Defining Big Data KPI's
It seems today that through the aid of computers, an opportunity to “measure everything” has created an epidemic of KPI’s (Key Performance Indicator). The result I see is company staff running the risk of continual fire fighting from one measure to the next. In this article I list some key areas to help define your KPI's for big data.
The simple truth is that not all the “KPI’s” are actual KPI’s that matter. Indeed, these should be defined correctly as metrics.
The above situation creates amplified silo attitudes as departments and teams focus more on their specific “KPI” as a priority over their fellow employees in another department chasing their own set of “KPI’s”.
The situation of “death by KPI’s” has come about from the much misunderstood but quoted Peter Drucker “What’s measured improves”. A significant risk in future is that the deeper the Internet of Things, wearables, sensor devices and advent of big data linked to ever improved analytics software, we shall see a continual battle of the “KPI rules” mentality.
There will be a risk of recreating some of the scenarios we see on the fine highways of California and around the world. Great super highways, high performance cars, great views from the dashboard but sat in grid lock.
As an act of support for Peter Drucker I have added some of his other quotes that I trust will be understood correctly!
Correct KPI foundations
It is time to go back to some basics and prepare for the future landscape where almost everything can and will be measured. We need to remind ourselves why we measure, what is a metric, what is a KPI and what is the desired result.
Does your business operate within the key areas of the Harvard created balanced scorecard (BSC) which is recognized for its strategic planning and management elements? The BSC has been implemented in just over 50% of all the top 500 global companies (to large or less degree of fulfillment). I will cover the BSC in a separate article but it does deserve full recognition and reference as a guide of good business practice.
Scenario building case for metrics and kpi's
I call you take a reflective mood and ponder one some of the key aspects of your business and role. Just for a moment imagine that you work in a business that has between 12-50 staff and the metrics + KPI’s used to-date have served you well. You know however that some additional training and support is needed to lift the skills, motivation and performance for the whole business as you prepare to reach to the next level of business growth.
So, a meeting is held away from the operations of day to day business and you create the below main areas you wish to pursue. The outcome will possibly look like the below and cover these main areas.
How will you measure the existing delight and anticipate future needs of your customers (internal and external customers)? Focus on the behavior elements of your business, market and customers. As technology levels improve your ability to utilize predictive analytics will help you stand out about the shoulders of your competitors in this area.
Survey’s alone will not cut it, qualitative research may also provide deep insights.
Process and operational control.
Industry standards and regulation may dictate the minimal standards of services and goods provided. This includes data privacy, financial transaction information, safety and environmental expectations. The minimal metrics should cover methods to control and improve these areas, however the operations, tactics and deployed strategy and management focus surrounding these areas are often where a gap can be identified as a new priority KPI area. Where possible the ability automate process’s is important for improved quality, predictive performance, planning and free up more creative areas for employees.
Business Intelligence solutions are key to this area.
A recent Bersin paper shocked many business leaders with the results of their low engagement ratings given by employees. This is at a time when most leaders are seeking new sustained IP advantages, longer working hours to cover a global business. The importance for every business to sustain growth with low staff churn rates has arguably never been more important.
Identify links between personal values to the business values and mission
Cash is king and yet cash-flow alone does not necessarily mean good business. A business with high capital and/or overhead costs and investor’s expectations will need to structure itself to satisfy these needs. There is a need for the leaders to set realistic minimum expectations for company survival and growth.
Define for each manager the key area of finance contributed most i.e. overhead costs, cash-flow from inventory, profit, assets?
The purpose of this article has been to help identify the correct KPI areas most relevant to a manager, team and department but remains valid at full company level. The will be an increasing need to prepare and manage differences between, Metrics and KPI's as the world of #bigdata penetrates all areas of company processing.
The KPI’s should measure PERFORMANCE to deliver a desired RESULT, not just the result. Through this system you drive and install the ability of a business to pivot more naturally to market conditions, help anticipate behavior and retain the necessary discipline for quality.
I am keen to hear your own experiences of KPI overload and the challenges faced in dealing with “metric chasers”.
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