2. Key Performance Indicators
Critical for any organization or structure is to
set KPI's
KPI = indicator showing how far have you
have succeeded in achieving your strategic
objectives.
tk management consulting
3. Key Performance Indicators
Vision KPI’s are the indicator
showing how far have
Mission STRATEGY you have succeeded
in achieving your
& Values strategic objectives
Customers
KPI
Sales KPI
Internal Business KPI
Processes
HR Development
tk management consulting
4. Guidelines on setting KPI’s
Formulating & Communicating KPI’s
The measure of success must show clear, specific and
measurable performance indicators
The measure of success must be declared explicitly and
in details, so it is clear what is being measured
The measure of success must be communicated
through all of the organization
Regular communication is as critical as setting the KPI’s
tk management consulting
5. Guidelines on setting KPI’s
Relevant to Strategy Does the settled KPI’s have a clear link with
the strategic objectives of the organization?
Control Are the KPI’s and achievements under regular
control?
Action What actions can be taken to improve the
performance of the organization?
Simple Are the KPI’s easy to explain?
Credible Are KPI’s easy to manipulate?
tk management consulting
7. KPI Dimension
Measures employees output (units/
transactions /sales / vale), the uptime levels
and how employees use their time – sales to
assets ratio, revenue from new customers,
sales in the pipeline
Measures the ability to meet and/or exceed
the requirements and the expectations of the
customers
tk management consulting
8. KPI Dimension
Measures the overall effectiveness of the
organization/structure in generating profits
(Profit contribution by segments, by
customers, by margin spreads)
Measures the time (hour, day, week, month)
in which employee tasks are completed (on-
time delivery)
tk management consulting
9. KPI Dimension
Measures how effectively the
organization/structure incorporates the
quality control - best practices to streamline
operational processes
Measures how effectively the
organization/structure leverages exiting
business resources (sales per channel,
conversion ratio)
tk management consulting
10. KPI Dimension
Measures how effectively the
organization/structure achieves economies
on scale and scope of work with its
people, staff and practices to control
operational and overhead costs (cost per
unit, ext. )
Measures the ability of the
organization/structure to maintain
competitive economic position in line with
the industry (market share, customer
retention, account penetration)
tk management consulting
11. KPI Category Dimension
The actual raw data values as measured (e.g.
sales volumes)
The comparison of the changes in
performance of one value relative to the
same value at different time (e.g. percentage
change in sales vs last year )
tk management consulting
12. KPI Category Dimension
The addition of the weighed average of the
several similar measures that result in an
overall composite indicator of performance
(customer satisfaction, survey results, focus
groups and product returns/profitability)
Multiple measures, such as standard
deviation and variance that capture the
spread and distribution of the performance
(sales distribution by geography, by channel)
tk management consulting
13. So WHY setting KPI’s
They mirror your organization vision
They set goals on all organizational levels
They are based on legitimate data
They drive action
tk management consulting
14. Did you set
the KPI’s for
your structure?
tk management consulting
