A successful strategy leads to increased revenue from the target audience, and sometimes outside of it. It goes without saying that companies also hope to achieve greater profits in doing so, but this depends on the operational costs. The desired strategy shows an upwards-trending line of revenue and profits. But that dream is cruelly disrupted: all good things must come to an end. The central tenet behind the strategy's life cycle is that revenue will not keep increasing forever, due to all kinds of factors (saturation, competition, etc). At some point - we don't know when - revenue will stabilize and then decrease. The organization can't keep generating the same revenue using the old strategy. At this point, it's time for a new product offering, strategy, or cycle.
When developing a KPI system, you have to identify search fields and translate them into one or several yardsticks. After that the targets are defined, possibly with gradations or tolerances. Connect this to a measuring system and you’re in business. In practice, that means making clear agreements about how and when to measure, the design, and the starting date of an indicator. These are all important factors. But keep in mind our division of the Measuring Plan (yardstick, target, measuring system, and reporting).
Many organizations are paying more and more attention to PDCA and continuous improvement. That's no surprise, because this powerful improvement method leads to much better results. PDCA is embedded in the heart of every intelligent organization. If you want to successfully apply the PDCA methodology, you have to be cautious. There's a slim margin for error. Employees have to be inspired and mobilized, feel appreciated, and be able to reflect on their actions. Without taking the right steps, the approach could fail, and your team might sour on the whole approach. Here, we've compiled the 5 biggest pitfalls to avoid when implementing PDCA.
From time to time, the debate about the usefulness of KPIs rears its head. Recently, two Insead Professors, S. David Young and Kevin Kaiser, wrote that KPIs are not good barometers for value creation. Indeed, they say that KPIs often destroy value. KPIs send the wrong stimuli to employees, because they are rewarded based on hitting arbitrary targets. [global name="*PE*20190"] It's often said that KPIs are controllers, and that they slow down the pace of change and innovation. That would explain the interest in new organizing principles and behavioral influence. Does this kind of criticism of KPIs lead to the "classical" quantification of performance, including the search for KPIs, shifting to the background? I don't think so.
Karl E. Weick, in 1969, already talked about "organizing" instead of "organization" in his revolutionary book The Social Psychology of Organizing. With that, he turned the earlier philosophy of organizations on its head. "To organize" is a verb, which is precisely the difference between it and the static noun "organization". It implies action. It's about what people agree to do, and what image is created by the process of interaction.