Go for the KPI Quick Win.

One of the best ways to start changing people’s ideas about the value of performance measurement is to give them examples or experiences of exactly how it has transformed performance. And the KPI Quick Win is how to do that.

Essential steps in getting your KPI Quick Win.

If you go about setting up a KPI using the same old approach you’ve used for all your existing KPIs (the ones that no-one uses or sees value in), then you’ll just create more of the same. You need to take a fresh approach, an approach that avoids the mistakes our old approaches are based on:

Step 1: Choose a goal you really want or need to achieve

Step 2: Make your goal measurable by teasing out the performance result(s) it implies

Step 3: Use sensory rich language to describe your result

Step 4: Choose potential measures that give evidence of your result

Step 5: Evaluate your potential measures and select the most meaningful one

Step 6: Name and describe your selected measure

Step 7: Define exactly how to calculate your measure’s values

Step 8: Get the data and make it ready for analysis

Step 9: Calculate your measure’s values

Step 10: Choose the presentation method that best highlights your measure’s message

Step 11: Interpret what your measure is saying, and understand why it’s saying that

Step 12: Make a decision, and take action to move closer to your goal

Bonus step: Shout it from the rooftops – share your KPI Quick Win with anyone who’ll listen

Following these steps will be a lot easier, a lot quicker and a lot more successful if you follow a technique like Getting Started With Performance Measures – it details exactly what to do in each of the 12 steps above.

After you get your KPI Quick Win.

Don’t rush to overhaul your organisation’s entire performance measure system just on the success from a single quick win. Many people will need more convincing, they’ll need to see how it might work in their functional area, and they’ll need to learn and understand the techniques of good performance measurement to build their confidence and conviction.

So right after your first KPI Quick Win, see if you can get enough people interested to participate in another Quick Win, and run two or three of them in parallel. Let the confidence and conviction grow organically, and when you have a critical mass, you’re ready to develop a comprehensive organisation-wide performance measurement system. That’s what a methodology like PuMP will help you do.

TAKE ACTION: The best action I can suggest to get your KPI Quick Win is to get a copy of the Getting Started With Performance Measures How-to Kit and get started today. In a week or two, you’ll have your quick win.

IN THIS EPISODE:

Article: How To Get A KPI Quick Win, Quickly
Q&A: Which sources have the best KPIs?
Quick Tip: Use the KPIs you have before you look for more.

Subscribe at iTunes or listen here:

Download mp3

STEP 1: Stocktake your current KPIs against your goals.

KPIs shouldn’t float around unattached to goals. They are evidence of progress toward goals. Get a list of your goals, and list of your KPIs or measures, and link them to each other.

If everything links to everything, you’ve gone too far. Focus on linking KPIs or measures to the goals they are the most direct and strongest evidence of. If any KPIs or measures aren’t strong evidence of anything, toss them.

STEP 2: Choose your three priority goals.

If you only have three goals, that’s great. If you have more than three goals, that’s not great. If you expect to achieve any of them with excellence (and why would you aim to achieve a goal without excellence?) you have to pare it down to three.

Why? Watch the second video on this page http://tinyurl.com/threegoals. You can move onto the other priorities after you achieve your three WIGS (wildly important goals).

STEP 3: For each priority goal, have no more than three KPIs.

Sometimes a goal only needs one measure or KPI. Excellent – that will keep it simple. But you can sometimes need two or three KPIs or measures for any one goal, for example, when you need more than one stakeholder’s perspective on the goal. But no more than three KPIs or measures per goal!

And ta da! That’s how many KPIs you need right now.

TAKE ACTION: Very simply, follow those three steps to the letter!

IN THIS EPISODE:

Article: How Many KPIs Do You Need?
Q&A: What questions should I ask managers to help them define their KPIs?
Quick Tip: Think influence, not control.

Subscribe at iTunes or listen here:

Download mp3

IN THIS EPISODE:

Article: How to Make the Case For KPIs.
Q&A: How do you implement KPIs in manufacturing, HR, a shoe business, and so on…?
Quick Tip: Measuring the success of performance measurement.

Subscribe at iTunes or listen here:

Download mp3

A pilot is a small and focused trial run to test an approach, before deciding if and how to implement that approach more fully. Pilot tests are often used to test new business procedures, technology, medications and even market research questionnaires and surveys. They’re a bit like a fishbowl – you contain it in a small time and space and watch what happens.

