Key Performance Indicators (KPI): Developing, Implementing, and Using Winning KPIs

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Key Performance Indicators Developing, Implementing, and Using Winning KPIs Second Edition

Key performance indicators (KPIs), while used commonly around the world, have never until now been clearly defined. Management personnel have identified measures as KPIs though these measures have never been KPIs. The lack of understanding of performance measures has led most monitoring and reporting of measures to fail. The casualty has often been the ...

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Overview

Key Performance Indicators Developing, Implementing, and Using Winning KPIs Second Edition

Key performance indicators (KPIs), while used commonly around the world, have never until now been clearly defined. Management personnel have identified measures as KPIs though these measures have never been KPIs. The lack of understanding of performance measures has led most monitoring and reporting of measures to fail. The casualty has often been the balanced scorecard, a brilliant tool that can only work if the appropriate measures are in it.

Fully revised and updated, Key Performance Indicators: Developing, Implementing, and Using Winning KPIs, Second Edition represents a significant shift in the way KPIs are developed and used, with an abundance of implementation tools. This Second Edition includes new features to assist you with their implementation:

  • A letter to the CEO
  • A 12-step model for developing and using KPIs with revised guidelines
  • Implementation guidelines for small to medium enterprises and not-for-profit organizations
  • How to brainstorm performance measures
  • A kit to help you find your organization's critical success factors
  • New examples and illustrations
  • Worksheets, workshop programs, and questionnaires
  • Over 300 performance measures
  • Updated templates for reporting performance measures
  • A facilitator's (consultant) resource kit
  • References to "free" and "for fee" electronic media to help save you time

By exploring measures that have transformed businesses, this proactive guide has developed a methodology that is breathtaking in its simplicity and yet profound in its impact. Written by KPI expert David Parmenter, it has been said that this book is the missing link between the balanced scorecard work of Robert Kaplan and David Norton and the reality of implementing performance measurement in an organization.

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  • David Parmenter
    David Parmenter  

Editorial Reviews

From the Publisher
"The book makes an important distinction that separates performance indicators from results indicators (like profits, market share percentages, or customer satisfaction numbers), and gives an intriguing list of characteristics for identifying a KPI in the wild. All in all, it's a very handy reference for making sense of something people think they already know - but don't." (Accounting Today, Aug 16-Sept 12, 2010)

"(Parmenter)...draws on his previous research and experience to compile a series of 'how-to' guide-lines for performance improvement implementation for senior managers." (Accountancy Ireland, August 2010)

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Product Details

  • ISBN-13: 9780470545157
  • Publisher: Wiley
  • Publication date: 2/8/2010
  • Edition number: 2
  • Pages: 320
  • Product dimensions: 6.20 (w) x 9.10 (h) x 1.20 (d)

Meet the Author

David Parmenter is an international presenter who is known for his thought-provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in the development of winning KPIs, replacing the annual planning process with quarterly rolling planning, quick month-end processes, and converting reporting to a decision-based tool. Parmenter's work on KPIs is recognized internationally as a breakthrough in understanding how to make performance measures work. He has delivered workshops to thousands of attendees in many cities around the world including Sydney, Melbourne, Kuala Lumpur, Singapore, Tehran, Johannesburg, Dublin, London, Manchester, Edinburgh, and Prague. Parmenter has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and PricewaterhouseCoopers, and is a fellow of the Institute of Chartered Accountants in England and Wales. He is a regular writer for professional and business journals. He is also the author of Pareto's 80/20 Rule for Corporate Accountants (Wiley). David can be contacted via parmenter@waymark.co.nz. His website www.davidparmenter.com contains many white papers, articles, and freeware that will be useful to the reader.
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Table of Contents

Preface ix

Acknowledgments xix

CHAPTER 1 Introduction 1

Key Result Indicators 2

Performance and Result Indicators 3

Key Performance Indicators 4

Management Models that Have a Profound Impact on KPIs 16

Definitions 24

Notes 27

CHAPTER 2 Foundation Stones for Implementing Key Performance Indicators 29

Four Foundation Stones Guiding the Development and Use of KPIs 29

Defining Vision, Mission, and Strategy 37

Note 39

CHAPTER 3 Developing and Using KPIs: A 12-Step Model 41

Step 1: Senior Management Team Commitment 41

Step 2: Establishing a Winning KPI Project Team 51

Step 3: Establishing a “Just Do It” Culture and Process 55

Step 4: Setting Up a Holistic KPI Development Strategy 62

Step 5: Marketing the KPI System to All Employees 67

Step 6: Identifying Organization-Wide Critical Success Factors 74

Step 7: Recording Performance Measures in a Database 74

Step 8: Selecting Team-Level Performance Measures 77

Step 9: Selecting Organizational Winning KPIs 86

Step 10: Developing the Reporting Framework at All Levels 88

Step 11: Facilitating the Use of Winning KPIs 96

Step 12: Refining KPIs to Maintain Their Relevance 101

Notes 105

CHAPTER 4 KPI Team Resource Kit 107

Using This Resource Kit 107

Step 1 Worksheet: Senior Management Team Commitment 108

Step 2 Worksheet: Establishing a Winning KPI Team 115

Step 3 Worksheet: Establish a “Just Do It” Culture and Process for This Project 119

Step 4 Worksheet: Setting Up a Holistic KPI Development Strategy 122

Step 5 Worksheet: Marketing the KPI System to All Employees 125

Step 6 Worksheet: Identifying Organization-wide CSFs 132

Step 7 Worksheet: Comprehensive Recording of Measures within the Database 132

Step 8 Worksheet: Selecting Team Performance Measures 133

Step 9 Worksheet: Selecting Organization-wide Winning KPIs 141

Step 10 Worksheet: Developing Display, Reporting, and Review Frameworks at All Levels 143

Step 11 Worksheet: Facilitating the Use of KPIs 146

Step 12 Worksheet: Refining KPIs to Maintain Their Relevance 146

CHAPTER 5 Templates for Reporting Performance Measures 155

Reporting Key Result Indicators in a Dashboard to the Board 155

Reporting Performance Measures to Management 163

Reporting Performance Measures to Staff 169

Graph Format Examples 172

Notes 184

CHAPTER 6 Facilitator’s Resource Kit 185

Remember the Fundamentals 185

KPI Typical Questions and Answers 187

CHAPTER 7 Critical Success Factors Kit 199

Benefits of Understanding Your Organization’s CSFs 200

Relevant Success Factors 204

Step 6: Identifying Organization-wide Critical Success Factors 205

Finding the CSFs through a Relationship Mapping Process 212

How I Organize the Critical Success Factor Workshop 213

Note 222

Appendix 7A: Where to Look for Your Success Factors 222

Appendix 7B: Letter Invite from the CEO 224

Appendix 7C: Success Factors Workshop Planning Checklist 225

Appendix 7D: Workshop Instructions 227

Appendix 7E: Success Factor Matrix 233

CHAPTER 8 Brainstorming Performance Measures 241

CHAPTER 9 Implementation Variations for Small-to-Medium Enterprises and Not-for-Profit Organizations 243

Small-to-Medium Enterprises 243

Not-for-Profit Organizations 246

CHAPTER 10 Implementation Lessons 253

How to Implement Winning KPIs in 16 Weeks 253

Notes 265

Epilogue: Electronic Media Available to You 267

Appendix: Performance Measures Database 269

Index 295

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