs under relevant objectives adds structure to the data provided; • An additional field that illustrates previous results enables better trend analysis and comparison; • Color codes are used in order to understand the information in a more efficient manner. IN PRACTICE: SCORECARD
  • 187. © The KPI Institute 2015 NYS Office of Mental Health Source: New York State Office of Mental Health (2015) 187 • Current and past target achievements are illustrated • Differentiating between KPIs and objectives helps improve the performance reporting process • Standardization provides a clear segmentation between KPIs and objectives IN PRACTICE: SCORECARD
  • 188. © The KPI Institute 2015 Alberta Health Services, Canada Source: Alberta Health Services (2012) 188 • The table is easy to read; • The “status” column provides useful information regarding the KPIs which require immediate attention; • Actual results are compare to previous results. IN PRACTICE: SCORECARD
  • 189. © The KPI Institute 2015 Hospital Medicine Faculty, University of California Source: University of California (2012) 189 Positive aspects: Targets are clearly stated; the yearly progression of KPIs enables results comparison. Recommendations: The use of a 2 points scale may be too narrow: green - at and above target; pink - below target; Other comments: Given the lack of objectives or goals, the scorecard can be regarded as more of an operational tool. IN PRACTICE: SCORECARD
  • 190. © The KPI Institute 2015 SCORECARD DESIGN Checklist: • Numerical guide (to show if data has been shrink, if this is the case); • Legend; • Eliminate and minimize grids; • Delineate and group data (strategic themes, perspectives, objectives); • Outline status of results ( ≥target, acceptable range,<target); • Provide essential data (not nice to know information); • Align characters appropriately; • Use optimal size font for easy reading. Source: CLIMB (n.d.) 190
  • 191. © The KPI Institute 2015 KPI TOOLKIT SPOTLIGHT: DASHBOARD Source: The KPI Institute (2014) 191
  • 192. © The KPI Institute 2015 IN PRACTICE: DASHBOARD South Australia Health Source: South Australia Health (2013) 192 • Traffic lights point out areas with problems, outlining where actions must be taken. • Colors used have a meaning. • Combines a variety of visual representations that are well positioned in one page.
  • 193. © The KPI Institute 2015 IN PRACTICE: DASHBOARD Source: Department of Health United Kingdom (2013) 193 National Health Services, UK • No contrast background, no strong grids; • Contrast colors for line charts to outline different data sets; • Interactive charts, providing comprehensive details for each set of data. Data Visualization
  • 194. © The KPI Institute 2015 IN PRACTICE: DASHBOARD Source: Health Authority Abu Dhabi (2012) 194 Health Authority Abu Dhabi - UAE • Appropriate use of colors; • Trends can be deducted from the graphs. • Adding measures to the X axes will add clarity to the dashboard.
  • 195. © The KPI Institute 2015 IN PRACTICE: DASHBOARD Source: Spider Strategies (2015) 195 The KPI Institute, Quickscore - SpiderStrategies • Background designed based on thresholds to provide instant understanding of performance results; • Monthly evolution trends.
