The Goal, KPI, and Action List Loop

Note: This entry is based off a Facebook post on KPI I saw on September 14th, 2020.

Lydia Jominin's post on KPIs turned into a sketch.
Taken from #LydiaThinkingLab

Key Performance Indicators (KPI) are activities that lead towards a target or goal. That target or goal is measured at different milestones. During these milestones, we examine the challenges and changes. From there we then loop it back:

  • Does the target remain? Or should we vary it?
  • Is the action list still relevant?
  • What interventions are necessary to bring this up to speed?

KPI: A Current Weakness

And I have a confession to make: KPI currently one of my weakest competencies. It is one of my weakest because of the many untested and unverified assumptions I have on the subject. Right now I’m struggling with trying to apply this in an actionable manner.

To remedy this, I’m looking at several approaches:

#1: Project Management Approach on KPI

As a consultant, I’m involved in several projects. Besides that, I’m building on the knowledge I learnt years back when I attended the Project Management Mastery workshop by the late Anthony Fernandez. Naturally, this is one way for me to dive into the subject.

Projects have milestones and timelines. Different action items feed towards the delivery of the project. It can be measured as a whole or in part. When a milestone is delayed, we look into what causes the delay so we can remedy the situation and bring that component up to speed.

#2: Google’s OKR and the KPI

In 2018, an acquaintance introduced to me the concept of “Objective-Key Results”, or OKRs. Of course, the terms in OKR change slightly. This includes the meaning of KPI.

In a nutshell, OKR is a goal-setting framework used by Google and many other tech start-ups. The goal, termed ‘objective’, is supported by 3 to 5 key results (hence, the KR). These are specific measurements tracking the progress of the objective.

We cannot discount the initiatives that drive the OKR. Initiatives are the tasks and action items the organisation needs to do to bring the goal to life.

One book I am going to read this week to understand the OKR concept is John Doerr’s Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs.

Opportunities to Re-examine Understanding and Test Assumptions

It’s no secret: KPI is often misunderstood.

Another book, Key Performance Indicators: Developing, Implementing, and Using Winning KPIs by David Parmenter, reveals how it is often mixed with other performance measures: performance indicators, key result areas, and result areas.

The cornerstone of KPI hinges on two important areas: (1) clarity and (2) ownership. With more personnel and teams involved, clarity and ownership become crucial for the organisation’s success.

Right now it’s premature for me to elaborate further. I need to read up on these materials to gain clarity. From there, I’ll need to internalise and apply what I learnt.

Since there is no exam per se, how do I know when I understood the concept? When I can come with anecdotal examples on the fly.

Author: Aldric

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