This document provides guidance on designing effective key performance indicators (KPIs). It recommends involving both top managers and line-level managers in the design process. Good indicators should not repeat each other but together describe 90% of the business unit. Indicators also need to be easy to measure and understand. The number of indicators in each category should be kept low, ideally three or four, to avoid overloading the scorecard. More details on designing KPIs can be found at the listed website.

1. Designing Winning Indicators A bonus mini-lesson from www.ScoreCardTrainings.com

2. Designing Winning Indicators We discussed the process of designing great indicators in the eTraining, “How to Design Winning KPIs,” available at www.ScoreCardTrainings.com. In this bonus mini-lesson, we will review some basic ideas about designing Key Performance Indicators. Copyright © BSC Designer. More Balanced Scorecard Trainings at www.scorecardtrainings.com.

3. Basic Ideas about designing KPIs Who should design your indicators? You should involve at least two people: a top manager, who understands the company’s strategy and goals; and a line-level manager, who knows what can and should be done to achieve those goals. Do you have good indicators? There are two rules to remember. Your indicators should not repeat each other, but taken together, they should describe 90% of your company or business unit.

4. Basic Ideas about designing KPIs Are your indicators easy to measure? Your indicators should be easy to understand and measure, or your employees will not use them. So first, try measuring each indicator yourself. Then, ask a colleague for an independent opinion. If your colleague needs a significant amount of time to understand the indicator, then it is not a good indicator. Either remove it from your scorecard, or clarify its description. How many indicators? Keep the number of indicators low. Ideally, you should have three or four indicators in each category. If you have more, you are overloading your scorecard. Either add sub-categories, or create a Cascading Balanced Scorecard.

5. More about winning KPIs To learn more about the Balanced Scorecard, please visit www.ScoreCardTrainings.com.