to prepare the route forward. To second guess the barriers the KPI team will need to cross and set out the major tasks they will need to undertake.
Naturally each implementation will reflect the organization's culture, future ready status, the level of commitment from the CEO and the senior management team, and the expertise of the in-house staff selected to run this project.
I have provided a PDF of templates to be read and used in conjunction with Key Performance Indicators, Developing, Implementing, and Using Winning KPIs, Third Edition. The location of the templates is indicated in the relevant chapter with this icon
Case Studies
To assist implementation I have further developed the lessons from KPI implementations I have been privileged to witness as an observer.
Common CSFs and their Relevant Measures
Although organizations need to go through the processes suggested in this book, I am always asked to give examples of common CSFs and their related performance measures.
In Chapter 17 I set out a table of common CSFs and the key result indicators (KRIs), result indicators (RIs), performance indicators (PIs), and some key performance indicators (KPIs) that would work.
Comparison to Other Methodologies
I have compared, in Chapter 18, the winning KPIs methodology to Kaplan and Norton's balanced scorecard, Stacey Barr's PuMP, and Paul Niven's balanced scorecard. I have also highlighted important sections of their work that the reader is advised to access.
Chief Measurement Officer Job Description
To aid KPI projects I have, with Dean Spitzer's help, set out a chief measurement officer's job description (see Appendix B). I firmly believe that KPIs will only truly function when an organization commits to establishing and assigning some in-house talent into the chief measurement officer's role.
Table of Performance Measures
As with earlier editions I have provided over 200 performance measures in a table (see Appendix E). This table is a listing of performance measures to help start this process off. It will be a valuable resource when looking at performance measures during workshop sessions.
Some of the performance measures in this list will be performance indicators (PIs), result indicators (RI), key performance indicators (KPIs), and key result indicators (KRIs). It is up to the KPI project team to ascertain in which of the four categories the final set of performance measures should be placed.
Leading and Selling Change
I have put much more effort in explaining this important area and have embraced John Kotter's work.7
A Greater Emphasis on the Sales Process
Many initiatives fail, not because they were not needed or meaningful, but because the hearts and minds of the senior management team, managers, and staff had not been engaged adequately. I have provided a full chapter (see Chapter 10) on selling from the preparation of an elevator speech to the compelling presentation to the senior management team. I have also included, in Appendix C, a section from my management book8 that covers over 25 tips to enhance “selling change” presentations.
PowerPoint Sales Pitches
To aid readers I have provided some free PowerPoint presentations on my website: KPI.davidparmenter.com/thirdedition.
Electronic Media Available
To support you implementing the strategies and better practices in this book, the following electronic media are available (some for a small fee):
● Webcasts and recorded presentations (see www.davidparmenter.com/webcasts). Some of these are free to everyone and some are accessed via a third party for a fee.
● A PDF of the checklists, draft agendas, questionnaires, and worksheets from chapters 8, 9, 10, 11, 12, 13 and 15 is available from (kpi.davidparmenter.com/thirdedition). The web site will refer to a word from a specific page in this book which you need to use as a password.
● The electronic versions of all the templates and most of the report formats, featured in the book, can be purchased from www.davidparmenter.com
Acknowledgments
I would like to acknowledge the commitment and dedication of Waymark Solutions staff members who helped me complete this and earlier editions, in particular Basil (diagram design) and Jennifer (proof reading). I thank my wife, Jennifer, who has been so understanding during my absences from family life when I was buried in my office finishing off another chapter.
I want to thank and acknowledge Dean Spitzer and Stacey Barr for their thought-provoking contribution to performance measurement. To the paradigm shifters who have influenced me greatly (Peter Drucker, Jim Collins, Jack Welch, Gary Hamel, Tom Peters, Robert Waterman, Jeremy Hope): I will always be deeply indebted.
I must also thank all those readers who, after reading this edition, decide to do something in their organization. I hope this book and accompanying templates help you leave a profound legacy. It is my fervent hope that together we can change the way leading organizations around the world, in all sectors, change the way they measure, manage, and improve performance for the benefit of all concerned.
Part I
Setting the Scene
Chapter 1
The Great KPI Misunderstanding
Overview
Many companies are working with the wrong measures, many of which are incorrectly termed key performance indicators (KPIs). It is a myth to consider all performance measures to be KPIs. This chapter explores how the four types of performance measures differ with examples of each type. The seven characteristics of KPIs are defined. The confusion over whether measures are lead or lag indicators is addressed. The questions How many measures should we have? and How many of each measure type? are answered. The importance of timely measurement is also covered.
Many organizations are working with the wrong measures, many of which are incorrectly termed key performance indicators (KPIs). I believe it is a myth to consider all performance measures to be KPIs. From my research over the past 25 years I have come to the conclusion that there are four types of performance measures. These four measures are in two groups: result indicators and