  • 196. © The KPI Institute 2015 KPI TOOLKIT SPOTLIGHT: PERFORMANCE HEALTHOGRAM 196 Source: The KPI Institute (2014)
  • 197. © The KPI Institute 2015 1. Data quality dimensions: completeness, validity, accuracy, consistency, integrity, timeliness. 2. KPI activation tools: • Data gathering process map; • KPI documentation form; • Data gathering template. 3. KPI activation techniques • Meeting KPI data custodians in person; • Involving data custodians in a community of practice; • Sending reminder email. SESSION REVIEW 197
  • 198. © The KPI Institute 2015 198 1. Scorecards use tables to visualize data, therefore: • It keeps tables simple; • No grids, no strong color combination; • Clusters data based on strategic themes, perspectives or objectives. 2. Dashboards: • Bar charts: to compare individual values; • Bullet graphs: to compare actual results to targets; • Dial charts: to indicate threshold values; • Line charts: to track trends; • Pie charts: to compare different parts of a whole; • Sparklines: to show trends in a condensed manner. 3. Avoid using: • 3D graphs: distort data • Pie and donut charts: inefficient use of space; • Crowded graphs: data is no longer visible; • Strong colors for backgrounds: hinder visibility. SESSION REVIEW
  • 199. © The KPI Institute 2015 • Adecco Group (2013), Annual report 2013. Available at: http://annualreport2013.adecco.com/fileadmin/user_upload/redakteure/ar2013/pdf/Adecco_Group_A R2013.pdf • Astra Zeneca (2012), Annual report 2011. Available at: http://www.astrazeneca- annualreports.com/2011/documents/pdfs/annual_report_pdf_entire.pdf • Centrelink (2010), Annual report 2009-10, available at: http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual- report/resources/0910/centrelink-annual-report-0910-full-report.pdf • Digital Inspiration (2012), Choose the right chart type for your data, available at: http://www.labnol.org/software/find-right-chart-type-for-your-data/6523/ • Domo (2011), How Fort Worth Police Department uses domo. Available at: https://www.youtube.com/watch?v=pKbakXit9H4 • Equinox Center (2014), Quality of life dashboard. Available at: http://www.equinoxcenter.org/assets/files/2014%20Final%20Dashboard%281%29.pdf • EQAVET (n.d.), Mission. Available at: http://www.eqavet.eu/gns/about-eqavet/mission.aspx • Fusion Charts (2013), Line & area charts, available at: http://www.fusioncharts.com/demos/gallery/#line-and-area • Gartner (2015), CIO Agenda insights. Available at: http://www.gartner.com/imagesrv/cio/pdf/cio_agenda_insights2015.pdf • Hichert (2006), Skalen ud deren manipulation, available at: http://www.hichert.com/downloads/success/check/Skalenmanipulation_2006-11.pdf REFERENCES 199
  • 200. © The KPI Institute 2015 • MuRata (2014), Investor relations. Available at: http://www.murata.com/ir/information/sales_product/index.html • SA Health (2013), Emergency department dashboard. Available at: http://www.sahealth.sa.gov.au/wps/wcm/connect/public+content/sa+health+internet/about+us/our+p erformance/our+hospital+dashboards/about+the+emergency+department+dashboard/emergency+depar tment+dashboard • Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-dashboard- balanced-scorecard-software • The KPI Institute (2014), KPIs Infographic. Available at: http://store.kpiinstitute.org/key-performance- indicators-infographic.html • Tufte, E. (1983), The visual display of quantitative information. Cheshire, CT: Graphics Press • Tufte, E. (2001), Presenting data and information, One-day course, September 17, 2001. New York • Unilever (2013), Making sustainable living commonplace, available at: http://www.unilever.com/images/ir_UNI_10-Year_Charts_2013_030314_tcm13-384260.pdf • United Stated Census Bureau (2008), Housing vacancies and homeownership, available at: http://www.census.gov/hhes/www/housing/hvs/qtr407/graph407.html • United States Government (2014), US Federal Budget Pie. Available at: http://www.usgovernmentspending.com/federal_budget_pie • United States Office of Personnel (2012), Annual performance report 2011. Available at: • World Bank (2014), Data. Available at: http://data.worldbank.org/indicator/GC.XPN.TOTL.GD.ZS/countries/1W-DE?display=default REFERENCES 200
