How to ensure that line-level employees buy-into KPIs and don't treat them as a "necessary evil." Use KPIs for business management, not just for measurement.

1. Why most KPIs don't work and
what to do about this
By Aleksey Savkin
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

2. Why most KPIs don't work
 There are many companies where KPIs are treated as
a "necessary evil."
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

3. Why most KPIs don't work
 There are many companies where KPIs are treated as
a "necessary evil."
 One of the reasons is a poor implementation and
translation of KPIs to employees.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

4. We need a sound approach for KPIs that
will:
 Help managers to use KPIs for business management,
not just for measurement;
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

5. We need a sound approach for KPIs that
will:
 Help managers to use KPIs for business management,
not just for measurement;
 Ensure that line-level employees buy-into KPIs as a
business tool.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

6. The business context of any KPI is formed
by:
 Business Objectives
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

7. The business context of any KPI is formed
by:
 Business Objectives
 Action Plans
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

8. The business context of any KPI is formed
by:
 Business Objectives
 Action Plans
 Team
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

9. The business context of any KPI is formed
by:
 Business Objectives
 Action Plans
 Team
Let's have a look at these parts and see how they might
help us to convert a KPI from a measurement tool that
employees disparage to a management tool that
employees will buy into.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

11. Alignment with business objectives
 Each KPI should be aligned with a specific business
objective.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

12. Alignment with business objectives
 Each KPI should be aligned with a specific business
objective.
According to the practical usage, there are two
functions that typically are associated with a KPI:
 Monitoring of the performance
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

13. Alignment with business objectives
 Each KPI should be aligned with a specific business
objective.
According to the practical usage, there are two
functions that typically are associated with a KPI:
 Monitoring of the performance
 Measuring of the progress
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

14. Alignment with business objectives
Example: KPI:“Number of leads per month” ->
Function: measuring the progress -> Business objective:
Ensure the growth of the number of deals closed by 30%
during the next 6 months.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

15. Action Plan
 In a case of monitoring of the business performance a
business objective might be to ensure that its KPI is in
the green zone and react appropriately when it goes in
the red.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

16. Action Plan
 In a case of monitoring of the business performance a
business objective might be to ensure that its KPI is in
the green zone and react appropriately when it goes in
the red.
 When a business objective is focused on achieving
something, a KPI will measure the progress towards the
goal.An action plan in this case includes all the steps
necessary to achieve a specified objective.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

17. Team
 Translate a KPI to your team by explaining to employees
a “why” aspect, e.g. how a KPI is aligned with a specific
business objective, how that business objective helps to
execute a company’s strategy.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

18. Team
 Translate a KPI to your team by explaining to employees
a “why” aspect, e.g. how a KPI is aligned with a specific
business objective, how that business objective helps to
execute a company’s strategy.
 Avoid using reward KPIs or linking any type of
compensation to a KPI. Check out this article for details
and best practices.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

19. Team
 Translate a KPI to your team by explaining to employees a
“why” aspect, e.g. how a KPI is aligned with a specific business
objective, how that business objective helps to execute a
company’s strategy.
 Avoid using reward KPIs or linking any type of
compensation to a KPI. Check out this article for details and
best practices.
 Cultivate in your company a tolerant culture that will treat
red-zone KPIs as opportunities. Check out the
article by Sandy Richardson that explains the details.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

20. Team
 Translate a KPI to your team by explaining to employees a “why”
aspect, e.g. how a KPI is aligned with a specific business objective,
how that business objective helps to execute a company’s strategy.
 Avoid using reward KPIs or linking any type of compensation to
a KPI. Check out this article for details and best practices.
 Cultivate in your company a tolerant culture that will treat red-
zone KPIs as opportunities. Check out the article by Sandy
Richardson that explains the details.
 Assign a responsible employee for a specific KPI.The person
should be responsible not just for filling in data each month, but for
ensuring that an action plan is executed.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

21. Team
 Translate a KPI to your team by explaining to employees a “why” aspect,
e.g. how a KPI is aligned with a specific business objective, how that
business objective helps to execute a company’s strategy.
 Avoid using reward KPIs or linking any type of compensation to a KPI.
Check out this article for details and best practices.
 Cultivate in your company a tolerant culture that will treat red-zone
KPIs as opportunities. Check out the article by Sandy Richardson that
explains the details.
 Assign a responsible employee for a specific KPI.The person should be
responsible not just for filling in data each month, but for ensuring that an
action plan is executed.
 Involve your team in KPI design.
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

22. Automation software
 MS Excel for small companies when no strategy map is
designed and there is only a single scorecard
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

23. Automation software
 MS Excel for small companies when no strategy map is
designed and there is only a single scorecard
 BSC Designer when it is necessary to create a strategy
map where business objectives are linked by cause-and-
effect connections and it is necessary to visualize
important data about objectives and KPIs. Learn more
http://www.bscdesigner.com
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

24. A sound approach for better KPIs
Start KPI design with a business context, not with a KPI. Define what your business
objective is.1
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

25. A sound approach for better KPIs
Start KPI design with a business context, not with a KPI. Define what your business
objective is.1
Do you have an action plan? What are you going to do to achieve a specified business
objective?2
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

26. A sound approach for better KPIs
Start KPI design with a business context, not with a KPI. Define what your business
objective is.1
Do you have an action plan? What are you going to do to achieve a specified business
objective?2
Define a KPI; it can be a KPI for monitoring of the performance or for the tracking of the
progress.3
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

27. A sound approach for better KPIs
Start KPI design with a business context, not with a KPI. Define what your business
objective is.1
Do you have an action plan? What are you going to do to achieve a specified business
objective?2
Define a KPI; it can be a KPI for monitoring of the performance or for the tracking of the
progress.3
Translate your KPI to a team. Explain the context, avoid reward KPIs. Involve your team
in KPI design.4
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm

28. A sound approach for better KPIs
Start KPI design with a business context, not with a KPI. Define what your business
objective is.1
Do you have an action plan? What are you going to do to achieve a specified business
objective?2
Define a KPI; it can be a KPI for monitoring of the performance or for the tracking of the
progress.3
Translate your KPI to a team. Explain the context, avoid reward KPIs. Involve your team
in KPI design.4
Choose a proper KPI automation and visualization tool.
5
Based on http://www.bscdesigner.com/sound-approach-for-kpis.htm