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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 6 out of 10: processes determine performance.

 

In rule 1 to 5 you have created a logical set of 5 to 8 objectives with appropriate KPIs, all leading to the same ultimate goal. In fact, you have determined what you want to achieve, related to your strategy. The next question is: how?

 

How is all about your companies processes. It is what employees do together to get products and services out to the customers, on time, in the right quantity, in the way they want it and at the right price.  

 

But how to look at your processes? Many companies see processes as something for the quality department. They handle processes to ensure the company is getting the quality certificate. By the way the Finance department has also documented the processes recently, since SoX urged them. Same processes documented twice (or even more) and not used for where they could be used for: managing performance and improvement.

 

If you want to manage the how, you have to look at you value chains or what we call ‘’customer – customer processes (read customer to customer). Each C2C process delivers products / services, and consequently value, to the customer. So, define your C2C processes and define the KPIs for these processes. These KPIs should relate to customer value and / or efficiency and drive the result KPI’s on your strategy map.