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Initiatives are not KPIs

by Stacey Barr, Performance Management Specialist, Stacey Barr Pty LtdThursday, September 30, 2010

KPIs are performance measures, but a problem with the word ‘measure’ is that it has two different meanings in the English language.

Meaning 1: We will take measures to improve customer loyalty.
Meaning 2: We will measure how much customer loyalty we have.

In the first statement above, you could easily replace the word ‘measures’ with ‘initiatives’, but not in the second statement. I’ve often wondered if this is the reason why so many people think that initiatives or projects or strategies or ideas to improve performance are what’s called for in the KPI or performance measures column, next to the goals in their plan. They have lists of KPIs that read like these:

  • “Develop partnerships for the delivery of training with major universities.”
  • “Appoint Head Coach and Team Manager early in the year.”
  • “Secure philanthropic/Government funding for state-wide professional development program.”
  • “Provide policy responses and submissions on key national issues relevant to rural and remote health workforce, education and training.”
  • “Identification and implementation of a measurement system to evaluate improved productivity, fruit quality and reduced production costs for growers.”

These are simply not performance measures – nor KPIs. The first example of “Develop partnerships for the delivery of training with major universities” was a Key Performance Indicator for a college of surgeons’ Key Result Area of “Build effective partnerships with other educational bodies to improve delivery of educational material and enhance the training program.” Obviously they need to develop the partnerships for training delivery, but that’s what they have to do, not evidence of how well it’s done or of the performance improvement in their training program.

In the second example, “Appoint Head Coach and Team Manager early in the year” was a KPI for a result of “Increased capacity to send better prepared senior & junior teams to multiple events” for a sporting association. Sure, it’s probably an important strategy for making sure that teams are better prepared, but having a Head Coach and Team Manager is not evidence of how much better prepared the teams are. In fact, they’d probably have to have a bit more discussion about exactly what they meant by ‘better prepared’ before they could find a meaningful performance measure.

Initiatives are not performance measures in the same way that budgets are not profits and actions are not results. Yes, you need initiatives or actions or strategies that you will implement in order to improve performance. A university library may redesign the floor layout to provide more study space for students, if the university’s students are dissatisfied with the number of times they can’t find a space when they need it. The initiative would be a floor layout redesign project, and the performance measure could be ‘Average Student Satisfaction with the Ease of Finding Study Spaces’, or perhaps ‘% Students Entering the Library to Study Who Find a Study Space’.

Any good strategic or operational plan will have goals, performance measures, targets and performance improvement initiatives. But they will be distinct from one another. The goal is the result that the organisation wants to achieve (which it currently hasn’t achieved). The performance measure tells to what extent that result has been achieved, over time. The target is the extent you want the performance measure to reach, which would mean achievement of the goal. The performance improvement strategies are the initiatives or projects that the organisation has decided to take to change current performance so it moves to the targeted level of performance.

About the author:

Stacey Barr is a specialist in organisational performance measurement, helping corporate planners, improvement officers, business analysts and performance measurement officers confidently facilitate their organisation to create and use meaningful performance measures with lots of buy-in.
Sign up for Stacey’s free email tips at www.staceybarr.com/202tips.html and receive a complimentary copy of her renowned e-book “202 Tips for Performance Measurement”.

 

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