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A top ten performance management book on www.amazon.com for over one year – PowerPoint PPT presentation

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Title: A

A top ten performance management book on
www.amazon.com for over one year
  • www.waymark.co.nz to order, see link to

Getting started or restarted with winning KPIs
  • Presented by David Parmenter
  • waymark solutions limited
  • June 2008
  • Website www.waymark.co.nz
  • Blog www.davidparmenter.com
  • Email Parmenter_at_waymark.co.nz

What stage are you with your performance
  • performance measures are not working and want to
    get started using winning KPIs
  • have got a balanced scorecard but it needs a
  • our performance measures are working well and am
    only interested to compare them against winning

This webcast is 6th in a series on winning KPIs
  • introduction to winning KPIs
  • implementing KPIs - A 12-Step Process
  • implementing KPIs in Smaller Organizations (lt200
  • finding your organizations critical success
  • balanced scorecard in 16 weeks not 16 months
    the implementation lessons
  • getting started or restarted with winning KPIs

How familiar are you with the winning KPIs
  • this is my first web seminar I have attended on
    winning KPIs
  • I have attended at least one other web cast done
    by David Parmenter
  • am very familiar with the work but have not used
    it yet
  • not only familiar but have started the process to
    use winning KPIs in our organization

Contents of this web seminar
  • how to get started or restarted depending on the
    variety of issues you face
  • the main barriers to success
  • your next steps

How to get started when little has been done
  • performance measures (PMs) have been a random
  • the balanced scorecard, if mentioned, would be
    confused with a weight watchers tool
  • most PMs are reported monthly
  • nearly all PMs are financial

Selling the change
  1. collect data on impact of the current performance
    measures (slide)
  2. read Kaplan Nortons Harvard Business Review
    papers January-February 1992
  3. read papers on www.bettermanagement.com
  4. prepare the sales pitch for change (slide)
  5. pre-sell the sales pitch to the influencers
  6. make the sales pitch
  7. plan and execute a workshop on the critical
    success factors see web seminar
  8. seek green light for the implementation of
    winning KPIs

Data on impact of the current performance measures
  • estimate the cost of gathering measures
  • find the war stories in your organization by
    visiting the oracles both past and present e.g.
    the green book
  • interview the workforce in the field to see what
    they think
  • run a survey on the staff, using a statistical

We have these problems (The sales pitch )
  • a lack of timely decision making at the work
    place leading to rising operational costs
  • a lack of alignment of day to day activities to
    strategy e.g. staff are performing the same TQM
    on all shipments
  • too many performance measures e.g. over xx are
    gathered each month at an estimated cost of yy
  • a lack of clarity on which of our success factors
    are critical e.g. timely arrival and departure of
  • A winning KPIs project will fix all these

How to get started when the balanced scorecard
(BSC) is failing
  • BSC put in at great cost by external consultants
  • the reporting of PMs is seen as an end in itself
    - nothing seems to happen
  • interest in the BSC and PMs is waning
  • BSC is now thought of as a failed management fad
  • the BSC is no longer on the CEOs radar screen

Revitalization 1
  1. ascertain reasons for failure (slide)
  2. compare and contrast the way you have dealt with
    performance measures against how winning KPIs are
    to be implemented and used, see my papers on
  3. prepare the sales pitch for change (slide)
  4. pre-sell the sales pitch

Revitalization 2
  • make the sales pitch
  • plan and execute a series of workshops to
    revisit the critical success factors, the team
    and organization measures and associated
    scorecards - see CSF workshop paper for content
  • ascertain what winning KPI steps have to be
    done and what can ticked off as already
  • commence implementation (see book)

Why did the BSC fail?
  • lack of involvement of in-house team
  • little involvement with the workforce
  • no PMs tracking important activities that happen
    24/7 or daily
  • the CSFs where not ascertained
  • CSFs were not communicated to the work force
  • all PMs were called KPIs
  • too many KPIs

