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How to make your
KPIs meaningful
© Mark Hocknell 2017 How to make KPIs meaningful
CMO Sydney July 20 2017
Overview • Customer Centric approach to Business
• An approach to performance measurement
• Making Strategy Measurable
• Measure Selection
• Top Four Problems with how we use KPIs
© Mark Hocknell 2017 How to make KPIs meaningful
The Customer Centric approach to Business
Reject the industrial age models and structures that are now superseded
How to make KPIs meaningful © Mark Hocknell 2017
Customer Centric Business • Early commerce was relationship based • Industrial age focused on making things – production and
distribution
• Today: – Digital Age – Relationship Age – Connection Economy – Experience Economy
How to make KPIs meaningful © Mark Hocknell 2017
This signals a change. We can’t keep using the industrial age
business models and thinking.
The customer centric approach to business is matched to this new age.
The 5 Tenets of the Customer Centric approach to Business
1. Businesses exist for customers
2. It’s all about people
3. Not all customers are equal
4. Businesses are systems that deliver value
5. The need for progressive
improvement
How to make KPIs meaningful © Mark Hocknell 2017
Cust
omer
Val
ue
B X C
===
PuMP – The Performance Measurement Process
An approach to measuring organisational performance
How to make KPIs meaningful © Mark Hocknell 2017
Stacey Barr and PuMP • Performance measure specialist • Creator of PuMP • Author of:
– Practical Performance Measurement: Using the PuMP Blueprint for Fast, Easy, and Engaging KPIs
– Prove It! How to create a high-performance culture and measurable success.
• Blog at www.staceybarr.com
• PuMP is used and delivered around the world through a network of PuMP Partners
How to make KPIs meaningful © Mark Hocknell 2017
• What is your biggest struggle or challenge with performance measurement..?
How to make KPIs meaningful © Mark Hocknell 2017
It’s your approach to performance measurement that causes your struggles
with measuring performance.
Practical Insight #1
The Anatomy of a Performance Measurement Approach
steps frameworks templates tools
The PuMP Performance Measure Blueprint STEP 2 STEP 1 STEP 3 STEP 4
STEP 5 STEP 6 STEP 7 STEP 8
Understanding
Measurement’s
Purpose Fixing the focus firmly on
continuous improvement as
the purpose for measurement.
Mapping
Measurable
Results Translating our strategy into
clear, focused, and measurable
performance results.
Designing
Meaningful
Measures Choosing the most feasible
and relevant measures that
evidence our performance
results.
Building Buy-In
to Measures Getting ownership from our
stakeholders, quickly, easily and
engagingly.
Implementing
Measures Documenting in detail the
data, analysis and reporting
requirements for each of our
measures.
Interpreting
Signals from
Measures Focusing ourselves on gaps
between as-is and to-be
performance.
Reporting
Performance
Measures Creating useful and usable
performance reports that
inspire us to action.
Reaching
Performance
Targets Improving business processes
to move as-is performance
toward to-be.
> > >
> > >
How to make KPIs meaningful © Mark Hocknell 2017
Performance measurement is a process, not an event. There are essential steps to make it easier, faster, more meaningful and more
engaging.
Practical Insight #2
The PuMP Performance Measure Blueprint STEP 2 STEP 1 STEP 3 STEP 4
STEP 5 STEP 6 STEP 7 STEP 8
Understanding
Measurement’s
Purpose Fixing the focus firmly on
continuous improvement as
the purpose for measurement.
Mapping
Measurable
Results Translating our strategy into
clear, focused, and measurable
performance results.
Designing
Meaningful
Measures Choosing the most feasible
and relevant measures that
evidence our performance
results.
Building Buy-In
to Measures Getting ownership from our
stakeholders, quickly, easily and
engagingly.
Implementing
Measures Documenting in detail the
data, analysis and reporting
requirements for each of our
measures.
Interpreting
Signals from
Measures Focusing ourselves on gaps
between as-is and to-be
performance.
Reporting
Performance
Measures Creating useful and usable
performance reports that
inspire us to action.
