KPI Design

The Units Mixup That Cost $328m

On December 11th 1998 NASA launched the Mars Climate Orbiter. The probe was designed to measure water distribution on the surface of Mars.  286 days later the $328 million probe arrived at Mars, missing the correct orbit by 100km. The probe dipped into the atmosphere, overheating the engine system. The probe crashed into the surface…

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Designing Performance Indexes. The ‘Nuts and Bolts’ Part 2

a Boy looking at math problem and think in it

Designing Performance Indexes I talked about when you should, or should not, use a Performance Index in Part 1. If you have decided to go ahead this article gives you some practical advice on designing performance indexes. Working out what to include Less is definitely more with Indices. Some, like the FTSE 100, can accommodate large numbers of inputs…

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Need to Keep Your KPIs REALLY Simple? The KPI Index – Part1

How a KPI Index saved my email newsletter… sort of After shying away from sending out a regular newsletter for far too long, I decided to get to grips with my newsletter software a few weeks ago. If you have ever sent out newsletters by email you will know that a serious challenge is getting…

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Process KPIs, the pain-free way

Some KPIs are obvious, but important… When it comes to choosing some KPIs,  careful thought may be needed to align them with strategy (see this article on why you should use KPI Trees to do this). Other measures are in the ‘obvious but important’ camp. In process and production environments it’s fairly safe to say that we care about…

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Choosing KPIs the right way

Small Large Comparison Fish Too Small Goldfish Fishbowl. Envy can drive poor KPI choices

I used to be a bit of KPI purist. I would argue that you must build your KPI selection from ‘scratch’ as your KPIs must reflect your strategic objectives and you should never ‘borrow’ another organisation’s strategic objectives. Having spent a lot of time actually creating KPIs for organisations I have softened a little on…

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Tree Diagram Tools: Tips and App Reviews

A chainsaw, not the recommended Tree Diagram tools

When I build KPI Trees with clients, one of the trickiest practical problems is which tree diagram tools to use to create and share those trees. Anyone who has built a tree knows that they can quickly become difficult to fit on a page, read and share. Things to consider when choosing your KPI Tree Diagram…

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Accurate KPIs, Van Halen and brown sweets.

Accurate KPIs and a bowlful of M and Ms have more in common than you might think

How do you know if you are looking at accurate KPIs, reports or dashboards? Perhaps we can learn a lesson from rock legends Van Halen. A copy of their 1982 tour rider makes for interesting reading. It’s 53 pages long and contains some very specific requirements, including: Two dozen English muffins Six bars of soap Six…

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Why Finance should not own (all) your KPIs

A point to make is that KPIs are not just financial measures. Financial measures are crucial in many organisations, but they are also `lagging’ – which means they tell you what happened after the event. KPIs should also help you see what is coming, not just what has passed. It’s like the difference between a…

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KPI definition. What is a KPI?

It’s tempting to over-complicate things when you try come up with a KPI Definition. The literal meaning is `key performance indicator’. Just knowing what the initials stand for is not that helpful. So what does it really mean? Key means it… ‘provides a means of achieving or understanding something’. Performance means… `a particular action, deed, or…

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