Introduction

If you were to eavesdrop on just about any management or executive meeting, strategy session or performance review in any business you would hear the term ‘KPI’ mentioned many times in many different contexts. Most people in those discussions would know that the acronym stands for Key Performance Indicators but if you pressed each person to explain what a KPI actually is, it’s likely that you would hear many different definitions.

Business is challenging, especially during difficult economic times. It is also extremely competitive and our customers are becoming increasingly discerning. As a result business leaders and senior executives are all looking to improve performance, minimise errors and seek out new and novel ways to gain the edge over their competition. KPIs – when properly understood and used effectively provide a powerful tool in achieving just that.

Key Performance Indicators for Dummies was written as the definitive guide to KPIs for anyone wishing to separate the rhetoric and flavour-of-the-month- management fad approach from the genuinely useful information. Whilst coving the relevant theory this book is focused squarely on practical solutions to persistent business problems that KPIs can and do solve.

KPIs are a ubiquitous in modern business. They are everywhere – common almost. And yet businesses that are using KPIs correctly and effectively are not common. Knowing about KPIs and understanding their relevance is of course important and we’ll explore these essential topics in this book. But, when push comes to shove KPIs are only really useful if you identify the right ones to measure for your business and only measure those ones. They will only deliver mission critical data if you then use the KPIs and analyse what they tell you on a regular basis to inform and illuminate your decision making.

This book is therefore specifically designed to ensure that you design, implement and use KPIs correctly for the maximum impact with the minimum fuss. When used properly KPIs can become the compass that can guide you through even the choppiest of corporate waters leading your business to even greater success and prosperity.

About This Book

Key Performance Indicators for Dummies is your essential guide, or road map to effective KPIs and their successful implementation. It is jammed full of practical information, ideas, suggestions, tips, checklists, sample diagrams and figures designed to help anyone who wants to get the best out of KPIs. And that is true regardless of the type of business or industry you are in. KPIs are relevant to all businesses, in all industries as well as government departments and not for profit organisations.

The information contained in this book is deliberately accessible and covers everything you need to know about KPIs from the basics to more sophisticated insights that could further improve and fine tune existing KPI initiatives. As a result this book is essential reading whether you are new to business, in your first management role or a seasoned professional seeking some additional nuggets of wisdom to help squeeze just a little more value out of KPIs. If you are already familiar with KPIs this book will shine some light on the common problems or mistakes people make so you can rectify any errors that may be impairing your results. Re-inventing the wheel is time consuming and costly – learn from other people’s mistakes instead and make your KPIs matter right now. Ensure that they are the useful, insight and powerful business tools they were designed to be right from the start.

Consider this book your KPI reference guide and come back to it often. Try out the ideas and band and shape the advice to suit your situation in your business. Make it your own and allow KPIs to revolutionise your performance, inform your decision making and drive your strategy.

In order to make reading this book as easy as possible certain things are treated consistently:

• All Web addresses appear in monofont
• New terms appear in italics and are closely followed by an easy-to-understand definition.
• Bold text indicates keywords in bulleted lists or highlights the action parts of numbered steps.

If you decide to visit a Website listed in the book then you just need to copy the Web addresses exactly as it appears in the book. This is true even if the address falls between two pages – we will not have inserted any extra characters (such as hyphens) into the text.

Foolish Assumptions

In order to write a book you need to think about the audience. Who is most likely to read this book and once you know that you need to speak to that audience. For this book I’ve assumed that you are a manger, senior executive or leader within a business, government department or not-for-profit organisation seeking to better understand and utilise KPIs and improve performance. And I’ve also assumed that you are in a position to make changes or at least table changes within your organisation so that you can actually action what you read.

Icons Used in This Book

No one likes huge blocks of daunting text! These little icons are used to break up the text so that it’s easier and more enjoyable to read. They also flag important information and help you find that information again when you come back to the book.

These indicate expert advice or suggestions to fast track success. They are intended to help save time, effort, money or brain cells as you implement KPIs into your business.

This icon flags critical material that you should store away in your memory for later use. But don’t worry – they are usually very short.

As the name would suggest this icon flags potential pitfalls that you need to avoid as you become more and more familiar with KPIs.

The quickest, easiest and often most enjoyable way to really ‘get’ something is to read a true story, case study or real world example of the theory in practice. This icon flags those stories so you can learn quickly – often from others who have already walked your path.

Beyond the Book

In addition to the material in the print or e-book you’re reading right now, this product also comes with some access-anywhere goodies on the Web. Check out the free Cheat Sheet at www.dummies.com/cheatsheet/kpis for some helpful key checklists.

Furthermore, check out the website of the Advanced Performance Institute, which I founded and head up. There you will find many relevant case studies, white papers and reading material on KPIs and performance management: www.ap-institute.com.

Where to Go from Here

That’s entirely up to you. You can read this book in order from Chapter 1 to Chapter 21, but you don’t have to. So where you start reading will depend on how familiar and comfortable you are with KPIs already.

If you are new to KPIs, or are interested in or charged with designing a KPI agenda for your business, or changing the way KPIs are measured in your business then start at the beginning. Otherwise use the table of contents to find what you are most interested in and jump straight to that section. Whatever reading approach you take you will find a treasure trove of information that will allow you to unlock the power of KPIs for your business.