If you’ve decided to start with a pilot test of the PuMP Performance Measure Blueprint – or any other measurement methodology – then, as with any pilot, you’re not only implementing the approach but you’re also evaluating the approach too. So even though it’s a quick and simple version of what you’re hoping to implement more fully later, don’t get blasé and think that your PuMP pilot doesn’t need careful planning. It does, if you’re going to get the most leverage from it.

Start small. Choose just one team or one process or one strategic goal to develop measures for. Don’t give in to the temptation of scope-creep! The more ruthlessly you focus the first time through, the more success you’ll likely have.

Involve a small group of about three to five willing volunteers so you don’t have cynicism fighting the momentum first time through. They’ll be valuable to involve in subsequent performance measure projects, because they’ll become the strongest advocates. But for now, give yourself all the conditions you can which will support your short-term success.

Set a short timeframe and darn well stick to it! I find that with a small focus, a six-week timeframe is realistic to select, implement and start using your first meaningful performance measures.

Have a plan that draws on the simplest application of PuMP or your chosen performance measurement methodology, but make sure you work all the way through the process, don’t just stop after designing some measures. Bring them to life and use them to test their true value.

Build time in to reflect and review the approach you took, and design your way onward and outward with the next phase of implementation.

Write up your pilot experience as a case study, and share it around with the people you’d like to get involved in next phase of performance measure implementation. Encourage the interest and ownership to grow organically – don’t force it.

Build the critical mass by taking a few more “pilot approaches”, until you get enough support and leadership to make PuMP your corporately adopted measure development framework.

TAKING ACTION:
Get a very quick and easy KPI success by choosing just one area your team needs to improve and monitor, and follow the 12-step Getting Started With Performance Measures process to pilot test a good measurement approach. Build up the momentum through small successes!

What most people are really searching for is the detailed, nitty-gritty, exactly-how-do-you-do-it steps of deciding what to measure, choosing the most appropriate measures, designing new measures from scratch, implementing measures, reporting measures in a useful and usable way, and integrating measures seamlessly into decision making.

And because that’s what I was searching for back in the 1990s, in my role as Measurement Consultant at Queensland Rail, is why PuMP® was born. PuMP® is all about the performance measurement process (that’s where the ‘PMP’ comes from – the ‘u’ comes from a client who wanted to give the Performance Measurement Process a cute nickname instead of a boring acronym). PuMP® is a methodology that gives you the steps to develop performance measures. And here are those seven steps:

1. SELECT: choose what’s worth measuring

Selecting what to measure starts not with the question ‘what should we measure?’ but with first being clear about the results that matter most to you and your business. If you don’t know the performance results you’re trying to achieve, then you’ll probably too many measures that no-one finds useful, or no measures at all. And the way that most business strategy is written, it’s very hard to work out what the important results are, because of the vague language and broad terminology (for example: “We will enhance the quality, reliability, efficiency and effectiveness of our service delivery processes”).

This first step in PuMP has you doing two things specifically: we first use the PuMP Results Mapping technique to decide what results are worth measuring, and then we use the PuMP Measure Design technique to create or select the measures that are the strongest and most feasible evidence of those results. No guessing, no brainstorming.

2. COLLECT: gather data which has integrity

The process of collecting data for performance measures is critical to its integrity and can be very resource intensive. The more you can limit your data collection to what is useful, not just interesting, the better off you’ll be. So it pays (literally) to be super-specific about the data you really need for your performance measures, and not just go create a survey or form to collect a bunch of data that seems potentially useful.

There are two PuMP techniques that help maximise the benefits from your data collection efforts: the PuMP Measure Definition technique to be very precise about exactly what data each measure will need, and the PuMP Data Collection Process technique to design the steps to get the data you need without wasted time or effort.

3. STORE: manage the data so it’s quick and easy to access

Where and how you store your data directly determines what data you can access, when and how quickly you can access it, how easy or difficult it is to access and how much cross-functional use you can get out it. Most of the skill for managing performance data lies in your organiation’s IT department, but your PuMP Measure Definitions will go a very long way toward helping the IT department get you access to the data you need, with the least effort.

4. ANALYSE: turn the data into information

Analysis is the process of turning raw data into information. To make sure your performance measures are the most appropriate information you need to be almost pedantic about the analysis method you choose to answer those measures’ driving questions.

