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Optimizing Results in a complex Global Media Enterprise

A series of articles about operations improvement

It's all about KPI ?

During workshop we have been asked by clients and attendees from small-to-medium enterprises (SMEs) about our advice on a simpler abbreviated process for implementing operational synergies and strategic alignments in complex corporate entities - each with say less than 250 employees.   The issues become even more challenging where the subsidiaries may be operating in different geographic and industrial markets.

The answer can be developed through the following process;

  • the adoption by senior management of a common set of Critical Success Factors (CSF's)
  • effective communication of the CSF's to the involved employees,
  • identification of Key Performance Indicators (KPI's) which track progress in attaining those CSF's, 
  • creation and implementation of a "Management Dashboard" which alerts managers and leaders of results, trends and the need for action. The Dashboard is available for real-time results monitoring on a daily, weekly or monthly basis, as management desires and systems allow.

“Will that process work for us?” they ask. The answer is a profound “yes”.

If we call all measures KPIs we are not separating the ‘wheat from the chaff’.

Finding your winning KPIs and measuring your progress towards success will create much benefit . In many successful SMEs the success has largely resulted from the natural ability of a few key leaders and when they sell up or ‘move on’ the organisation changes dramatically, often for the worse. This is because the intuitive feel for the business that these individuals had has not permeated into the culture and operations of the organisation. Nor have their habits successfully been adopted and utilized by their successors.

“Will that process work for us?” they ask. The answer is a profound “yes”.

The key benefits of embedding ‘winning KPIs’ into the organisation include:

The critical success factors (CSFs) of the organisation will be crystallised and conveyed to all staff and across non-affiliated entities. There will be more empowerment and more clarity on what should be recorded and reported The SME will convey clearer, the strategy it is currently working on, to staff so they know which direction they should be travelling in. All CEOs, both current and future, will be linked to staff who are working in the CSFs e.g., there will be daily follow-up calls on the KPI's.   Daily activities of the workforce will be linked to the strategic direction of the organisation, the ‘end-game of management’. 

The separation of performance measures into very few is very important for both SMEs and larger organisations. If we call all measures KPIs we are not separating the ‘wheat from the chaff’.  

The critical success factors (CSFs) of the organisation will be crystallized and conveyed to all staff
  • Key Result Indicators (KRIs) – both financial and non financial measures that give an overview on past performance and are ideal for the owner/Board as they communicate how management have done in a critical success factor or balanced scorecard perspective. See article on “how to speed up Board reporting” in issue xxxx. Typically these are measured monthly or quarterly.
  • Result Indicators (RIs) – are summary indicators, both financial and non financial that tell       staff what they have done, these can be measured daily, weekly, monthly, or quarterly.
  • Key Performance Indicators (KPIs) –are non financial measures that tell staff and management what to do to increase performance dramatically. These are measured either 24/7, daily, or weekly.  Like a building, this project is only as good as its foundation stones. The process owner needs to realize that there needs to be consultation with management and staff, empowerment to fix important problems on the spot rather than seeking their permission. A radical change to what is measured, and how measures are reported, and lastly these measures should be linked to the CSFs of the organisation and consistent with the strategic direction the organisation is travelling on. 
  • performance indicators (PIs) – are non financial measures tell staff and management what to do. These are measured daily, weekly, or monthly and are not as important as the KPIs.
In the next articles series, we will talk about the implementation of these complex indicators.
Written by:
Charles D. Taylor
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