Management White Paper: What Are Key Performance Questions?

Management White Paper
What are Key Performance Questions?
For more information please visit: www.ap-institute.com
What is a modern Balanced Scorecard?
API White Paper

By
Bernard Marr
Abstract:
Key Performance Questions (KPQs) are a new and important development in the
field of performance management. This management white paper describes in
simple terms what Key Performance Questions are and how they can be used to
guide the design of meaningful performance indicators and to engage people in
dialogue about performance. The management white paper includes detailed
guidance on how to create best-practice KPQs and includes many real life
examples.
Version: 11 June 2010

Bernard Marr is the Chief Executive and Director of Research at the Advanced Performance Institute.
E-mail: bernard.marr@ap-institute.com
The Advanced Performance Institute (API) is a world-leading independent research and advisory
organisation specialising in organisational performance. It provides expert knowledge, research, consulting
and training to performance orientated companies, governments and not-for-profit organisations across the
globe. For more reading material or information on how the API might be able to help your organisation please
visit: www.ap-institute.com
How to reference this management white paper study:

Marr, B. (2010) What are Key Performance Questions?, Management Case Study, The Advanced
Performance Institute (www.ap-institute.com).
2010 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com
Page 2
API White Paper
Introduction
The rationale for KPQs is that they focus our
The French philosopher Voltaire once advised to
attention on what actually needs to be discussed
judge of a man by his questions rather than by his
when we review performance and most importantly,
answers and Albert Einstein maintained that all he
they provide guidance for collecting meaningful
ever did was ask simple questions. If that was good
performance indicators.
enough for Einstein to turn the study of physics on

its head then it should certainly be good enough for
Far too often we jump straight to designing
those of us mere mortals who want to bring some
indicators before we are clear about what it is we
fresh
need to know. By first designing KPQs we are able
thinking
to
the
subject
of
strategic
performance management.
to identify our information needs and ask ourselves:

What is the best data and management information
Key Performance Indicators (KPIs) are designed to
we need to collect to help us answer our key
provide us with answers. Key Performance
performance questions? Starting with KPQs
Questions (KPQs) are designed to raise the most
ensures that, by default, all subsequently designed
important questions and trigger a search for
performance indicators are relevant. In addition,
answers. We often focus on finding answers without
KPQs put performance data into context and
asking the right questions. Nobel Prize winner Paul
therefore facilitate communication, guide discussion
A. Samuelson makes this point when he quite
and direct decision making.
rightly says "Good questions outrank easy

answers." In business we spend too much time and
It is important to remember that the main reason for
effort on answers and not enough time on
strategic performance management is to improve
questions. The concept of KPQs was developed to
future performance. Performance improvement is
change this.
based on learning. Deep and significant learning

occurs only as a result of reflection; and reflection is
Key Performance Questions or KPQs for short are a
not possible without a question. Key performance
new concept in the field of corporate performance
questions are therefore essential components of
management.1
A KPQ is a management question
good performance management. KPQs allow us to
that captures exactly what managers need to know
put data into context and turn it into knowledge (see
when it comes to each of their strategic objectives.
Figure 1).
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API White Paper
The Scientific Method

Any student of science learns that it is important to
know what you are looking for before you start
collecting any data. The basics of the scientific
method are that we first need to define a question
we want to explore, we then collect more
information and form a hypothesis. Only then do we
decide on the most appropriate research method
Figure 1: KPQs, KPIs and Learning
and collect the data, which we then analyse and

interpret to draw our conclusions about the question
Data and information are not useful on their own
we set out to answer.
and cannot be turned into knowledge or wisdom

unless we have questions we want to answer. Once
If we start collecting data without knowing what
we have got a question we can then use data to
answers we are looking for then we often end up
turn it into knowledge and learning. Without
collecting the wrong or unnecessary data and with
questions there can be no learning, and without
few insights about the really important questions we
learning there can be no improvement.
need answers to. This is a problem I see in so many

organisations I work with. A typical example is a
Google Example
company that wants to understand whether its
An example of how powerful KPQs can be in
employees, customers, or partners are happy. The
strategic performance management comes from
management team will often go straight to the
Google one of todays most successful and most
indicators and form a project team which looks for
admired companies. Googles CEO Eric Schmidt
the best ways of measuring this. They then end up
says2:
looking for generic and proven ways of collecting

such information and often adopt existing surveys.
We run the company by questions, not by answers.

