Tags |
|
|
Links |
|
|
Add You - What is a Key Performance Indicator (KPI)?
Growing up on a Delaware farm was a wonderful and rewarding experience for me.I grew up in an area where a couple of dozen families in an area of about hundred square miles had farmed, married each other and been a stable community for centuries, along Delaware Rout One just north of Lewes.In my early youth, I grew up on a farm where we had 33 cows, 18 we milked twice a day, 3 horses, some chickens, 60 acres of corn, hay and pasture. It was a farm that my maternal grandparents owned. There were barns, tractors, long hours and Sundays in church. We grew corn, hay and pasture. We had a large garden and some fruit trees. We hunted, foraged, and grew what we ate and used in most cases. W
Lag, Current and Lead
Timing of KPIs, relative to achievement of corporate goals, is fundamental in choosing good candidate KPIs. Financial results, such as last quarter's revenue, are typically lagged by 2+ months. Annual results, especially fiscal year results, can be much more delayed.
<When you begin searching for a job, you need to take stock of your abilities as well as your weaknesses. Yes, it would be nice to simply focus on the things we do well. In truth, however, employers are as interested in what you can’t do as they are in what you can do. If you are prepared to address both possibilities, you will be better off than your competitors.What are some of the areas that you need to be aware of? Well, think about your last performance evaluation (or if you have not had one, imagine what prospective employers are most likely to be interested in).Employers want employees who will do many things in addition to the specific tasks of the position for which they
A KPI defines itself, to a large extent, by its name; it is a performance indicator, i.e. the performance of the process it is measuring should be clearly indicated by the KPI.
This should clarify that the purpose of a KPI is not, for example, to measure the risk of a process, nor its age, nor its length, but its performance.
Further, a KPI should be key, not just any casual measure of a process (or a business as a whole); this can be taken as the KPI being closely correlated with the objectives of the process being measured.
An important and often overlooked aspect of a KPI not contained within its name is that it measures a continuous or discrete but repeated process.
Typical continuous processes include manufacture (toothpaste production, widget manufacture) and service where the dimensions are large (credit management for large public utilities, help desk for large IT installations).
Sometimes services which look to be custom when considered at an individual level (your neighbour's knee surgery operation) can also be considered as almost continuous when considered at a coarse enough level of granularity (knee surgery in Australia in the ‘90s).
Typical discrete, repetitive processes include service (PC installation, car sales and hotel check-in).
All of this ought to be self-evident, but it is common to see. For example, Target Completion Dates or Product Specifications (or both) labelled as KPIs.
Where the intention is to measure once-off performance of a project, or as part of a business plan, a specification or target date (or both) will suffice; labelling it a KPI is both unnecessary and confusing.
Moreover, developing only one off measures as a proxy for real KPIs puts a business at risk.
The implication of using one off performance measures in lieu of key performance indicators is that many organisations do not know how well they are performing. That is, until, a significant universal lagging KPI such as profitability or lost time injury frequency ratio reaches unacceptable levels.
Lag, Current and Lead
Timing of KPIs, relative to achievement of corporate goals, is fundamental in choosing good candidate KPIs. Financial results, such as last quarter's revenue, are typically lagged by 2+ months. Annual results, especially fiscal year results, can be much more delayed.
Why Interview?The whole interview process is a mutual exchange of information between both parties. You and the company need to be sold on each other for there to be a win-win situation that makes all parties happy.Most interviews are 80% character searching and 20% operational skill set. So obviously, the critical areas are your professional appearance, attitude, personality, energy and enthusiasm. The operational skill set is composed of your strengths like training and development, cost control, sales building and cleanliness. There are other strengths you certainly possess, but you get the picture.Preparation Before the Interview Always discuss with your rec
Further, a KPI should be key, not just any casual measure of a process (or a business as a whole); this can be taken as the KPI being closely correlated with the objectives of the process being measured.
An important and often overlooked aspect of a KPI not contained within its name is that it measures a continuous or discrete but repeated process.
Typical continuous processes include manufacture (toothpaste production, widget manufacture) and service where the dimensions are large (credit management for large public utilities, help desk for large IT installations).
Sometimes services which look to be custom when considered at an individual level (your neighbour's knee surgery operation) can also be considered as almost continuous when considered at a coarse enough level of granularity (knee surgery in Australia in the ‘90s).
Typical discrete, repetitive processes include service (PC installation, car sales and hotel check-in).
All of this ought to be self-evident, but it is common to see. For example, Target Completion Dates or Product Specifications (or both) labelled as KPIs.
Where the intention is to measure once-off performance of a project, or as part of a business plan, a specification or target date (or both) will suffice; labelling it a KPI is both unnecessary and confusing.
Moreover, developing only one off measures as a proxy for real KPIs puts a business at risk.
The implication of using one off performance measures in lieu of key performance indicators is that many organisations do not know how well they are performing. That is, until, a significant universal lagging KPI such as profitability or lost time injury frequency ratio reaches unacceptable levels.
Lag, Current and Lead
Timing of KPIs, relative to achievement of corporate goals, is fundamental in choosing good candidate KPIs. Financial results, such as last quarter's revenue, are typically lagged by 2+ months. Annual results, especially fiscal year results, can be much more delayed.
