Four Keys to Cascading Company KPIs to Individualsby Stacey Barr |
If safety, customer loyalty, cost reduction and innovation are important goals for the company, does that mean the KPIs of these goals should be cascaded to EVERYONE in the company? Should personal scorecards be “mini-me” versions of the corporate scorecard?
Cascading KPIs to individual people is not a trivial exercise. Consider safety. If reducing lost time injuries is a corporate goal, imagine what it would be like if everyone had to measure lost time injuries. What sense would that make? Does everyone in the organisation have the same impact on or exposure to lost time injuries? Is it the best use of everyone’s time to work to improve safety? Of course not.
Rather than over-simplifying the KPI-cascading process, follow these four keys to make sure that what gets measured at the individual level is meaningful to the individual at the same time as having a strong “line of sight” to corporate goals:
Key #1: Don’t cascade by duplicating the KPI, cascade by building the cause-effect chain of goals.
If a corporate goal is loyal customers, then ask “what makes customers loyal?” to determine the first level of cascading. You might end up with things like attracting more ideal customers, keeping promises to customers, and solving customers real problems. Cascade to the next level (say, teams), by asking “what makes it possible to attract more ideal customers?” Keep this line of questioning until you reach individuals and their contribution to the cause-effect chain.
Key #2: Only cascade to where it counts, to where there is highest leverage to achieve the corporate goal.
Only a few parts of the organisation will truly have a worthwhile impact on a corporate goal. Operations generally has the biggest impact on safety and timely delivery, for example. Marketing generally has the biggest impact on which customers the organisation attracts. Keep asking “where is the greatest leverage?”
Key #3: Document the cascading cause-effect links, to build a map or story of the organisation’s strategy.
It will make it easier to test the logic of cause-effect, and to communicate throughout the organisation what matters and why. Maps bring everything together, so you can see the whole, not just the parts. And you can start seeing something more than the cascading – you can see the collaboration! A PuMP Results Map is the perfect technique for documenting the cascading.
Key #4: Involve people in the process of determining their “line of sight” to corporate goals.
We find the most meaning in things we take part in discovering and creating. People throughout your organisation will not only have the best idea of how they contribute to company goals, but they will also have many times better buy-in if they take part in the cascading process.
It’s important for each person in an organisation to see how they contribute, either to the strategic direction or to the organisation’s purpose for existing. But when it comes to KPIs, don’t measure deeper than the team level. There are all kinds of problems if you measure individual people. We want them to feel connected to achieving goals, not judged by hitting KPI targets.
I love this, but can I have the details? Aligning strategic plan of an organization with the Country’s national agenda and Cascading KPIs to Departments/Units.
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