SMART KPIs

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SMART KPIs
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Characteristics of good KPIs

• 1. Simple
• 2. Practical
• 3. Specific
• 4. Measurable
• 5. Attainable
• 6. Relevant
• 7. Time-bounded
• 8. Dynamic
  
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• Simple
• easily understandable and not sophisticated
• Practical
• easily workable and get to the point
• Specific
• Reduce expense is definitely not specific
  KPIs should
• detail what expense specifically to be
  reduced, electric
• or traveling expense or.etc.
• Measurable
• From previous example KPIs must also be
  specified the target of the reduction, such as
  reduce electric bills down10.
• Attainable
• KPIs must be attainable and also
  challenging. If target is set too low or too
  high staff may be de-motivated.
• Relevant
• KPIs must be relevant to Organization
  targets so everyone is heading to the same target
  same direction
• Time-Bounded
• Indicate when the target should be reached
  so staff know how much time they have.
• Dynamic
• change overtime and benchmarking
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Classification of KPIs

• Efficiency / Effectiveness
• Common / Corporate / Functional
• Positive / Negative
• Balanced Scorecard
• 4.1 Lag indicator / Lead indicator
• 4.2 Financial Perspective / Customer
  Perspective/
• Internal perspective / Learning
  Perspective /
• Growth Perspective
• 5. Value Chain
• 6. Strategic /Non-Strategic
• (Technical or Administrative)

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The Generic Value Chain
FIRM INFRASTRUCTURE
M
HUMAN RESOURCE MANAGEMENT
Support activities
A
TECHNOLOGY DEVELOPMENT
PROCUREMENT
R
G
OUTBOUND LOGISTICS
MAKETING AND SALES
SERVICE
OPERATIONS
INBOUND LOGISTICS
I
N
PRIMARY ACTIVITIES
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Productivity

• Efficiency
• Quality-Uniqueness

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Strategic Positioning
Cost
Differentiation

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Relationship

• KPI
• Target
• Benchmarking
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Benchmarking

• Competitive
• Non Competitive
• Internal
• Generic (best practice)
• 
  

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Strategic Planning and KPIs
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VISION
SWOT
SWOT
MISSION
Objective
Strategy
Action Plan
SWOT
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MISSION
SWOT
SWOT
Objective
Strategy
Action Plan
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SWOT
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Cases in Vision and Mission
Case 1 New Port News Shipbuildings Mission
Statement
We shall build good ships here at the profit
if we can at the loss if we must but always
good ships.
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Case 2 Maytag Corporations Mission
To improve the quality of home life by
designing, building, marketing, and
servicing the best appliances in the world.
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Case 3 Harley Davidsons Vision and Mission

Vision Harley Davidson,Inc. is
an action-oriented,international company, a
leader in its commitment to continuously
improve our mutually beneficial relationships
with stakeholders customers,
suppliers,employees, shareholders,
governments and society We believe the key to
success is to balance stakeholders interests
through the empowerment of all employees to focus
on value-added activities.
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Case 4 ??????????????????????????.
VISION The leading petroleum exploration and
production company with operational excellence,
international best practices, and world-class
competitive strengthsMISSIONTo conduct our
core business by operating and investing in
petroleum exploration, development, production,
and strategic related business in Thailand and
overseas
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Case 5 Starbucks Mission Statement
Establish Starbucks as the premier purveyor of
the finest coffee in the world while maintaining
our uncompromising principle while we grow

• Six Guiding Principles
• Provide a great work environment and treat each
  other with respect and dignity
• Embrace diversity as an essential component in
  the way we do business.

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Case 6 Vermont Teddy Bears
Mission Statement
The Vermont Teddy Bear provides our
customers with a tangible expression of their
best feelings for their family, friends, and
associates. We facilitate, communicate,and
therefore participate in caring events and
special occasion that celebrate and enrich our
customers life experience. Our products will
represent unmatchable craftsmanship balanced with
optimal quality and value. We will strive to
wholesomely entertain our guests while
consistently exceeding our external and internal
customer service expectations.
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Harley Davidson More Than A Motorcycle
Fulfilling Dreams Vermont Teddy Bear A
Lifetime Emotional Symbol of Love and
Care Starbuck Third Home Carnival
Funship
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• Maytag Company
• Mission
• - Developed in 1989 for the Maytag Company
  To provide our customers with products of
  unsurpassed performance that last longer,need
  fever repairs , and are produced at the lowest
  possible cost.
• - Updated in 1991 Our collective mission
  is world class quality. Expands Maytags belief
  in product quality to all aspects of operations.

