Aaron U. Bolin's Blog, page 4
January 14, 2014
Key Performance Indicators in a Nutshell
KPI Definition
Key Performance Indicators (KPI's) are measured evidence that desired business results are being achieved. KPI's are feedback about how the business is performing.
KPI's are essentially metrics linked in a meaningful way to an important business objective. These are the "critical few" measures that you need to know to get the job done.Goals define the end results we hope to achieve, and KPI's define the measurements used to monitor progress toward goal attainment.As a general rule, if you will not make business decisions based on a measure, then that measure is not a KPI.
Purpose of KPI's
When structured to reflect business strategy, KPI's provide business owners with answers to important business questions, help managers understand how their organizations are performing in relation to their strategic goals, and provide an indicator to determine whether performance is on track.
The term KPI tends to be misunderstood and overused as a buzzword. The KPI bottom line is that good measurement provides timely feedback to make quality decisions at the right time.
Getting Started with KPI's
First, You Have to Understand Your Business and Business Goals. What are your real business objectives and what does success look like for your company? What is its vision and current mission?Second, You Have to Select a Specific Goal That is Important to Achieve. People do not care about measures - they care about problems (i.e., fixing them). To understand your business objectives, it is important to drill down into specific aspects of why your company exists and what is it trying to achieve.Third, You Have to Set Relevant KPI Metrics for A Specific Goal. KPIs are concrete measurements that provide empirical data about your businesses progress. For any active goal, a gap exists between current reality and the desired end state. A KPI measures the size of that current-vs.-desired gap.Fourth, You Have to Define a Specific Data Source and Method for Determining the Value of the KPI. If a KPI is going to be of any value, there must be a way to accurately define and measure it. Data quality matters, but beginning with imperfect data is vastly superior to waiting until perfect data is available.Fifth, You Have to Take Action. Interpret what your KPI is saying, and why. Context is often important, so you may need to view the KPI along with other relevant measures. Most important, make a decision and take action to move closer to your goal.
Two Examples
Objective: lose 20 pounds. To achieve this, you set a KPI to illustrate your progress toward your goal. How many pounds do you want to lose each week?
Objective: build your cash reserve to $100,000. Your KPI to reach that goal would be to add $10,000 per month to cash reserves. The metric would be how much cash you actually contribute toward the total goal.[image error]
Key Performance Indicators in a Nutshell
KPI Definition
Key Performance Indicators (KPI's) are measured evidence that desired business results are being achieved. KPI's are feedback about how the business is performing.
KPI's are essentially metrics linked in a meaningful way to an important business objective. These are the "critical few" measures that you need to know to get the job done.Goals define the end results we hope to achieve, and KPI's define the measurements used to monitor progress toward goal attainment.As a general rule, if you will not make business decisions based on a measure, then that measure is not a KPI.
Purpose of KPI's
When structured to reflect business strategy, KPI's provide business owners with answers to important business questions, help managers understand how their organizations are performing in relation to their strategic goals, and provide an indicator to determine whether performance is on track.
The term KPI tends to be misunderstood and overused as a buzzword. The KPI bottom line is that good measurement provides timely feedback to make quality decisions at the right time.
Getting Started with KPI's
First, You Have to Understand Your Business and Business Goals. What are your real business objectives and what does success look like for your company? What is its vision and current mission?Second, You Have to Select a Specific Goal That is Important to Achieve. People do not care about measures - they care about problems (i.e., fixing them). To understand your business objectives, it is important to drill down into specific aspects of why your company exists and what is it trying to achieve.Third, You Have to Set Relevant KPI Metrics for A Specific Goal. KPIs are concrete measurements that provide empirical data about your businesses progress. For any active goal, a gap exists between current reality and the desired end state. A KPI measures the size of that current-vs.-desired gap.Fourth, You Have to Define a Specific Data Source and Method for Determining the Value of the KPI. If a KPI is going to be of any value, there must be a way to accurately define and measure it. Data quality matters, but beginning with imperfect data is vastly superior to waiting until perfect data is available.Fifth, You Have to Take Action. Interpret what your KPI is saying, and why. Context is often important, so you may need to view the KPI along with other relevant measures. Most important, make a decision and take action to move closer to your goal.