  • 201. © The KPI Institute 2015 Images: • Alberta Health Services (2012), Performance Report. Available at: http://www.albertahealthservices.ca/Publications/ahs-pub-pr-2012-03-performance-report.pdf • Gartner (2015), Magic Quadrant. Available at: http://www.gartner.com/technology/reprints.do?id=1- 2AEDBU3&ct=150223&st=sb • Health Authority Abu Dhabi (2012), http://www.haad.ae/haad/tabid/1156/Default.aspx?Cat=1 • Medicare Australia (2010), Annual report 2009-10. Available at: http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual-report/resources/0910/centrelink- annual-report-0910-full-report.pdf • New York State Office of Mental Health (2015), Balanced Sorecard. Available at: http://bi.omh.ny.gov/scorecard/view • Department of Health United Kingdon (2013), NHS Procurement Dashboard. Available at: • The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at: http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html • The KPI Institute (2014), Medical Center Performance Management Toolkit. Available at: http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html • The KPI Institute (2014), Performance Healthogram. Available at: http://kpiinstitute.org/research/about-performance- management/performance-healthogram/ • Victoria Government Procurement (n.d.), Supplier performance scorecard. Available at: http://www.procurement.vic.gov.au/CA2575BA0001417C/WebObj/KPIandSupplierPerformanceScorecardTool(Appendix6)/ $File/KPI%20and%20Supplier%20Performance%20Scorecard%20Tool%20(Appendix%206).XLS • World Bank (2014), World Bank global scorecard. Available at: http://siteresources.worldbank.org/CSCARDEXT/Resources/2014_WBG_corporate_scorecard_e-version.pdf • University of California (2013), Division of Hospital Medicine Faculty Balanced Scorecard FY 2012. Available at: http://hospitalmedicine.ucsf.edu/bsc/fy2012.html REFERENCES 201
  • 202. © The KPI Institute 2015 Scenario • You are split in teams, with the objective of recalling as many key concepts as possible, connected to today’s sessions, starting from the central theme of the crossword game. Tasks • The rally race lasts for 3 minutes and team members take turns to run to the board and write down a key term starting from the letters provided by the central theme; • Words can be written as well based on the letters provided by other team members, both vertically and horizontally. • The team who generates as many relevant concepts in the limited timeframe wins the game. REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS 202
  • 203. © The KPI Institute 2015 REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS Example • Consider the following example to understand how key concepts can be build around the central theme (SUMMER) and around other team members ideas. S U N H U O M L M I C E C R E A M D R A Y Working with Targets 203
  • 204. © The KPI Institute 2015 REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS P E R F O R M A N C E 204
  • 205. © The KPI Institute 2015 205 10 takeaways to implement in your organization: 1. Connect your KPIs to strategy. 2. Articulate the KPI selection process – apply techniques like KPI selection workshop, KPI clustering, VFA and KPI balancing. 3. Avoid measuring what is easy to measure or familiar for the organization. 4. Use a balanced approached of performance measurement – Balanced Scorecard. 5. Use both scorecards and dashboards. COURSE REVIEW
  • 206. © The KPI Institute 2015 206 10 takeaways to implement in your organization: 6. Cascade the performance measurement framework down to employee level. 7. Develop the performance measurement capability in the organization. 8. Involve stakeholders in the KPI implementation project. 9. Avoid making irrelevant comparisons through flawed benchmarking. 10. Analyze objectives and KPIs in correlation, not as isolated elements. COURSE REVIEW
  • 207. Web: http://kpiinstitute.org/ http://www.smartkpis.com http://www.purposefulidentity.com/ http://www.balancedscorecardreview.com http://www.integratingperformance.com http://www.performancemagazine.org/ http://elearning.smartkpis.com Why choose The KPI Institute? Global expertise in: • Strategy Management • Performance Management • KPIs and analytics • Business Intelligence Rigorous research programs Extensive collections of publications Comprehensive educational programs Headquarters Melbourne Office Life.lab Building 198 Harbour Esplanade, Suite 606, Melbourne Docklands, VIC 3008, Australia T: +61 3 9028 2223 M: +61 4 2456 8088 office@kpiinstitute.org Middle East Division Dubai Office The Fairmont Dubai Suite 13 - Office 2103, 21st Floor Sheikh Zayed Road, POB 119724, Dubai, UAE T: +971 4 311 6556 M: +971 5 5787 6427 office@kpiinstitute.org European Division Sibiu Office Sibiu City Center Somesului Street, No. 3 550003 - Sibiu, Romania T: +61 3 9028 2223 M: + 40 7 4706 0997 office@kpiinstitute.org SE Asia Division Kuala Lumpur Office Wisma UOA II 21 Jalan Pinang, Unit 11-10, 50450 Kuala Lumpur, Malaysia M: +60 11 3303 2135 office@kpiinstitute.org