Posts Tagged KPI

smartKPIs.com Performance Architect update 37/2011

smartKPIs.com - a year in review

The end of June marks in Australia the end of the financial year, a time to evaluate the past 12 months and reconfirm the plans for the next 12 months. In terms of growth, smartKPIs.com figures speak for themselves:

  • 6500 KPI examples documented;
  • 1034 KPIs in Practice reports analyzed and cataloged;
  • 410 Blog posts written;
  • 40 Example of organizational objectives listed;
  • 36 iKPI profiles developed;
  • 21 Performance Panorama interviews published.

Enabling these results are thousands of hours our research team spent on researching and analysing tens of thousands of performance management resources. The insights gained as part of this work were captured in a series of premium products launched over the last few months:

  • smartKPIs Premium, containing 1500 KPI examples documented in over 30 fields;
  • The Top KPIs of 2010 series of research reports, with 17 launched so far outlining over 400 KPI examples, proved to be the most popular with members of the smartKPIs.com community in 2010;
  • smartKPIs.com pre-populated templates, containing 24 products supporting the deployment of KPIs in organizations through scorecards, dashboard and entire performance management systems.

Over the year, members of the smartKPIs.com team travelled for research, conferences or workshop facilitation in Australia, England, Lebanon, Malaysia, Qatar, Romania, Scotland, UAE and Vietnam, reconfirming the commitment to learn from practice, integrate academic rigour/insights and deliver practical solutions.

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smartKPIs.com Performance Architect update 4/2010

The case for using a Performance Management Glossary

Some of the most asked questions in performance management discussions, either online or during conversations are:

  • What is the difference between a mission and a vision?
  • What is a KPI? How is it different from a measure?
  • What is the difference between Key Success Factors and Key Results Indicators?

They are generally centered on clarifying terms such: Mission Statement, Vision Statement, Goal, Objective, SMART Objective, Critical Success Factor (CSF), Value Driver, Key Result Indicator (KRI), Metric, Performance Measure, Performance Indicator, Key Performance Indicator (KPI), Initiative and Milestone.

It is a positive thing to ask such questions and engage in discussions to clarify them. It is surprising how many different views are expressed on the similarities or differences between these terms.

What is interesting is that generally such discussions take place outside organizational boundaries. It is as if within organizations it is expected that staff have an understanding of them. Or as if such discussions are intentionally avoided within organizations.

The logical deduction is that if such discussions take place outside organizational boundaries, staff still have a need to clarify such concepts that is not fulfilled internally.

While this cross-polenization of opinions helps in building an informed view at individual level, in an organizational context things are different. While diversity of views is welcomed, a united common understanding of key terms used across the organization enables good internal communication. It also helps in understanding strategy and the contents of performance management reports.

However, glossaries of terms are rather the exception than the norm in the use of performance management systems. This is rather surprising considering that the expected benefits to effort ratio is one of the highest of all the components of a system.

The possible benefits of using them are:

  1. Conceptual clarity – Facilitate a clear understanding of the nuances of the cluster of performance management concepts
  2. Alignment of corporate vocabulary – Provide a single point of reference to clarify terminology used across the organization
  3. Building perspective - Paints a rich picture of available elements to be used as part of the performance management system and raise questions about the relationship between them.

The effort should be minimal as generally such glossaries average 50-80 terms, with 1-2 paragraphs of explanation each.

One of my favorite examples illustrating the importance of clarifying concepts through a glossary is the TOGAF 9 manual, containing The Open Group Architecture Framework (The Open Group, 2009). In version 8.1.1 of the manual, the glossary was a component of the Resource Base (additional to the manual itself). In the latest edition (9), the glossary is incorporated in Part 1: Introduction. It represents the third chapter of this part, following the Executive Overview (Chapter 1) and the clarification of core concepts (Chapter 2). The glossary is not considered an appendix anymore, but an important component of the manual, included in the introduction part, to facilitate the understanding of the rest of the manual.

Perhaps performance management implementations should have a similar approach, by considering the glossary not a nice to have, but a key initial step.

Ultimately, not what is written matters, but what and how is understood and used. However, every little bit of help in building clarity and alignment helps. While strategy management is compared to a safari in a savanna (Mintzberg et al, 2005), finding one’s way in performance management is more like an expedition in a jungle. The abundance of theories, frameworks, concepts and terms is much denser and requires a wider skill set to navigate. Performance Management glossaries have the potential to act as attenuators in reducing complexity. Ultimately it is all about getting smarter as the level of complexity increases.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan
Performance Architect,
www.smartKPIs.com

References

Mintzberg H., Lampel J., Ahlstrand B., (2005), Strategy Safari: A Guided Tour Through The Wilds of Strategic Management, London, UK, Financial Times-Prentice Hall
The Open Group (2009), “TOGAF version 9“, Van Haren Publishing, Zaltbommel

smartKPIs.com Performance Architect update 3/2010

Performance Management IQ Test or a hermeneutic dialectic process

A new feature available on http://www.smartKPIs.com starting with this month is the smartKPIs Performance Management IQ test.

It consists of a set of 24 statements that appear on the screen one at the time. The task on hand is to decide what each of these statements represents from a set of 12 options:

  1. Mission Statement
  2. Vision Statement
  3. Goal
  4. Objective
  5. Target
  6. SMART Objective
  7. Critical Success Factor (CSF) / Value Driver
  8. smartKPI / Key Result Indicator (KRI)
  9. Metric / Performance Measure / Performance Indicator
  10. Key Performance Indicator (KPI)
  11. Initiative
  12. Milestone

Only one option can be selected as there should be only one option closest to the way the statement is understood and perceived.

The term “IQ test” is pretentious and used to illustrate that being smart in performance management transcends the mechanistic approach of being right or wrong. Having this in mind, the test should be used more as a guide to discover the rich diversity of views on how key terms are or should be used in performance management. Overall the test should be a fun way to rediscover the basics of a performance management glossary. Ideally it should also raise questions about what actually happens in practice, away from the prescribing nature of management books, academic articles and management consultant’s opinions.

To me there are three key learning points illustrated by the test:

1. Performance Management as a discipline contains elements that closely link it to a multitude of other disciplines and organizational capabilities: Strategy Management, Project Management, Human Resources Management, Accounting and Psychology, to name a few. Understanding such linkages and the origins of key terms are an important step in building a robust basis for architecting organizational performance.

2. The popular understanding and perception of certain terms in practice may be very different compared to academic and consultant’s viewpoints. What matters in the end is how such concepts are used in practice to generate value and not necessarily which is the “perfect” definition of what a KPI is.

As Stringer (2007) put it: “Constructions are created realities that exist as integrated, systematic, sense-making representations and are the stuff of which people’s social lives are built. The aim of inquiry is not to establish the truth or to describe what really is happening but to reveal the different truths and realities – construction – held by different individuals and groups. Even people who have the same facts or information will interpret them differently according to their experiences, worldviews and cultural backgrounds.”

3. Have an open mind in terms of rediscovering performance management through the lens of various viewpoints and be prepared to change perspectives or shift entire paradigms. According to one view, by completing the smartKPIs Performance Management IQ test you have completed a test and reviewed different opinions on specific topics. From another viewpoint (Guba and Lincoln, 1989), you have just completed a hermeneutic dialectic process, as new meanings emerge as divergent views are compared and contrasted.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan
Performance Architect,
www.smartKPIs.com

References

Stringer, E. T. (2007) “Action Research, 3rd Edition“, Thousand Oaks, CA, Sage Publications.
Guba, E. G. and Lincoln, Y.S. (1989), “Fourth generation evaluation“, Newbury Park, CA, Sage Publications.