The 7% Solution - Driving Benefits - KPIs - Tip #7 -


As we near the end of the 7% solution programme, there is one more activity that you should be thinking to optimise. In order to improve efficiency I have covered some of the practical steps you can take to increase productivity and then I started to look at ways to raise standards by implementing some control mechanisms. Tying all this together requires a feedback mechanism so that you can build up information about whether and how fast things may be improving, and the best way to do this is to use summarise the appropriate data in KPI reports.

You may be familiar with the idea of SMART objectives. For the 7% solution program

  • The Specific goal is to reduce your direct labour requirements by 7%
  • This is Measurable using basic business metrics
  • It is an Achievable goal
  • In all but the most highly developed and efficient operations, it is a Realistic target
  • With a good plan you can set yourself a clear Timescale for delivering the objective

Key Performance Indicators

In order to measure success you need to identify and measure the appropriate metrics and organise this information so that it can be added into your Key Performance Indicator dashboard, or balanced scorecard. It is important to measure the specific KPIs for this objective, to measure success, but also to understand the business context, and to keep an eye out for any unexpected consequences.

It’s not necessary to go into a lot of detail here about KPIs, there is plenty of information and advice that is easy to find. I would say that there are many pitfalls. My main advice would be to take great care at every stage to validate your data and your metrics;

  • There are often multiple sources of data, which one is the right one?
  • Can you rely on that source remaining stable over time?
  • Are you going to have to apply a calculation to your source data to convert it into the right form?
  • Is this data consistent with the other data you may be making comparisons to in your reporting?
  • Do you have validation steps in you reporting process to maintain accuracy?
  • Have you documented the origin of the data, the metrics and the KPI?

There have been many occasions where I have looked at KPI reports provided by businesses and thought that the numbers just don’t look right. Sometimes there will be a simple formula error, sometimes the problem is with the source data and sometimes comparable data is telling such a contrasting story that there has to be problem. Although the corrections to be are usually straight-forward the implications for the business of doing the re-calculation and changing the whole nature of the performance reporting outcomes can be very unsettling.

Having said all that, KPI reports remain a critical tool for businesses to monitor performance and there is great value to be had from creating a relevant and effective reporting process. We are all data rich now, it makes sense to utilise it to add value.