Again, the PuMP Measure Definition technique helps you make it very clear what the right analysis method is for each of your performance measures, and as such, these Measure Defintions become the blueprint or specification for exactly how each performance measure will be brought to life. No more pie charts or percentages when the real driving questions actually need a time series analysis!

5. PRESENT: effectively communicate the information

In communicating performance information, you are influencing which messages the audience focuses on. It’s vital to take care to present performance measures in ways that provide simple, relevant, trustworthy and visual answers to their priority questions. Too many people just throw performance reports or dashboards together with graphs designed to entertain rather than inform. And usually then end up misinforming!

The PuMP Reporting Measures technique helps you to design a structure, content, layout and visual design for your performance reports that syncs with decision-making and helps the real performance signals jump right off the page.

6. INTERPRET: translate the information into implication

Interpreting your performance measures means translating messages highlighted by performance information into conclusions about what’s really going on. To turn information into implication, you must discern which messages are real messages (and not all of them are!). If you’re in the habit of comparing this month to last month, or this month to a target, you’re probably drawing the wrong conclusions from your measures!

It’s the patterns, not the points, that we need to focus on with performance measures. And the PuMP Using Measures technique shows you which patterns to look for, what they mean, and how to respond to them so you don’t react to difference that aren’t real, and so you don’t miss the differences that are real.

7. APPLY: decide how implication will become action

When you have worked out what is really going on with your organisation’s performance, you are ready to make some decisions about what to improve, how much to improve it by and how to do that improving. And you want to steer clear of the typical traps people fall into when they are deciding how to respond to their performance measures.

The PuMP Using Measures technique helps you steer clear of traps like jumping to quick fixes that will fail, blaming results on things outside your control, and focusing too much on people rather than process improvement.

TAKING ACTION:
Where is your performance measurement process strong, and where is it weak? Flowchart the steps you take to select, collect, store, analyse, present, interpret and apply performance measures to find where you could get the biggest improvement in your measures for the least effort. Try this complimentary PuMP Diagnostic Discussion Tool to trigger a very insightful discussion with your colleagues.

Whether your data is quantitative (based on numbers) or qualitative (based on perceptions), it’s integrity depends on 5 widely recognised qualities.

Relevant

Make sure the data you have selected is directly appropriate to the purpose of the performance measure you selected it for. Be careful of data that seems interesting: it doesn’t mean it is relevant. Trying to gather more data than you really need, especially in surveys, can negatively impact on the other dimensions of data integrity (below).

–> Be ruthless and collect only the data you have a use for in monitoring and diagnosing performance.

Reliable

Collect enough data and collect it carefully to ensure that it is precise enough (especially if it is an estimate based on a sample) and continues to be precise enough as you collect it over time. Would you rely on one day’s rainfall to draw conclusions about annual rainfall? What about five days’ rainfall? How many days rainfall would you need to get a precise enough estimate of annual rainfall? And what would this depend on?

–> Design your sample sizes to give the reliability you need. Don’t guess.

Representative

It is important that the data you collect are observable events or characteristics that describe the full scope of what your performance measure is supposed to be measuring. This means that it is unbiased, or accurate enough. The last thing you need is for your data to tell you only what the “squeaky wheels” have to say, drowning out the valid and important and balancing views of the “well oiled wheels”. Squeaky wheels, volunteer surveys and easiest-ones-to-measure are examples of data sources unlikely to give you accurate enough data.

–> Define your population carefully, and select random samples to avoid bias.

Readable

Unless the data you collect is clearly defined, legibly presented, easy to organise for analysis, makes sense to its users and can be easily interpreted and understood by them, it won’t matter how relevant, representative or reliable it is. It just won’t be usable. The numbers need to be in a format you can use.

–> Design your data collection forms and questionnaires carefully to give you the data in the format your analysis needs.

Realistic

Trade off the degree to which your data is relevant, representative, reliable and readable with the level of resources you will need to invest to make it so. Make sure the value you get from using your data is greater than the effort you invested in getting it. Beware of the temptation to invest in sophisticated automatic data capture systems (such as bar-coding and voice recognition software) – if you haven’t got a simple manual system working well first, then these systems are likely to cost you much, much more than the savings they appear to promise.

–> Pilot test your data collection processes to be sure they will deliver cost-effective data.

TAKING ACTION:
If you have a performance measure or KPI that triggers more debate about data quality than it does about performance levels, then use the 5 Rs of data integrity to work out where the data collection process can be improved.

