An in-depth look at how to create and use key performance indicators (KPIs), from the King of KPIs -- now updated and expanded! By exploring measures that have transformed businesses, David Parmenter has developed a methodology that is breathtaking in its simplicity and yet profound in its impact.
Now in an updated and expanded Second Edition, Key Performance Indicators is a proactive guide representing a significant shift in the way KPIs are developed and used, with an abundance of implementation tools, including: * The four foundation stones that lead the development and use of KPIs * A 12-step model for developing and using KPIs with guidelines * A KPI resource kit including worksheets, workshop programs, and questionnaires * A new and pragmatic approach to finding critical success factors * Over 300 performance measures * Implementation variations for small to medium enterprises and not-for-profit organizations * New implementation short cuts * How to brainstorm performance measures * Templates for reporting performance measures * A resource kit for a consultant who is acting as a coach / facilitator to the in-house project team Now including a discussion of critical success factors, as well as new chapters that focus on implementations issues and 'how to sections' on finding your CSFs and brainstorming the performance measures that report progress within the CSFs, Key Performance Indicators, Second Edition will help you identify and track your organization's KPIs to ensure continued and increased success.
Table of Contents
Preface ix Acknowledgments xix CHAPTER 1 Introduction 1 Key Result Indicators 2 Performance and Result Indicators 3 Key Performance Indicators 4 Management Models that Have a Profound Impact on KPIs 16 Definitions 24 Notes 27 CHAPTER 2 Foundation Stones for Implementing Key Performance Indicators 29 Four Foundation Stones Guiding the Development and Use of KPIs 29 Defining Vision, Mission, and Strategy 37 Note 39 CHAPTER 3 Developing and Using KPIs: A 12-Step Model 41 Step 1: Senior Management Team Commitment 41 Step 2: Establishing a Winning KPI Project Team 51 Step 3: Establishing a "Just Do It" Culture and Process 55 Step 4: Setting Up a Holistic KPI Development Strategy 62 Step 5: Marketing the KPI System to All Employees 67 Step 6: Identifying Organization-Wide Critical Success Factors 74 Step 7: Recording Performance Measures in a Database 74 Step 8: Selecting Team-Level Performance Measures 77 Step 9: Selecting Organizational Winning KPIs 86 Step 10: Developing the Reporting Framework at All Levels 88 Step 11: Facilitating the Use of Winning KPIs 96 Step 12: Refining KPIs to Maintain Their Relevance 101 Notes 105 CHAPTER 4 KPI Team Resource Kit 107 Using This Resource Kit 107 Step 1 Worksheet: Senior Management Team Commitment 108 Step 2 Worksheet: Establishing a Winning KPI Team 115 Step 3 Worksheet: Establish a "Just Do It" Culture and Process for This Project 119 Step 4 Worksheet: Setting Up a Holistic KPI Development Strategy 122 Step 5 Worksheet: Marketing the KPI System to All Employees 125 Step 6 Worksheet: Identifying Organization-wide CSFs 132 Step 7 Worksheet: Comprehensive Recording of Measures within the Database 132 Step 8 Worksheet: Selecting Team Performance Measures 133 Step 9 Worksheet: Selecting Organization-wide Winning KPIs 141 Step 10 Worksheet: Developing Display, Reporting, and Review Frameworks at All Levels 143 Step 11 Worksheet: Facilitating the Use of KPIs 146 Step 12 Worksheet: Refining KPIs to Maintain Their Relevance 146 CHAPTER 5 Templates for Reporting Performance Measures 155 Reporting Key Result Indicators in a Dashboard to the Board 155 Reporting Performance Measures to Management 163 Reporting Performance Measures to Staff 169 Graph Format Examples 172 Notes 184 CHAPTER 6 Facilitator's Resource Kit 185 Remember the Fundamentals 185 KPI Typical Questions and Answers 187 CHAPTER 7 Critical Success Factors Kit 199 Benefits of Understanding Your Organization's CSFs 200 Relevant Success Factors 204 Step 6: Identifying Organization-wide Critical Success Factors 205 Finding the CSFs through a Relationship Mapping Process 212 How I Organize the Critical Success Factor Workshop 213 Note 222 Appendix 7A: Where to Look for Your Success Factors 222 Appendix 7B: Letter Invite from the CEO 224 Appendix 7C: Success Factors Workshop Planning Checklist 225 Appendix 7D: Workshop Instructions 227 Appendix 7E: Success Factor Matrix 233 CHAPTER 8 Brainstorming Performance Measures 241 CHAPTER 9 Implementation Variations for Small-to-Medium Enterprises and Not-for-Profit Organizations 243 Small-to-Medium Enterprises 243 Not-for-Profit Organizations 246 CHAPTER 10 Implementation Lessons 253 How to Implement Winning KPIs in 16 Weeks 253 Notes 265 Epilogue: Electronic Media Available to You 267 Appendix: Performance Measures Database 269 Index 295
David Parmenter is an international presenter who is known for his thought-provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in the development of winning KPIs, replacing the annual planning process with quarterly rolling planning, quick month-end processes, and converting reporting to a decision-based tool. Parmenter's work on KPIs is recognized internationally as a breakthrough in understanding how to make performance measures work. He has delivered workshops to thousands of attendees in many cities around the world including Sydney, Melbourne, Kuala Lumpur, Singapore, Tehran, Johannesburg, Dublin, London, Manchester, Edinburgh, and Prague. Parmenter has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and PricewaterhouseCoopers, and is a fellow of the Institute of Chartered Accountants in England and Wales. He is a regular writer for professional and business journals. He is also the author of Pareto's 80/20 Rule for Corporate Accountants (Wiley). David can be contacted via firstname.lastname@example.org. His website www.davidparmenter.com contains many white papers, articles, and freeware that will be useful to the reader.