Prepare the sales pitch for change (hard as the
SMT do not want to listen)
  • explain the magic of knowing the CSFs
  • if staff know the CSFs they will start aligning
    their daily activities to the organizations
  • emphasize the learning that has already occurred
    through the BSC process
  • explain why this approach is different
  • emphasize the tasks and how the implementation
    will avoid the pitfalls of the existing BSC
  • ask can we afford not to undertake this task

How to get started when management have already
given the go ahead for winning KPIs
  • some of the senior management team (SMT) have
    listened to the winning KPIs presentations on
  • the CEO is aware that PMs will change and their
    monitoring involvement will be daily / weekly
  • a half day workshop has been held for the SMT and
    they are aware of the characteristics of winning
  • the project steps and the need for a full time
    KPI team have been agreed

Getting started
  1. set up the KPI team with support facilitator
  2. hold the two day critical success factor workshop
  3. design the implementation from either the 12
    steps or the 8 phase approach, or some
  4. KPI team implement the plan with regular
    feedback to CEO and guidance from the external

The main barriers for success
  • the wandering attention of the CEO (slide)
  • not freeing up the right people for the KPI team
  • not making the KPI team full time
  • lack of selling through the emotional drivers of
    the SMT, management, and staff
  • lack of follow through
  • completing priorities we need to finish what we
  • see the presentation BSC in 16 weeks not 16 months

Keeping the CEO SMT interested
  • always sell the change via the CEO emotional
    drivers e.g. the points of pain ask the EA
  • communicate small wins weekly to the CEO, e.g.
    something to boast about on the 19th hole
  • encourage / actively manage positive feedback up
    to the CEO I appreciate those kind words, could
    you repeat what you have said to the CEO when you
    next meet, it would mean a lot to me and the KPI
  • celebrate every success a celebration is a
    great communication tool

Appointing the right people for the KPI team
  • The key characteristics which need to be
    covered by the team include
  • excellent persuasive presentation skills
  • innovation
  • ability to complete large projects
  • knowledge of the organization and sector
  • advanced communication skills
  • ability to bring others onboard
  • balanced mix of oracles and young guns

Which team member for leader?
  • leader is well respected in the organization
  • gets on well with the CEO
  • well liked as they have an inclusive leadership
  • has completed projects in the organization
  • had a string of successes
  • relaxed style, seems to make time rather than be
    constantly fighting time stories

Selling through the emotional drivers
  • car sales person analogy
  • emotional drivers differ
  • SMT - looking a fool in front of the Board,
    impact on their bonus, short term focus
  • management - not invented by me, will behave
    based on their perception, sceptical for good
  • staff job security, impact on existing
    workload, perception of what management will do
    with the information

A sales presentation
We have these problems
  • a lack of timely decision making at the work
    place leading to rising operational costs
  • a lack of alignment of day to day activities to
  • too many performance measures
  • lack of clarity of what of our success factors
    are critical
  • we are missing goals through taking our eye off
    our critical success factors
  • A winning KPIs project will fix all these let
    me explain

KPI Stories
  • Freight forwarding company KPI
  • Airline KPI
  • What characteristics are common with these

The characteristics of winning KPIs
  • non financial (not expressed in Pds, s, Euros
  • measured frequently e.g. daily or 24 by 7
  • acted upon by CEO and senior management team
  • all staff understand the measure and what
    corrective action is required
  • responsibility can be tied down to the individual
    or team
  • significant impact e.g. it impacts most of the
    CSFs and more than one BSC perspective
  • has a positive impact e.g. affects all other
    performance measures in a positive way

Definition of KPIs
  • they focus on the aspects or areas of our
    organisations performance that are critical or
    vital for our ongoing and future success
  • they measure our success in key areas and
    processes that affect our customers, our
    employees, our shareholders or other stakeholders
  • Source AusIndustry