<Many small business owners who are successful think of franchising their businesses. Why you ask? Well somewhere along the way their customers start telling them what a great business they have and they should have a business like this all over the country or world. This is indeed an ego-booster for the 17-hour a day small business entrepreneur.Of course franchising like anything is not as easy as it looks. How will you know if your business is franchise-able? Well simple really you need to go through a little checklist and ask yourself is my business easily duplicate-able? Can I train someone in 2-3 weeks max to do this business at a similar level as you are currently doing it? Can I make
Sometimes services which look to be custom when considered at an individual level (your neighbour's knee surgery operation) can also be considered as almost continuous when considered at a coarse enough level of granularity (knee surgery in Australia in the ‘90s).
Typical discrete, repetitive processes include service (PC installation, car sales and hotel check-in).
All of this ought to be self-evident, but it is common to see. For example, Target Completion Dates or Product Specifications (or both) labelled as KPIs.
Where the intention is to measure once-off performance of a project, or as part of a business plan, a specification or target date (or both) will suffice; labelling it a KPI is both unnecessary and confusing.
Moreover, developing only one off measures as a proxy for real KPIs puts a business at risk.
The implication of using one off performance measures in lieu of key performance indicators is that many organisations do not know how well they are performing. That is, until, a significant universal lagging KPI such as profitability or lost time injury frequency ratio reaches unacceptable levels.
Lag, Current and Lead
Timing of KPIs, relative to achievement of corporate goals, is fundamental in choosing good candidate KPIs. Financial results, such as last quarter's revenue, are typically lagged by 2+ months. Annual results, especially fiscal year results, can be much more delayed.
<Corporate crime? I'm not sure that there is such a thing. If we want to reduce the crimes that are given that lable, we need to quit handing out large punitive fines to corporations. The idea isn't as radical as it sounds.First of all, when I say that there isn't such a thing as corporate crime, I simply mean that it is always individual people who commit crimes. With that in mind, you can imagine what my better way to reduce this crime is: Go after the criminals!Who Pays For Corporate Crime?Exactly who pays when a large corporation is fined for breaking the law? To begin with, the stockholders pay. Many of these are innocent retirees who have money invested with the co
Where the intention is to measure once-off performance of a project, or as part of a business plan, a specification or target date (or both) will suffice; labelling it a KPI is both unnecessary and confusing.
Moreover, developing only one off measures as a proxy for real KPIs puts a business at risk.
The implication of using one off performance measures in lieu of key performance indicators is that many organisations do not know how well they are performing. That is, until, a significant universal lagging KPI such as profitability or lost time injury frequency ratio reaches unacceptable levels.
Lag, Current and Lead
Timing of KPIs, relative to achievement of corporate goals, is fundamental in choosing good candidate KPIs. Financial results, such as last quarter's revenue, are typically lagged by 2+ months. Annual results, especially fiscal year results, can be much more delayed.
<It is nearing the end of year and the season of office parties has begun. This could be your big chance to smooze up to senior management and vie for future promotion opportunities. It could be your chance to make a move on that hottie in accounts or just a great opportunity to relax, enjoy the company of your colleagues in a social setting and celebrate the year.But the office Christmas party is often far from an innocent social event and fraught with potential drama. So how can you survive the office Christmas party, below Following are some tips from Lisa O’Brien, our CareersCoach.Dilemma 1:I want to look really sexy at the Christmas party… Is this possible without compr
Lag, Current and Lead
Timing of KPIs, relative to achievement of corporate goals, is fundamental in choosing good candidate KPIs. Financial results, such as last quarter's revenue, are typically lagged by 2+ months. Annual results, especially fiscal year results, can be much more delayed.
With such lags, the problem arises as to what action might be appropriate to alter the direction of the department's performance, when the KPIs are measuring results in the past.
A correction may be inappropriate when the current performance has already significantly altered from that measured some time ago and may result in overcorrection.
Lag indicators should rarely be considered as a KPI as the benefit of KPI is to adjust processes and behaviour to get better performance.
KPIs measuring current performance are more useful. Examples include today's bookings, sales or production level. As always, care must be taken not to allow instant results to result in instant reactions which, in turn, reinforce the original problem.
Other KPIs are of the leading type; their measures are predictive of desired results at the next higher level.
An example of such a leading indicator for market share is customer satisfaction with the organisation's products and service. It is important to note though, that customer satisfaction survey output is a lagging indicator of customer service.
The primary difficulty with leading KPIs is to be sure that they are strongly correlated with the required corporate goals; modelling and understanding of key business drivers is necessary.
The corollary, of course, is that taking the time and effort to determine the key business drivers will result in a useful KPI rather than a number which is reported on monthly but caused no action to happen even when it strays outside its range of limits.
More than the nature and the design, a KPI must be understood by all staff. Further, all staff must know the corrective action to be applied. The corrective action must impact the KPI.
For example, completing plant production runs to schedule for a manufacturing plant impacts lead time which impacts stock levels, purchasing levels, in-full delivery, employee satisfaction and customer satisfaction. The deviation from production schedule of production is a leading indicator of a wide range of performance indicators.
Understanding that deviation from
HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.addyou.info/article/21571/addyou-What-is-a-Key-Performance-Indicator-KPI.html">What is a Key Performance Indicator (KPI)?</a>
BB link (for phorums):
[url=http://www.addyou.info/article/21571/addyou-What-is-a-Key-Performance-Indicator-KPI.html]What is a Key Performance Indicator (KPI)?[/url]
Related Articles:
Recruiting Is Like Opening a Box of Chocolates
Hot Business Trends for 2004... And Beyond: Maybe One Will Turn Into a Creative Business Idea for Yo
What is a Key Performance Indicator (KPI)?
Bookmark it:
|