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• 2. Objectives
• To be profitability leader in industry for every
  
• product line Maytags manufactures.
• Selected profitability rather than market
  share.
• To be number one in total customer
• satisfaction.
• To grow the North American appliance
• business and become the third largest
• appliance manufacturer (in unit sales) in
• North America.

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-To increase profitable market share growth in
North American appliance and floor care
business, 6.5 return on sales, 10 return on
assets, 20 return on equity, beat competition
in satisfying customers, dealer, builder and
endorser, move into third place in totals units
shipped per year.
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3. Strategies - Global growth through
acquisition and alliance with Bosch Siemens.
- Differentiate brand names for
competitive advantage. - Create synergy
between companies, product improvement,
investment in plant and equipment.
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• Policies
• 
  - Cost reduction is secondary to high
  quality.
• - Promotion from
  within.
• 
  - Slow, but sure RD Maytag slow
  to respond to
• changes in market

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• Case in KPI

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KPI -Objective
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KPI Strategy Objective Increase Efficiency
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KPI Strategy Objective Enhance Quality
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KPI Action PlanStrategy Hiring Consultants
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KPI and Balanced Scorecard
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Strategic Objective Develop the
competencies needed to support the sales
process

• Strategic Outcome
• Measure
• (Lag indicator)
• Revenue per Employeeor
• Sales per Salesperson

• Performance
• Driver
• (Lead indicator)
• Strategic Job Coverage Ratio

• Strategic Initiative
• Redesign the Staff Development Process1.
  Identify strategic jobs2. Build competency
  profiles3. Assess current staff4. Forecast
  requirements5. Identify gap6. Build staff
  development plan

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Financial Perspective
Strategic Themes
Growth
Sustain
Business Unit Strategy
Harvest
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The Customer Perspective - Core Measures
Market Share
Customer Profitability
Customer Acquisition
Customer Retention
Customer Satisfaction
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The Customer Value Proposition
Generic Model



Value
Product/Service Attributes
Image
Relationship
Price
Functionality
Quality
Time
Example Retail Banking Value Proposition
Product / Service Attributes
Image
Relationship
Responsive
Personal Advisor
Convenient
Knowledgeable
Seamless Services
Error Free
Breadth of Offering
Strategic Measures Service Request
Failure Fulfillment Index Time
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The Customer Value Proposition (Tier I) -
Rockwater
Product / Service Attributes
Image
Relationship
Relationship
Professional Management
Timeliness
Quality
Functionality
Price
Safety Minimum Hours
Meeting Schedule
Honesty and Openness
Revision of
Worked

of Contractor Engineering
Submitted
Timely Submission
Service
Procedures Value for
of Procedures
Flexibility Quality and
Money Awareness of
Contractual
Performance Innovativeness
Responsiveness Standard
of to Reduce Cost
Equipment Team
Rapport/ Provided
Spirit Quality of
Personnel Production
Quality

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The Internal - Business - Process Perspective -
The Generic Value Chain Model
Postsale Service Process
Innovation Process
Operations Process
Customer Need Identified
Customer Need Satisfied
Identified the Market
Create the Product/Service Offering
Build the Products/ Services
Deliver the Products/ Services
Service the Customer
The Internal - Business - Process Perspective -
The Innovation Process
Postsale Service Process
Innovation Process
Operations Process
Customer Need Identified
Customer Need Satisfied
Identified the Market
Create the Product/Service Offering
Build the Products/ Services
Deliver the Products/ Services
Service the Customer
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The Learning and Growth Measurement Framework
Core Measurements
Results
Employee Retention
Employee Productivity
Employee Satisfaction
Enablers
Climate for Action
Technology Infrastructure
Staff Competencies
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