Publicaties

Building an excellent KPI structure is critical for implementing a good Performance Management framework for your company. It is the foundation for communicating and improving performance, day in day out. But how do you build a KPI structure that lasts? Rule 2 out of 10: finding the ultimate goal.

 

Organizations usually define several objectives, but how do these objectives relate to each other and which one is more important? For that reason, it is important that companies think not only about defining objectives, but also about the objectives hierarchy. That hierarchy starts with the ultimate goal. The big thing. They way this ultimate goal should be defined depends on whether you are a profit or non-profit oriented company.

 

Let’s discuss profit companies first. You might become very philosophic about why profit companies do exist. Of course, they have all kind of stakeholders. However, at the end of the day they need to make profit to ensure continuity. So the ultimate goal is something related to sustainable profit. Not just growth, market share, happiness of employees or becoming more efficient, but sustainable profit. Growth and productivity objectives are the pillars of your ultimate goal.

 

For non-profit organizations the story line is different and more difficult. These kind of organizations have to start with a stakeholder analysis. Investigate what each stakeholder require today and in future and try to find the ultimate common goal across the different stakeholder groups. There might be a shared goal, often related to the mission statement of the organization. There might be dualism, i.e. two ultimate goals. Different stakeholders require different ultimate goals. So be it.