Rule of Three with One King


    In measurement and reporting of Business Process Performance in a variety of verticals, a variety of functions, I have never encountered any business process that required more than THREE Key Performance Indicators (KPIs).

    And usually one of them seems to be most important than others. This seems to be the King (or Queen!) of them all, the Super KPI!

    Let’s take a couple of examples.

    If you are considering a Customer Support Process over the telephone, Customer Satisfaction may be the Super KPI and two other performance measures like Overall Turnaround Time (TAT) and how many Discrete Interactions (in case of mixed media like Email, Phone Calls, Online Chats) it took to resolve the problem may be the other two measures. The others may not matter as long as Customer Satisfaction is high. You could resolve the customer’s problem in one interaction or ten but if the Customer is happy, the other measures may not matter.

    In a Voice Based Collections business process, the super KPI may be the Amount of Money Collected. Number of calls it took to do a collection and Average Time Spent on the phone many be other KPIs but the whole point of the business process is collections and that may be the most important metric.

    In an Insurance Underwriting business process, the Total Premium Value of the policies processed may be the Super KPI. Turnaround time (TAT) and Number of Policies processed may be other KPIs but may be subordinate to the Total Premium Value. Why? An underwriter that completes 10 policies worth $1,000 totally by following up diligently may be performing better than an underwriter who processes 20 policies worth $500. Of course, by having Number of Policies and TurnAround Time Averages as other KPIs, you can achieve a balance. That said, the Total Premium Value may be the super KPI.

    What is the value of thinking about a Super KPI and associate KPIs?

    Measurement and analysis starts out big with a lot of enthusiasm all around. Everybody wants reports emailed to them every day! Ask them after three weeks of this and 90% will tell you that they do not have time to read these reports, much less take any action on them. As the number of processes grow, collection and reporting grows linearly with them and pretty soon they become non-scalable! The technology needed becomes so complex that data collection and reporting break down. The number of people needed to collect, consolidate and report the information becomes larger and larger to become impractical when costs are compared to benefits!

    Keeping process measures to a handful with one KPI being the most important allows people to manage the information glut in a meaningful way and yet the Super KPI forces people to think about THE KEY GOAL of any business process. Every business process we have encountered has exactly one!

    How much time can a Chief Operating Officer spend on reading detailed reports about many KPIs in each process? Not much, realistically.

    By honing in on One Super KPI and two other important ones, people up the management hierarchy can get increasingly consolidated and rolled up metrics. At the same time they can make sure that their valuable time is spent on the most important metric in each process!

    The pressures on people today demand learning how to time shift.  When faced with obviously conflicting priorities that "cannot possibly be accomplished in the time frame," what alternative is there other than mind-numbing stress? The first thing is to assume there is a solution that can be achieved once you get internally coherent enough to perceive it. Internal coherence is the priority and can lead to surprising time-saving convenience.

    — Doc Childre and Bruce Cryer, From Chaos to Coherence


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