So in the strategy process we've so far formulated
Of course it makes sense to build on what experts
30 questions that we have to answer [] You ask it
have developed over the years. However, in our
as a question, rather than a pithy answer, and that
desire to find measures and get our hands on the
stimulates conversation. Out of the conversation
data we often fail to clarify what it is we really want
comes innovation. Innovation is not something that I
to know. Once we have decided that e.g. the
just wake up one day and say 'I want to innovate.' I
relationships with our partners is important and we
think you get a better innovative culture if you ask it
ought to measure it, we need to pause and clarify
as a question.
what it is we want to understand. Here is where

KPQs come in defining the question or questions
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API White Paper
we want to have an answer to forces us to be more
things were going, the partners were telling a
specific and spell out what it is we want to know.
different story. When I spoke to some of their key
Once we have the question, we then have to ask
partners it became apparent very quickly that they
ourselves: what is the information we need to
were not happy with the way InterCorp was
answer this question and what is the best way of
collecting their data.
collecting this information?

One manager of a partner organization told me:
Practical Example
InterCorp is an important partner of ours and of
Let me give you an example. The major blue chip
course we want to ensure that we create a good
company InterCorp3 approached me to audit their
relationship. However, I am getting really annoyed
performance management approach, which is
with them. Twice a year they send me a six-page
something the Advanced Performance Institute
long survey which I need to complete. To collect all
does regularly with its clients. So we spent a few
the information takes me about 3 days and is a lot
days with the client to really understand their
of work. The problem is that I cant see why they
strategy,
need all of this data, a lot of the questions seem
key
performance
questions
and
performance information. As part of its strategy,
completely irrelevant to our partnership.
InterCorp had moved to a partnership business

model and for that reason it was critical to
After speaking to their partners I went back to
successfully manage the various partnerships it
InterCorp and asked a few more questions about
had. When the company moved to their partnership-
how they were using the information they were
based business model a few years back the
collecting in their surveys and how this was
organisations needed to find ways of measuring and
facilitating their decision making. It very quickly
assessing its partnerships. In their quest to find
became clear that all of the data they were
measures they came across an external company
collecting was interesting to know, but that was it.
which specialised in partnership evaluations and
Not one decision had been taken based on the
had designed a generic questionnaire to measure
survey data over the past 3 years. So in conclusion,
partnerships. InterCorp were pleased about this.
they were creating a lot of unnecessary work for
They signed up to this survey and outsourced their
themselves and most importantly for their partners,
data collection to this outside company who then
which started to undermine the very relationship
started to collect the partnership data twice a year.
they were trying to improve. This example is not a
InterCorp was pleased with the service as the
one-off I frequently see similar problems in
external company provided them with detailed
organizations all over the world.
reports containing graphs, tables and trend

analyses on about 50 different questions they asked
So how can KPQs help? In the case of InterCorp,
in their survey. While InterCorp was happy with how
they went back to the drawing board and identified
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API White Paper
the question(s) they really wanted to have an
the question the form included a scale. Initially this
answer to. The KPQ they came up with is How well
was a 10 point scale from very bad to very good.
are our partnerships progressing?
This was later refined into a 3 point scale. In

addition to the scale the form also included a field
Once they had a KPQ they then asked themselves
for a written comment (see Figure 2). Account
what data they would need to answer this question
managers were asked to assess the partnerships by
and what the best method would be to collect the
ticking a box on a scale and by providing a short
data. They needed data that would assess the
written comment on why they picked that particular
relationships but they didnt want to use the same
assessment.
Figure 1: Partnership KPQs
survey again as this was collecting too much
InterCorp realised that by only asking the account
unnecessary data. After some deliberation they
managers they might get a biased view on the
agreed that the best way forward would be to ask
situation,sohey decided to also e-mail the form to
their relationship managers or account managers
their partner companies. Preferring not to ask for
for an assessment. InterCorp realised that with their
any written assessment, the form used for the
account managers they had people in place that
partner companies only included the two scaled
would be able to make this assessment without the
questions. Once account managers and the partner
need for a lengthy survey.
company had completed the short survey the

