Key Performance Indicators: Developing, Implementing, and Using Winning KPIs

Today I learned something. And that is worth the price of this book! David Parmenter opens the book showing how we often confuse results, with actions that we need to take to get those results. He shows an onion and Key Result Indicators (KRIs) being the outer most layer of that onion. This is what we see as the end result in a company - Customer Satisfaction, Financial Results in terms of Profits, etc. The next layers inside are the Result Indicators (RIs) and Performance Indicators (PIs). Performance Indicators are like % Increase in Sales with say top 10 Customers. Result Indicators are like Sales done Yesterday. David then makes the key distinction that only some are Key Performance Indicators that drive the whole company outwards from the core of the onion! These are the ones you need to monitor closely on a daily, weekly, monthly basis as appropriate but they cause the other indicators to have positive or negative values. The example he uses is that of a British Airways CEO who always called the relevant British Airways people at the airport EVERYTIME a flight left late. That kept the BA personnel on their toes making sure the planes left on time all the time! Now every Performance Indicator, Result Indicator and Key Results Indicator downstream like On Time Record, Sales Per Flight and Customer Satisfaction Index were all exemplary! David also talks about a very useful 10/80/10 rule that says KPIs should only be 10% of all the metrics. Result Indicators and Performance Indicators make up 80% and Key Result Indicators 10%. This enables management at different levels pay attention to those that are relevant and urgent on a daily basis (KPIs) so that all downstream results and indicators are on track. There is also an elaborate 12 step implementation process on how to plan for, implement and fine tune a KPI measurement regimen. The best illustration I liked was that of a Dial Chart on page 171 that provided at a glance a lot of information - Performance Indicator on a Speedometer where you can see current performance value, Best Performance so far as a dot on the meter, worst performance as a dot, acceptable, middle and unacceptable ranges of performance all in the same speedometer! In one glance you know where your current performance stands. That should be the goal of visualizations - all information in one place at the same time! I will never think about KPIs the same way again! Very useful, illuminating book!

In developing a measurement system for organizations if the team can understand the ideas clearly explained in the first chapter of this book then they will be starting off on the right foot towards success.

This book changed my thinking for Performance Management metrics. The distinction between Key Performance Indicators, Performance Indicators and Key Result Indicators was a revelation that helped me target key information to the people who need it most. The practical approach to developing metrics within an organization helps you quickly show results either within your own organization or with customers. I highly recommend the book for anyone involved with Performance Management initiatives.

As we know from another business author, the 'Knowing - Doing Gap' can be difficult to close. For Balance Scorecard fans, KPI consultant David Parmenter fills that gap. Written as an instruction manual for implementing performance measurement in any organization, this easy to read guide provides both context and content for a 'just do it'' approach; implementing a successful performance measurement system this is, in any business sector. Among the many things this book does well, the most important may be: Setting the context for key implementation steps. In addition to his 12 step process, Parmenter presents 5 critical aspects of a KPI system. One, he open's the dialogue by providing all important distinctions between; Key Results Indicators (KRIs), team Performance Indicators (PIs), and leadership's Key Performance Indicators (KPIs). He says these should be balanced 10/80/10. This is foundational to successful implementation. Two, he links these to strategy thru a clear understanding of well thought out (and few in number) Critical Success Factors (CSFs) - one of the most critical and hardest parts of for making measurement effective at a working level. Three, he exposes the 'best practice' myth; rightly acknowledging that the goal is the continuous adaptation of 'better' practices and not a misguided belief in the redemptive qualities and often misapplication of someone else's "best practice". Four, he stresses the importance of understanding measurement as a constantly evolving process and not a one-time establishment of the "right" measures. And, five, he places performance measurement within the overall context of organizational development. A part of the whole, but not the whole. The approach is pragmatic, the steps are clear and doable, the materials don't give the answer, but they provide a well-defined space in which to write your own business particulars. This book does not belong on any manager's book shelf; it belongs on their working table. This one is a winner for those who want doing and not just knowing. Dennis DeWilde, author of "The Performance Connection"

This was a very easy concise yet comprehensive framework and structure for developing and implementing KPI's. It distinguishes true KPI's from performance indicators or results indicators which people gravitate to as they think they are KPI's. This laid out a logical framework to follow. It is an easy read and provides many checklists as well as sample KPI's.