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KPI Name: Use a “what-it-say-is-what-it-is” type name, so that it doesn’t mislead. Be very careful with
terms like efficiency and effectiveness – there are thousands of variants on these and everyone seems to
have a strong view that their opinion is the right one.

Measurement Intent: Describes the measure and the reasoning behind its selection as an indicator of
progress against this strategic objective. Put simply “why are we measuring this?”

KPI Definition/Formula: Provide a detailed formula for the calculation of a numeric value for the measure.
A simple test for how well you have defined a KPI is to pose the question “Could a reasonably
numerate stranger calculated the value using this definition and provided source data?”.

Frequency of update: Identifies how often it’s calculated. This is important for a number of reasons, one of
the less obvious ones being “end effects”, where the reporting cycle may create some overlap errors. A
long reporting cycle usually lessens these, a short one will make this more acute.

Units of measure: Identifies the units in which the measure will be reported. Is it a dimensionless ratio
(e.g. efficiency) or is a good-ol-fashioned “real” measure with dimensions (e.g. kilograms, calls per day or
money)

Notes/Assumptions: Clarifies terms in the formula. Highlights key assumptions underlying the formula.
Almost all measures and KPIs have flaws, issues and problems. The key thing is to document these
issues, make people aware of them and avoid making flawed analysis based on these issues.

KPI Information availability: Whether the information required is: readily available, available with some
effort or not available. This gives you a feeling for the pain involved in compiling a KPI and can give you a
“hit list” for automating and streamlining KPI production.

Data elements and source: The data elements required to calculate this measure and the source
systems, databases, documents, etc., of those data elements. This should go down to painful levels of
detail, showing which server a file sits on, in which directory and where on the spreadsheet (for example)
the data can be found. Naming conventions should also be included where documents cover a certain
period.

Source for, and approach to, setting targets: Where does the target come from? Why is it set at the
level it is? I’ve seen countless organizations where no one can answer this question. Why are we aiming
for a certain score? It’s pretty embarrassing not to know the answer to this.

Person responsible for target setting: One person must ultimately be responsible for setting the target,
even if it’s agreed by consensus/debate/vote.

Person accountable for set targets: This is the person who carries the “strategic can” for the target
setting. They should be consulted on the target and it’s aims, but may not be responsible for setting its
actual value.

Person responsible for tracking and reporting targets: Who manages the day-to-day of target setting
and reporting?

Target (where known): What are the target(s) value(s)?
Each of these questions needs to be answered for each KPI and measure in the organization. Tedious?
Yes. Important? Also, yes. The definitions should be held in one document so that multiple definitions don’t
coexist – creating confusion and arguments.