KPI’s (Key performance indicators) are a vital part of your Strategy Execution system. We should probably take a closer look at the three magic letters and see what they contain:
K – Key – remember only the important – the “key” – the few. I see many companies going into the KPI trap and measuring everything that moves. All things that “move” are subjects for measuring, but the question is still the same: is it the KEY? And KEY to what? Is it the Key to see that you are executing your strategy well?
P – Performance – are we trying to find out about the Performance? Or are we just gathering statistics, counting, and collecting all meaningless data?
I – Indicator – are we aware that what we are presenting as KPI’s are just indications? If it was the “full truth” it would have been another abbreviation – KPT – Key performance Truth. But we are not trying to tell the “full and only truth”. We are like doctors, only trying to make indications – good indications. If people say to me “this KPI is not measuring the 100% truth”, I agree with them. It will tell them what the “I” is representing, and moves on from that. This makes the conversation between employees and managers much easier.
Good luck with your KPI selection and don’t forget the three important letters K,P,I.