To make an implementable and robust KPI (Key Performance Indicator) keeping positive momentum with strategic learning, curiosity, and discipline is crucial. 

In this article, we will cover the context, six goal-driven considerations in “design, build and operate” phases, errors we make, and ways of avoiding the mistakes. So let’s get started.

Context

Companies spend a lot of time in defining and setting up a variety of measurements and reports, e.g. Customer, Supplier, Employee, Internal Process KPIs.

This is true that we have the right intention. Unfortunately, we find challenges to produce the results or see the benefits in a sustainable manner.

Now we are going to articulate the considerations in the “design, build and operate” stages.

6 Considerations in “design, build and operate” phases

We have researched thoroughly on this particular context. Based on our findings and hundreds of projects related to measurements and KPIs driving better decisions, feedback, and learnings, we developed a robust method that has three phases –  “design, build, and operate”. 

The 6 considerations apply to these three phases.

1. The behavior we want to promote

Behavior is one of the most vital key factors of an organization. Which sort of behavior do we want to flourish? This question should be answered in a simple and effective way.

In fact, a shared understanding of the behavior we want to promote across the organization. 

Here are some examples below: 

• Proactiveness
• Entrepreneurship
• Fact-based decisions
• Feedback
• People development
• Strategic learning

2. Spend time on leading indicators

Now we are going to focus on leading indicators. At this spot, taking proactive actions is advisable. 

Look at the insights on the leading indicators and take proactive actions. They show scientific cause-and-effect relationships. 

Behavior is, most significantly, a leading indicator towards achieving sustainable results.

3. Separate strategic review

Operations review and strategic review are different. And they need to be defined separately from each other. The strategic review is essentially a learning process. 

The right environment for the discussions looking at the KPIs is mandatory that leaders need to arrange. So they need to be intentional in creating the right environment for the discussions.

4. Set the direction

In a transformational program, use the measurement exercise to scale the direction. Determine the single measure that will capture how well we are progressing in the right direction. 

Balance of KPI to express “Run the Business” and “Change the Business.”

5. Invest in Data for the right value

What makes processes efficient? A lot of effort is required in Data Engineering. We need to invest in Data Quality and Engineering to make processes efficient. 

Prioritize them based on the purpose, the value of enhanced data in quality of decisions, or answers to questions.

6. Be curious and disciplined

A long list of measures in a continuous manner can eventually impact the motivation of the team, due to overprocessing compared to value. As the organization learns, leaders need to encourage curious minds to introduce newer questions and perspectives. 

Now we are delineating the mistakes we make in data, KPIs, analytics, or reports. 

What Mistakes Do We Make?

Our data, KPIs, analytics, reports are valuable assets, yet could harm our organization 𝐢𝐧 𝐚𝐧 𝐮𝐧𝐟𝐨𝐫𝐞𝐬𝐞𝐞𝐧 𝐚𝐧𝐝 𝐝𝐫𝐚𝐦𝐚𝐭𝐢𝐜 𝐰𝐚𝐲. See the costly errors made by us in the following:

1. We fall into the trap of abundance, we think more is better. More data, more KPIs, more reports.

2. We avoid realizing the effort and investment required to transform from raw data to actionable insights. 

3. We are not intentional. Therefore even though we have done all of it, we don’t know what to do about it. What decisions to make, what actions to take.

4. Trap of ‘devils in the details, particularly for the executives. The more we dig the more we disengage the team.

5. Data used to micromanage – simply disaster. Think about it this way, we are investing time and energy to go backward.

6. Not recognizing the difference between prospective and retrospective analysis, not knowing how to extract value from it

7. Looking for perfection at the finest level. ..mostly these are self-serving. Waste. 

Proven Mechanisms of Avoiding the Mistakes

We and our team can avoid all these 𝐜𝐨𝐬𝐭𝐥𝐲 𝐦𝐢𝐬𝐭𝐚𝐤𝐞𝐬 by following a proven mechanism. 

• Intent: What questions do we want to answer, what value, what quality of answer do we need to extract that value? 
• Roles and Process: Is that going to improve our decision-making process? Recurring / non-recurring? Is it supported by the clarity of Responsibility, Accountability, Support, Consult…
• Environment: Is it going to improve empowerment, the capability of our organization/team for better decisions, clarity, confidence? 
• Technology: What is the right level of investment
• Change enablement: Do we have clear what changes we are bringing in, WHY, our change management strategy, plan?

Summary

Measurements, KPIs are invaluable for business-leading organizations embed strategic learning into the process. A balanced view of “Run and Change” the business is very critical for business.

Executives and managers need to be mindful of the purpose, enhancing the maturity of the process along the journey.

This article has provided a 50,000 feet view. Assess your 𝐝𝐢𝐠𝐢𝐭𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲 with experts’ help, and craft a course carefully. Make corrections if need be.