Clearly few of our measures are KPIs
  • xxxxxxxxxxxxxx is not a KPI because
  • xxxxxxxxxxxxxx is not a KPI because
  • xxxxxxxxxxxxxx is not a KPI because
  • xxxxxxxxxxxxxx is not a KPI because
  • xxxxxxxxxxxxxx is not a KPI because
  • xxxxxxxxxxxxxx is not a KPI because

There are four types of performance measures
peel the skin to
find the PIs
peel to the core
to find the KPIs
Our top five measures are thus
xxxxxxxxxx Reviewed monthly KRI
xxxxxxxxxx Reviewed weekly RI
xxxxxxxxxx Reviewed daily PI
xxxxxxxxxx Reviewed daily KPI
xxxxxxxxxx Reviewed quarterly KRI
David Parmenters 10/80/10 rule
Key result indicators
  • Examples
  • profitability of customers
  • net movement of earnings before interest and tax
  • customer satisfaction
  • employee satisfaction
  • return on capital employed
  • speedometer analogy (gear, rpm)

Performance indicators
  • Examples
  • increase in sales to the top 10 of customers
  • of employees suggestions implemented in last
    30 days
  • key customers complaints
  • sales calls organized for the next week, next
  • late deliveries to key customers
  • no. of products rejected by quality assurance

Result indicators
  • Examples
  • sales made yesterday
  • weeks sales to key customers
  • net profit on key product lines
  • debtor collections in week
  • xxxxxxxxxxxxxxxxxxxxxxxxxxx

Measuring in the three timeframes
  • past measures e.g. number of late planes last
    week/ last month
  • current measures e.g. planes over 2 hours late
    (updated continuously)
  • future measure e.g. number of initiatives to be
    commenced in the next month / two months to
    target areas which are causing late planes.
  • KRIs and RIs by definition are past measures
  • KPIs and PIs can be past, current, or future

Too many of our measures are in the past (looking
xxxxxxxxxx Reviewed monthly Past
xxxxxxxxxx Reviewed weekly Past
xxxxxxxxxx Reviewed daily Past
xxxxxxxxxx Reviewed daily Past
xxxxxxxxxx Reviewed quarterly Past
Relationship between strategy / CSFs and PMs
Linkage of strategy to measurement
Strategies (issues Initiatives)
Critical Success Factors
KPIs PIs in a balanced scorecard and KRIs in a
Definition of a critical success factor
  • a list of issues or aspects of organizational
    performance that determine ongoing health,
    vitality and well-being
  • source AusIndustry

With 40 or so success factors there is confusion
and a lack of focus
  • too many measures
  • strategic plans with too many diverse and
    contradictory initiatives
  • lack of communication and direction to
    operational and support staff

We know our success factors - however do we know
our CSFs?
xxxxxxxxxx SF
xxxxxxxxxx SF/CSF?
xxxxxxxxxx SF
xxxxxxxxxx SF
xxxxxxxxxx SF
xxxxxxxxxx SF/CSF?
xxxxxxxxxx SF
xxxxxxxxxx SF/CSF?
Importance of getting the CSFs right
  • wording of the CSFs is critical
  • retention of staff becomes retention of key staff
  • increase repeat business becomes increase repeat
    business from core customers
  • this makes measures more specific
  • daily sales becomes daily sales made to key
  • planned calls becomes planned calls to key
  • deliveries made on time becomes deliveries to key
    customers made on time

Only KPIs will give us the alignment the annual
plan will not!
Next steps
  • access the draft PowerPoint and prepare your
    sales pitch
  • I would be happy to review your sales pitch and
    offer some pointers
  • get some public relations assistance (the
    emotional driver experts)
  • keep up to date by referring to my website
    www.davidparmenter.com, my web seminars, KPI book
    e.g. templates are available etc
  • make sure you celebrate success and let me know
    so I can celebrate with you!

Changing this
To this
These books came out in 07
  • www.waymark.co.nz to order, see link to

  • Thank you for participating in this web
  • Hope to see you at a workshop
  • see www.davidparmenter.com for venues

John Wiley Sons have published
Amazon link on www.davidparmenter.com
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