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    Winning With the Right KPIs
    Winning With the Right KPIs
    Winning With the Right KPIs
    Ebook169 pages1 hour

    Winning With the Right KPIs

    By Peter Geelen

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    About this ebook

    A common pitfall for organisations is that they – albeit often unknowingly and with the best intentions – create barriers for a successful execution of their strategy by implementing Key Performance Indicators (or KPIs). This comes at the expense of customers and fixing the mistakes takes a lot of time, effort, and money. KPIs don't generate the desired performance improvement and the daily delusions continue to rule the organisation. But working with KPIs can have a different result.

    In Winning With the Right KPIs, iPM founder and former Performance Manager at Philip, Peter Geelen shares practical insights to use KPIs effectively and describes an innovative approach that has been battle-tested and proven successfully in practice. You learn how to set up KPIs that really do improve collaboration, customer value and customer service, and give you buttons you can truly press to realise the ambitions, goals, and dreams of your organisation.

    LanguageEnglish
    PublisherVakmedianet Management BV/Mgmt Impact Publishing
    Release dateAug 5, 2020
    ISBN9789462764002
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      Book preview

      Winning With the Right KPIs - Peter Geelen

      AUTHOR

      INTRODUCTION

      Organisations expect to perform better when they implement Key Performance Indicators (KPIs). In practice, however, this is disappointing. I myself have experienced how KPIs can have a negative impact on the performances of employees, teams, and even the organisation as a whole. Negative effects that are caused by making false starts in the design and the use of KPIs. The biggest mistake made is translating the indicators using the organisation chart. Within organisations, islands are created that do not cooperate with each other. KPIs evolve into control instruments that encourage undesirable behaviour, and it ends in a big accountability mess that no one wanted.

      I was bewildered by these mistakes and, in response, I developed a new performance management approach in early 2000, an approach that I have called integral Performance Management (iPM®) and in which setting up a well-functioning KPI structure is an important starting point.

      In earlier publications I explained how the iPM method works in practice. iPM is an integral approach with a lot of attention to process improvement, team development, leadership, and collaboration. KPIs form the foundation. In this book, we reveal this foundation and guide you through the correct design and use of KPIs. With a case study (see the appendix for the organisation chart) and practical examples, you will see why KPIs do not generally deliver what is expected of them and you will learn how it can be done differently. Following the tips and tricks, you will create a winning KPI structure for your organisation. Based on this structure, we will show you how you can effectively manage and improve with KPIs that do not prevent but rather encourage collaboration.

      This book is of interest to everyone who must deal with KPIs (and who isn’t dealing with KPIs nowadays?) in both public and private organisations, whether you are a director or manager who wants to manage more effectively or a colleague who wants to demonstrate that things can be done differently. It will also be of value to those who want to know more about how to start an iPM programme.

      My mission is to make organisations perform better. I expect that this book will contribute to that goal. It was written in collaboration with my colleague Luc van Sas. I also would like to thank my daughter Sanne, my colleagues Fred Vijvers and Joost Bijlsma for their positive contributions. I would like to express special thanks to the directors and executives who helped to shape this book.

      I am convinced that your organisation will be more successful through a KPI structure based on iPM that stimulates collaboration.

      Peter Geelen

      iPM Partners B.V.

      This easy to read book explains clearly why organisations encounter problems turning strategy into reality and what an important role performance indicators play in this transition and implementation. Pleasant and important reading for anyone who doesn’t want to get caught up in the daily delusions and does not want to lose sight of the customer!

      Rob Scholte, former Executive Board and Board Member at Metro, Goodyear, Nestlé, and Unilever.

      DON’T MAKE

      A FALSE START

      WITH YOUR KPI

      PROGRAMME

      1

      It’s Thursday and the eHomes management team will convene in ten minutes for the weekly meeting. Vince, the general manager, isn’t happy with yesterday’s kick-off. The launch of the KPI programme was not well-received. That’s annoying, because the management team worked hard on the new strategy for several months and everyone seemed to be on the same page.

      eHomes has achieved a number of technical breakthroughs in the past two years. A leading position in the market is now a real possibility. The organisation has the technology at its fingertips to create an intelligent home for everyone. The latest technology makes it possible to create the house of the future and rebuild existing houses at affordable prices. That’s a genuine breakthrough and that’s how the company can differentiate itself from the competition. The new direction and ambitions are summarised in the strategic plan for eHomes for the next few years.

      In order for all employees to be part of the new strategy, the management team decided to start a programme. ‘If we want to get 250 people aligned on the new course, we have to measure whether we are making progress’, was the idea. ‘Let’s use KPIs for that. Translating strategy to the work floor, right? Translating the new ambitions into tangible objectives and KPIs. Making performance transparent and creating focus.’

      The management team was unanimous about who should lead the KPI programme. That was Martin, the Financial director. When it comes to numbers, he’s your guy and he also takes care of the financial key figures.

      But Martin quickly ran into problems during the kick-off session. It was not clear to employees why the management team started the KPI programme and Martin was not able to explain it very well. He had no good answers for questions like: ‘Why do we need KPIs? We’re already transparent!’ and ‘I tell you everything you need to know, and if you think I’m not doing it right, you just ask me’.

      Food for thought. Management had to come up with a different pitch.

      The example of eHomes is by no means unique. Managers develop an adapted or new strategy. They start an implementation programme and want to monitor progress. The objectives and ambitions at the strategic level are translated to the work floor. They need clear information with which they can manage and improve the organisation. This management information should visualise how things are progressing. It gives management the possibility to press the buttons when things go wrong. When management information is focused too much on its financial performance, many organisations must start to measure other things, using Key Performance Indicators (KPIs).

      Organisations that want to work with KPIs can choose from various methods for implementing KPIs and translating them to the work floor. But: What would really work? How do you define the right objectives and KPIs? What buttons can you really press? And how to foster enthusiasm among employees and improve the way departments cooperate?

      In any case, your KPI programme – i.e. bringing your strategic objectives and ambitions to life – does not start with KPIs and words such as transparency and focus. Consider objectives and KPIs as the means to get where you want to be. Your goal is not to have KPIs, your goal is realise the new ambition and the dream of your organisation. The ‘why’ according to Simon Sinek (2011) or the profound underlying ‘purpose’. Start your KPI programme, or any type of programme you can come up with, with the dream behind it and the change that is needed to realise the dream.

      eHomes has such a dream. The management team is enthusiastic about its latest products and wants to use them to get ahead of the competition. The strategy will determine the route. It’s a beautiful, positive dream that can be translated into a ‘why’ or ‘purpose’, such as safety, convenience, and comfort for as many households as possible. eHomes is not there yet and will have to make several changes successfully in order to realise its

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