Two Examples
Objective: lose 20 pounds. To achieve this, you set a KPI to illustrate your progress toward your goal. How many pounds do you want to lose each week?
Objective: build your cash reserve to $100,000. Your KPI to reach that goal would be to add $10,000 per month to cash reserves. The metric would be how much cash you actually contribute toward the total goal.
November 14, 2013
A Statapult World Record
A Statapult World Record
August 22, 2013
Unaware of Danger
In 50-some-odd performance improvement projects, I have noticed a strong and consistent trend. For every 10 improvements proposed, 8 will be endorsed by the sponsor as valid, and roughly 3 will be implemented.
The reason: proposed improvements almost always focus on the cat ahead, but sponsors see both the cat ahead and the potential cats coming from other directions.
June 25, 2013
A Novel Review: Suburban Days by Aaron U. Bolin
A Novel Review: Suburban Days by Aaron U. Bolin: Reviewed by Charlotte Lynn Taken from Goodreads: Trapped in obscurity, Eric Sage must establish his own identity. He battles a ho...
The Lean Toolbox: The Essential Guide to Lean Transformat...
The Lean Toolbox: The Essential Guide to Lean Transformation by John BichenoMy rating: 4 of 5 stars
The Lean Toolkit is a concise reference of lean tools and techniques. Every tool is presented with a brief summary and some suggestions for how to apply it.
Overall, I thought it was a valuable reference. It introduced me to several new tools and reinforced many of the tools that were already familiar.
In terms of criticism, this probably isn't a book that you would sit down and read cover to cover. I browsed the topics, and I will return to it periodically as a reference.
I liked it, and I would recommend it for lean students and practitioners.
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June 18, 2013
Jumping to Solutions
Example 1. We have this new communications system, and no one is using it. Our metrics for success are enrollment and utilization.
Example 2. Our production capacity is going to be restricted by the mandatory inspections, so we need to increase the speed of our post-inspection processing by adding manpower.
Example 3. Our production quality sucks right now; the issue is accountability. Once the managers start holding the production team responsible for quality, then quality will take care of itself.
Example 4. The reports we generate do not have a consistent format or presentation. Once we develop standard operating procedures for each report...
Jumping to the solution is the default problem solving methodology in many organizations. Because the seeds of the solution are always contained in the problem, responding quickly is often rewarded with initial success. However, a quick response is rarely a comprehensive response. A communications system that no one uses might simply be unnecessary; increasing manpower after an inspection bottleneck will not improve the overall system production; and the system itself should be held accountable for quality, not the individual.
One principle of continuous process improvement is to slow down and apply a disciplined approach to problem solving. Instead of jumping to solutions, take some time to fully define the problem, gather baseline information, and analyze the gaps between the present and desired circumstances.
June 5, 2013
May 8, 2013
What the Best College Teachers Do by Ken Bain
What the Best College Teachers Do by Ken BainMy rating: 4 of 5 stars
I thought Bain's "What the Best College Teachers Do" was excellent. It is well-written and packed with useful insight throughout.
In terms of criticism, two things come to mind.
First, the book seems to be an academic paper expanded to book form. As such, there is plenty of fluff. Some of the fluff is useful and adds embellishment to Bain's main points, but some of the fluff is just fluff.
Second, Bain's tone throughout the book is one of objective reporter. The tone is a perfect fit for the subject matter and helps the book feel like a discussion. I loved it. In the last few chapters, the tone switches abruptly to preaching. I did not like the preachy tone; it was a big turnoff to me.
Overall, I thought the book was useful and very well done. I recommend it to anyone (college profs, high school teacher, trainers, etc.) who ever tried to connect with students. The insights offered here will be useful to seasoned pros and rank amateurs. Very nice.
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