Would KPI reflect Business Performance ?

This is a listed MNC in Bursa Malaysia who has been implementing KPI for the last 3 years. While the MD, Alex Khor met up with me, he commented that, “A lot of my friends have highly valued KPI. However, I don’t think it work for me !”

Out of the curiosity, we have volunteered ourselves to explore his current KPI Management System. After our KPI consulting analysis, we have discovered as per below :

  • Majority of their KPIs are not directly linked to “Business Performance”.
  • Majority of their KPIs are not Opportunities/Problems Oriented to solve their current Business/Operations Issues.
  • Majority of their KPIs set are “Activities” based, instead of “Results” based.
  • Some KPIs set are not trackable, except those Revenue related KPI.

With this, we have spent just several consulting mandays with HODs of the 10 key Divisions by tidying back their KPIs. And, the KPIs are also being linked to the Business Plan & Annual Budget set.

After this project, we are really proud to get this remarks from Alex Khor, “After so many years of implementing KPI, I only know how it work now” What has recalled me of what Alex Khor has said, “KPI will lose its value, if it fails to reflect Business Performance !”