LEADER’S FIELD GUIDE
The 1957 Chevy Bel Air dashboard displayed five gauges: miles per hour, overall mileage, current gear, fraction of fuel remaining, and coolant temperature (between Low and High). Today’s dashboards boast more than five screens of data! My personal favorite? My exact location on the planet in relation to twenty-four satellites (plus five spares) orbiting Earth. At any place on the surface (with the exception of thick forests and deep valleys), at least three Global Positioning System (GPS) satellites trilaterate* or pinpoint my location.
Though only three satellites are needed, a fourth satellite provides more accuracy. As anyone who has tried to navigate to new location knows, accurate data** are good! What specific information are you using to drive your business? Which Key Performance Indicators (KPIs) are the best predictors of long-term success or critical failure? KPIs are quantifiable outcome-based statements of time-based goals or objectives. Let’s say widget production was down by 15% yesterday. A line manager might be alerted to the fact that necessary parts were delayed due to late payment or essential personnel are disgruntled. I liked Erica Olson’s tips for developing KPIs. She makes a few basic, yet critical recommendations for selecting and tracking KPIs:
- Measure: the description of the gauge should be expressed in raw numbers, progress, or change. Information is used to simply calculate and communicate progress, for example, # of new customers per month, % complete per quarter, and % of increase in sales.
- Target: the numeric value is also associated with a due date or time period. Without very specific goals, individuals and teams lose momentum and dial back contribution. (Example: average Net Promoter Score of 9 by next quarter.)
- Source: the report, system, or input from which the data comes should be consistent and relatively easy to update and query. KPIs alone provide only an account of past accomplishments, it is the response to what is reported that makes an impact.
- Frequency: the rate at which the data is reported. In operations, for example, most KPIs are reviewed on a daily basis to minimize surprises; small issues are remedied before they become significant problems. Some managers look only for exceptions in order to simplify responses. Other KPIs are reviewed on a monthly or quarterly basis.
Start with a simple list of essential KPIs, not exceeding five to seven. Complex indicators only create confusion which ultimately minimizes the value of regular reporting. I remind you, there is no need to build a dashboard equivalent to NASA’s Space Shuttle when indicators similar to Chevy’s Bel Air will do. Performance is enhanced when we lead teams through consistent improvements in response to accurate feedback.
* Trilateration measures distance and is not to be confused with triangulation (which measures angles). The U.S. Military established the Global Positioning System (GPS) in the 1970s.
** Yes, the noun data is plural (like “facts”), the noun datum is singular (like “fact”)– I know, I know, it sounds really weird!
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Bible says about Key Performance Indicators. —
ABOUT THE AUTHOR: Michelle Sugerman (PMP, PCC) is a speaker, author, and leadership coach with Leading Synergies. She founded Synergy Groups, virtual masterminds connecting all Christians, everywhere, for the purpose of Community, Accountability, Transformation, and Leadership. She also partners with high-performers and heirs-apparent especially in the STEM industries. Michelle’s formal background in technology, franchise, and project management gives her an edge on implementing best practices and scaling towards sustainable success. Michelle lives in Colorado where she hikes fourteeners and enjoys gourmet meals with her loving husband of 23 years.