Reaching
Performance
Targets Improving business processes
to move as-is performance
toward to-be.
> > >
> > >
How to make KPIs meaningful © Mark Hocknell 2017
Why strategy is so hard to measure
• Action orientation
• Weasel words & vague ideals
• Multi-focus goals
• Confusion with business as usual
• Lack of rigour and logic Too fluffy to measure.
How to make KPIs meaningful © Mark Hocknell 2017
How to de-weasel: Strengthen student engagement and learning
outcomes
• strengthen: get more
More students participate in learning activities and
find work in their field of study
• engagement: participation in learning activities • learning outcomes: grades and ability to find
work in field of study
Two Results
More students participate in learning activities
More students find work in their field of study
Results Mapping • Provides a
framework for Results and Measures
• Results and Measures can be seen in the context of the business – interdependencies and other relationships
If you cannot understand a goal or objective well enough to visualise
what it looks like when it’s happening, you won’t be able to
measure it.
Practical Insight #3
The PuMP Performance Measure Blueprint STEP 2 STEP 1 STEP 3 STEP 4
STEP 5 STEP 6 STEP 7 STEP 8
Understanding
Measurement’s
Purpose Fixing the focus firmly on
continuous improvement as
the purpose for measurement.
Mapping
Measurable
Results Translating our strategy into
clear, focused, and measurable
performance results.
Designing
Meaningful
Measures Choosing the most feasible
and relevant measures that
evidence our performance
results.
Building Buy-In
to Measures Getting ownership from our
stakeholders, quickly, easily and
engagingly.
Implementing
Measures Documenting in detail the
data, analysis and reporting
requirements for each of our
measures.
Interpreting
Signals from
Measures Focusing ourselves on gaps
between as-is and to-be
performance.
Reporting
Performance
Measures Creating useful and usable
performance reports that
inspire us to action.
Reaching
Performance
Targets Improving business processes
to move as-is performance
toward to-be.
> > >
> > >
How to make KPIs meaningful © Mark Hocknell 2017
Badly written measures look like these:
• Milestones: ‘student learning outcomes analysis complete by Dec 2014’
• Activities: ‘gather ideas from students to improve the learning experience’
• Data sources: ‘Student Survey’
• Vague names: ‘Student Engagement’
How to make KPIs meaningful © Mark Hocknell 2017
What is a performance measure, really?
How to make KPIs meaningful © Mark Hocknell 2017
Therefore a KPI is...
A performance measure + a target
How to make KPIs meaningful © Mark Hocknell 2017
Student Participation Rate = The percentage of students who participated in learning activities, by week
Target = 85%
How to make KPIs meaningful © Mark Hocknell 2017
Data driven perspective of KPIs • GoS - 90% calls answered in 60 seconds • AHT – average handle time is 360 seconds • Average talk time • Post call processing time
Result or Outcome perspective of KPIs
Our customers have a great experience
Our customers love our service
• Average experience score from CX survey • Average score to the Q: I love the service provided by the contact centre • Call quality • Schedule adherence
What’s my focus..?
What’s my focus..?
The Top Four Issues with how KPIs are Used
1. We use gut-feel to choose KPIs
2. KPIs don’t signal priority areas, or what is really important
3. KPIs used to manage or reward people
4. We use KPIs to mix BAU with areas for improvement
How to make KPIs meaningful © Mark Hocknell 2017
What is accountability..? • “Monitoring performance + interpreting
performance + initiating action = accountability.
• Accountability is not hitting targets, it's pursuing them deliberately.”
Stacey Barr
How to make KPIs meaningful © Mark Hocknell 2017
What next... • Stop relying on the bad habits and adopt good practices in
measuring performance
• Visit: www.staceybarr.com - heaps of free resources
• Blueprint Workshops – Sydney Sept 5-7 2017
• In-house workshops / bespoke solutions
• Customer Centric Business newsletter
• Contact me: [email protected]
How to make KPIs meaningful © Mark Hocknell 2017