results were compared in a database. In over 95%
They designed a system that automatically e-mailed
of the cases the internal and external assessments
a very simple form to the account managers with
were identical. Where major differences in opinion
just two questions: How would you assess the
occurred, the data base triggered another e-mail to
relationship with company X? and How well is the
the internal account manager prompting him or her
partnership with company X progressing? Next to
to pick up the phone and discuss any potential
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API White Paper
issues with the partner organization. InterCorp also
performance information is in helping us to answer
realised that they were not collecting such data
our KPQs.
frequently enough. They decided that monthly data

was required in order to be able to react to potential
Far too often do we circulate information without
issues early enough before they became big
providing the relevant context and far too often do
problems. InterCorp now has a very simple monthly
we expect people to collect data and information
data collection system in place, which allows them
without a question that puts it into context. I advise
to get all the information they need to answer their
my clients to always circulate KPQs with any data
KPQ.
they are reporting or collecting in order to provide

reference points and context. Also, if you ever feel
Carl Sagan writes We make our world significant
that you are collecting a lot of seemingly
by the courage of our questions and by the depth of
meaningless information in your organization then
our answers.4 Having the right questions in place
just ask the question: What is the KPQ we are
allows us to collect the right management
trying to answer with this data?
information so we can produce deep and

meaningful answers. Chapter X will discuss the
KPQs trigger a search to find answers
topic of designing key performance indicators in
Questions have a physical, mental and emotional
much more detail.
impact on us as humans. Once someone has asked

us a question it triggers a search mechanism in our
KPQs help us to interpret management

information
brains. This is the start of a thinking and reflection

process which constitutes the beginning of learning.
While KPQs help us to create better and more

meaningful performance indicators, they do so
KPQs indicate to everyone what is of most concern
much more. KPQs are able to put management
to the organization. In fact, when managers and
information and performance data into context.
executives ask questions they send recipients of

their questions on a mental journey or quest for
When we communicate performance indicators and
answers. Donald Peterson, former CEO of Ford
management information in reports or tables we
Motor Company, once said that asking more of the
often fail to communicate why this data is important
right questions reduced the need to have all the
and what it helps us to understand. However, if we
answers.
ensure
we
communicate
KPQs
with
the
management information and performance data it
Feeling comfortable with asking questions
allows any recipient to understand why any data is
In our society we are expected to be decisive and
relevant. It also allows us to make a judgement
know the answers to all the questions. We often feel
about
defensive when people ask us questions or we
how
useful
and
comprehensive
the
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API White Paper
hesitate to ask good questions in case it might
constitute zombie companies: a walking corpse
reveal that we dont know something. Many of us
that just doesnt yet know that its dead because
seem to have lost the ability to ask questions. This
this company has created an insulated culture that
is strange as it is the very ability to ask questions
systematically excludes any information that could
that allows us to learn. Just think of the ease and
contradict its reigning picture or reality6.
curiosity with which young children ask questions.

Human progress came about when man started to
KPQs need to be linked to the strategy
asked questions. Stagnation results not from a lack
KPQs derive from the definition of your strategy.
of answers but from the absence of meaningful
Once you have clarified your strategic objectives
questions.
and mapped them into a strategic map or value

creation map you can start designing KPQs. My
Michael
Marquardt,
Washington University
discourage
professor
states:5
questions,
George
suggestion is to design between one and three
In organizations that
KPQs for each strategic objective or strategic
information
at
is
usually
element. Obviously, the fewer KPQs the better
hoarded, people keep their heads down and stick to
because every KPQ will trigger performance
their knitting, and few people are willing to take any
indicators and we dont want to create an
risks, he continues, These organizations usually
unnecessary administrative burden in collecting
suffer from low staff morale, poor teamwork, and
data that is not really needed (see Figure 3).
Figure 3: KPQs Linked to Strategic Objectives
poor leadership. They become fossilized, even
Similarly to KPIs, it is far too easy to come up with
moribund.
Sydney
a whole host of questions and this is why some time
Finkelstein agrees and argues that organizations
needs to be taken to identify which question you
that are not able to ask the right questions
really need to answer. What is it you need to know
Management
professor
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API White Paper
in order to make better informed decisions? In the
the more likely it is that everybody will be pulling in
same way that your strategic objectives should be
the same direction.
unique, your KPQs should be unique and reflect the

