AAOM Handbook

Control Measure

If a KPI indicates that a process is changing, or is likely to change, or an activity has been initiated to create a change in the KPI, other measures may be needed in order to make visible the factors that produce(d) the change. There may literally be dozens of factors that can influence a KPI. It is neither necessary nor practical to consistently monitor all of the possible factors that influence a KPI. These need only be measured and monitored when a KPI change is indicated or wanted. These many other possible measures are often called Control Measures since they are only necessary when a change in process control is occurring. The OPERATING MODEL definition of process KPI’s is the minimum set of measures that can fully inform us about the performance of the process. These can be classified into two groups; • Those that tell us about the outputs (purpose) of the process – these should cover the characteristics of Effectiveness, Efficiency and Sustainability. Note that the output of one process is always the input to another process. • Those that tell us about what is happening in (the theory of) the process; eg Right Work, Right Time, Right Way. All characteristics of the Purpose of the process should always be measured, either directly or through proxy measures, as these should be critical to the stakeholders of the process. When there is no significant hysteresis (ie a time lag between the theory and the ouput) or step change in the process the Theory measures do not need to be included in KPIs, unless it is as a proxy for a Purpose measure that is not practical to measure directly.. Where there is any significant hysteresis or step change in the process then the related Theory measures should always be included in the KPI set as they leading indicators of the future outputs. Since KPI’s are related to the Purpose and Theory of the process, they should not be altered unless the purpose and/or theory (ie design) of the process is altered. Key Performance Indicators – KPI:

Lagging Measure

A lagging metric is one where there is a time delay between an event that will cause a change in the measure and when the resulting change is seen in the measure.

The measures of the Purpose (output) of a process often significantly lag the measures of the Theory of the process.

© McAlear Management Consultants 2004

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