Do you have the right KPI’s?
Earlier this year, at the 25th Annual MainStream conference, our Managing Director Craig Hurkett had the opportunity to discuss the topic “Are you Measuring to Manage – Or Are You Just Measuring” with Cliff Williams, author of the book, “People – A Reliability Success Story”. Cliff is a thirty-year plus veteran of the maintenance field. He has worked in the paper and steel industries and with food giants such as Coca Cola, Kraft and Wrigleys.
The session provided insights into the actual value of KPI’s and how best to utilise them to drive the right behaviours and improve your operations’ performance. Craig asked the question Cliff during the talk, how do you decide on the best KPI’s?
Cliff talked through starting with the organisations Strategic Goals to determine the Critical Success Factors. The best KPI’s to select are the ones that measure how well you are achieving these success factors. In theory, if you achieve all your KPI’s, then you’ll also complete your Critical Success Factors and ultimately reach your organisation’s goals. An example of this is shown in the figure below. KPI’s are developed by starting with the strategic objectives, determining what success looks like and measuring this success (blue arrows). Strategic goals are met when the KPI’s results deliver success in the areas defined to matter most (green arrows) as the plan executes.
Cliff and Craig discussed how understanding the underlying result and what it tells you about the equipment performance or underlying culture drives the next-level performance. For example, “schedule compliance” is less about the performance of the planning department and more about the organisation’s ability to collaborate to develop and execute an achievable plan. The suitable KPI’s of “schedule compliance” measures the integrated performance of supply, planning, maintenance, and operations departments combined.
The mistake made in many organisations is that they develop an annual plan for the overall business without then taking the time to cascade this down to determine the critical success factors and KPI’s for each department. If they’d taken the time to create this alignment, they would have developed a robust plan for the coming year and generated buy-in to the program from all their teams. Employees who understand each KPI’s context are more likely to exhibit the positive behaviours that drive performance against this metric. Leaders that make an effort to provide the context are often pleasantly surprised by what their teams can achieve.
It is challenging for any organisation to develop the right mix of KPI’s for their business as their business matures and their objectives change. At EnterpriseIS, we’ve helped our clients through all stages of KPI’s development. We’ve partnered with companies during their annual planning process to develop the Business Plans for the whole of the organisation and then cascade these down to develop the plans for each department. During this process, we’ve helped determine the critical success factors and the suitable KPI’s that, when cascaded up, will ultimately deliver the overall results of the business. We’ve then provided ground coaching and improvement support to specific departments critical in achieving the overall business outcomes. For example, we’re currently in the process of analysing months of data to determine:
- where a mining operation should put their limited improvement resources to get the most significant improvement
- whilst also helping another function with a cultural change program using Lean Team Boards as an enabler to achieve KPI’s
Suppose you need any help in developing business plans. In that case, critical success factors, KPIs, or you need an injection of business improvement support or coaching in specific areas that are critical to achieving your business goals; please reach out for a chat. If we understand what success looks like for you, we can tailor a solution to achieve your goals.
Contact us today. We have case studies on projects completed for clients in Asset Management, Operational Readiness, Operational Excellence and Reliability Engineering.