requirements and foci of your organization at this
KPQs should be open questions
point in time. Moreover, they should be questions
Questions can be divided into two types: closed
you dont already know the answer to.
questions and open questions (see Figure 4 for

examples). These two types of questions are
Engage people in the KPQ design
actually very different in character, usage and
KPQs should not be designed in the boardroom
response. A closed question seeks a short and
alone. Designing KPQs is a great opportunity to
specific response that can be provided with either a
engage everyone in the organization as well as
single word or short phrase. Questions that can be
some external stakeholders. Try to involve people in
answered with either yes or no are generally
the process and ask them what question they would
closed questions. Closed questions are easy to
see as most relevant. Once you have designed a
answer and often seek simple facts: what, when,
list of KPQs take this back to the subject matter
where? They are closed because the control of the
experts or different parts within and outside the
conversation remains with the questioner. An open
organization to collect feedback. For example, take
question on the other hand opens the door to the
the KPQs that relate to marketing back to the
respondent and seeks an open-ended response.
marketing department to discuss and refine.
Open questions invite the respondent to think and
Remember that KPQs communicate to everyone
reflect and provide explanations, opinions or
what really matters in an organization and the more
feelings. Open questions often start with words such
people understand and agree with these questions
as what, why, how or describe. With open ended
Figure 4: Open versus closed questions
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API White Paper
questions the questioner hands control to the
be clear and not contain any jargon or abbreviations
respondent.
that external people might not understand.

Likewise, try to stay away from management buzz
Closed questions such as have we met our
words and ensure that the question is easy to
budget? can be answered with a simple yes or no
understand and uses language that people in your
without any further discussion or expansion on the
organization are comfortable with, understand and
issue. However, if we ask an open question such as
use.
how well are we managing our budget? the

question triggers a wider search for answers and
KPQs are refined through usage
seeks more than a yes or no response. Open
Once KPQs have been created it is worth waiting to
questions make us reflect, they engage our brains
see what answers come back i.e. how well the
to a much greater extent, and they invite
performance indicators are providing answers to the
explanations and ignite discussion and dialogue.
questions and how well the KPQs help people to
Whenever possible, KPQs should be phrased as
make better informed decisions. Once they are in
open questions.
use it is possible to refine them to improve the focus

even more.
KPQs should focus on the present and future

Questions should be phrased in a way that
Examples of KPQs
addresses the present or future: "Are we increasing
Below please find a selection of some KPQs
our market share?" instead of questions "Has our
developed by organizations I have worked with over
market share increased?" By focusing on the future
the years. These serve as examples only as each
we open up a dialogue that allows us to do
organization needs to design their own unique
something about the future. We then look at data in
KPQs in order to reflect their unique strategy and
a different light and try to understand what the data
address their own important issues.
and management information means for the future.

This helps with the interpretation of the data and
ensures we collect data that helps to inform our
decision making.
How well are we delivering our shareholder

requirements?
To what extent are we responding to the most
exciting opportunities that the market is offering?
KPQs should be short and clear
How well are we performing in sector X?
A good KPQ is relatively short, clear, and
To what extent are we enhancing our
unambiguous. A KPQ should only contain one

question. We often produce a string of questions
which makes it much harder to guide meaningful
international reputation?
How well are we meeting our customer needs in
segment X?
and focused data collection. The language should
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API White Paper
Conclusion
than all of the answers. This couldnt be more true
Knowledge and wisdom come from asking the right
for KPQs. In my opinion key performance questions
questions. When we ask questions instead of
are actually more important than KPIs and
focusing only on collecting answers, we invite
constitute one of the most important innovations in
people into the discussion. We engage the recipient
the field of strategic performance management to
in a dialogue and a search for answers. This in turn
date.
leads to reflection, learning and improvement. KPQs

can be extremely powerful management tools.
The U.S. humorist and cartoonist James Thurber
www.ap-institute.com
For more white papers, case studies
and reports visit www.ap-institute.com
said that It is better to know some of the questions
Endnotes, References & Further Reading
Marr, Bernard (2010), The Intelligent Company: Five Steps to Success

with Evidence-Based Management, Wiley, Oxford.
Marr, Bernard (2009), Managing and Delivering Performance,