There are seven important performance signals you’ll want to look for, and be prepared to respond to when you see them:

Signal 1: Performance is unpredictable or chaotic

When performance is unpredictable you’ll see it fluctuating wildly with very large variability from week to week or month to month. This chaotic behaviour is symptomatic of a business process that is out of control because it lacks standardisation in the process steps or the inputs used. Don’t try to improve performance. You need to get it under control first.

Signal 2: Performance is worsening

Depending on your performance measure, worsening performance might be evidenced by an upward trend or shift, as in the case of Expenditure or Rework Hours, or by a downward trend or shift, as in the case of Customer Satisfaction or Profit. If you can pinpoint when the worsening in performance began, you have a better chance of finding out why, and taking successful action to turn the trend around.

Signal 3: Performance is stable and not changing

Performance values will always vary to some extent, and variation does not necessarily mean change. If your performance measure values are varying consistently within the same band or range, and you don’t see any values breaking away from this consistent but random pattern over time, the measure is signalling that nothing is changing. Sometimes that’s good, but it’s not good if you expect to see improvement.

Signal 4: Performance is improving, but not fast enough to reach the target

All improvement in performance is good, when it’s planned, but sometimes improvement is not big enough or fast enough to reach the planned targets. If the targets still matter, and your measure is signalling that the improvement rate won’t be fast enough to reach the target in time, you need to intervene.

Signal 5: Performance is improving at a rate fast enough that the target will likely be met

This is a good signal! That your measure is indeed tracking confidently toward its target level of performance is a great sign that your strategies and improvement projects aimed at achieving the target are working. But such signals are not a sure sign, because just as extraneous factors can cause a deterioration performance beyond your control, they can also cause an improvement in performance beyond your control too (just take the economy as an example in both cases). Check before you celebrate.

Signal 6: Performance has reached target

The best signal to get from your performance measures is that the target has been achieved. As with the signal of performance tracking confidently toward its target, this is a great sign that your strategies and improvement projects have worked. But again, such signals are not a sure sign, because of those extraneous factors outside your control. Check before you celebrate.

Signal 7: Performance has exceeded the target

Contrary to what you may think, exceeding a target is not better than meeting a target. It is a potential waste of resources and time that could have been better spent fixing more important performance shortfalls.

The best way to be sure you can see these signals in your KPIs and performance measures is to present them in a time series, using a line chart, with at least 20 historic values, and add your target as a point above the future date it should be achieved. Then you’ll have a clear view of what’s really happening with performance, and you won’t make those rash and wasteful decisions from drawing conclusions based on “this month to last month” comparisons.

TAKING ACTION:
Are your KPIs and performance measures displaying graphically in a way that can highlight these 7 important performance signals? If not, display your measures in a time series line chart, with at least 20 historic values, and add your target as a point above the future date it should be achieved. What insights does this give you about actual performance?

wrong ideas about KPIs and measurement?

Think about all the dysfunctional behaviours you’ve seen or heard people doing, in relationship to performance measures or KPIs: changing the way customer satisfaction is calculated to increase the percentage who were “satisfied”, leaving out excessively late or lost deliveries when recording on-time delivery data, arming themselves with every excuse under the sun about why revenue is under target.

It’s not because people are bad that they do these things. It’s because they have the wrong beliefs about performance measurement. They believe that KPIs or performance measures exist to judge them. They believe that performance measures are for reporting upward to management or external stakeholders. They believe that they have little to no control over the measures they are judged by.

These beliefs are held by frontline workers, middle managers, senior executives and even boards of directors.

So before you try and solve the problems of people not having the time to measure, not having the know-how to measure, not seeing the value in measuring, you first have to start different conversations about what performance measures are truly for.

Performance measures and KPIs are not to judge people, but to inform them. Performance measures and KPIs are not for reporting upward and outward, but for reporting within the team. Performance measures and KPIs are not for the results that people control, but for the results that they can influence.

Performance measures and KPIs are feedback to inform and empower and inspire people to do their best. That’s a message worth spreading.

TAKING ACTION:
Start new conversations about performance measurement in your organisation or company. Create your own “elevator speech” – a 60 second engaging and informative summary – for what performance measurement is really all about, in your own natural words. Challenge yourself to share it with at least 5 people each day, in natural conversation. Test and tune it until you get the response you want from them (which could be to ask you a question to get more information).