Butterworth-Heinemann, Oxford.
Marr, Bernard (2006), Strategic Performance Management, ButterworthHeinemann, Oxford
Follow this link for more information on the books including sample chapters:
http://www.ap-institute.com/resources_books.asp
Page 11
API White Paper
The API Resource Library:
Our Resource Library offers a wide selection of relevant downloads and

links to books, articles and case studies. These have been selected as
useful information sources for further reading and to illustrate global best
practice and leading thinking.
To read more just click:
http://www.ap-institute.com/resources.htm
Other Management White Papers available:
How to design Key Performance Indicators
How to design a Strategy Map
Creating a Balanced Scorecard for a Public Sector and Not-for-Profit Organization
How to Avoid the Key Pitfalls of a Balanced Scorecard Implementation
The concept of Key Performance Questions was developed by Bernard Marr and the terms Key Performance
Question and KPQ are trademarks of the Advanced Performance Institute.
Eric Schmidt in an interview with Jeremy Caplan for TIME, October 02, 2006
Please note that InterCorp is a fictitious name chosen to protect the anonymity of our client.
Carl Sagan (1980), Cosmos, (page: 193)
Marquardt, M. (2005) Leading with Questions: How Leaders find the right solutions by knowing what to ask,
Jossey-Bass, San Francisco
Finkelstein, S. (2004) Zombie businesses: How to learn from their mistakes, No 32, pp. 25-31 (p. 25)
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Management White Paper

What are Key Performance Questions?

For more information please visit: www.ap-institute.com

What is a modern Balanced Scorecard?

API White Paper

What are Key Performance Questions?

Version: 11 June 2010

How to reference this management white paper study:

What is a modern Balanced Scorecard?

API White Paper

What are Key Performance Questions?

The rationale for KPQs is that they focus our

The French philosopher Voltaire once advised to

attention on what actually needs to be discussed

judge of a man by his questions rather than by his

when we review performance and most importantly,

answers and Albert Einstein maintained that all he

they provide guidance for collecting meaningful

ever did was ask simple questions. If that was good

enough for Einstein to turn the study of physics on

Far too often we jump straight to designing

those of us mere mortals who want to bring some

indicators before we are clear about what it is we

need to know. By first designing KPQs we are able

to identify our information needs and ask ourselves:

Key Performance Indicators (KPIs) are designed to

we need to collect to help us answer our key

provide us with answers. Key Performance

performance questions? Starting with KPQs

Questions (KPQs) are designed to raise the most

ensures that, by default, all subsequently designed

important questions and trigger a search for

performance indicators are relevant. In addition,

answers. We often focus on finding answers without

KPQs put performance data into context and

asking the right questions. Nobel Prize winner Paul

therefore facilitate communication, guide discussion

A. Samuelson makes this point when he quite

and direct decision making.

rightly says "Good questions outrank easy

It is important to remember that the main reason for

effort on answers and not enough time on

strategic performance management is to improve

questions. The concept of KPQs was developed to

future performance. Performance improvement is

based on learning. Deep and significant learning

Key Performance Questions or KPQs for short are a

not possible without a question. Key performance

new concept in the field of corporate performance

questions are therefore essential components of

A KPQ is a management question

good performance management. KPQs allow us to

that captures exactly what managers need to know

put data into context and turn it into knowledge (see

when it comes to each of their strategic objectives.

What is a modern Balanced Scorecard?

API White Paper

The Scientific Method

and collect the data, which we then analyse and

Data and information are not useful on their own

we set out to answer.

and cannot be turned into knowledge or wisdom

If we start collecting data without knowing what