The Art and Technique of Developing Key Performance Indicators

The Art and Technique of Developing Key Performance Indicators
KPI Dr. Abdulaziz Saddique Pharm.D., CPHQ,SSMBB, KPI PROFESSIONAL AND PRACTIONER

Course Objectives Following the attendance of this course participants will: Understand the value of KPI Appreciate the value of KPI implementation Be able to select and develop KPI for their own service Be able to develop performance improvement system for their services Be able to monitor their services using KPI

Agenda Key Performance Indicators Consumer-Directed Health Care
Definition Purpose Benefits Consumer-Directed Health Care Why Don’t Employees Care? Why Do Employers Care? 3

Agenda (cont’d) Performance Measurement vs Management
Value of Performance Measurement Basics for Performance Management Terms linked to performance Integration Tools KPI Terminology Pillars of Architecture KPI life Cycle 4

Agenda (cont’d) KPI Establishment Project KPI Source
Organizational Strategy Departmental Strategy Processes Strategy Map Balance Score Card KPI development KPI documentation and Reporting 5

Agenda (cont’d) KPI selection KPI documentation
KPI Typology KPI trend Value flow analysis KPI selection criteria KPI documentation 5 Steps for KPI development

Even the VERY BEST Keep Score!
“In business, words are words, explanations are explanations, promises are promises, but only performance is reality.” Harold S. Geneen Former President and CEO of ITT

Even the VERY BEST Keep Score!
Ten Top Issues for 2016 Balancing clinical and financial issues Getting ready for pay-for-performance Implementing the EHR Making pricing transparent Boosting the revenue cycle Developing new capital-access strategies Increasing financial-reporting transparency Updating charity care policies and procedures Improving leadership skills Dealing with staffing shortages SOURCE: Veach, M., What’s on Your Plate?, hfm, Jan 06

Where’s Your Focus? ON PERFORMANCE 9

Key Performance Indicators
Let’s Define Terms Key Performance Indicators

What is a Key Performance Indicator?
Numerical factor Used to quantitatively measure performance Activities, volumes, etc. Business processes Clinical processes Financial assets Functional groups Service lines The entire enterprise SOURCE: BearingPoint, Key Performance Indicators

Purposes of KPIs View a snapshot of performance at an individual, group, department, hospital, or regional level Assess the current situation and determine root causes of identified problem areas Set goals, expectations, and financial incentives for any individual, group, or enterprise Trend the performance of the selected individual, group, or enterprise over time SOURCE: BearingPoint, Key Performance Indicators 12

Benefits of Using KPIs Increases management awareness
Focuses attention on improvement opportunities Increasing Cash Flow Improving Clinical Quality Reducing Costs Identifying Problem Areas Benchmarking Illustrating Trends Scoring Performance Reducing Denials Developing Consistent Processes and Outcomes Developing “Best Practices” Improving / Accelerating Management Reporting Monitoring Staffing Levels

Consumer-Directed Health Care
A Whole New Ballgame!

Medical Consumerism Coming
“Managed care was designed to put control where there was none. Today’s trend towards consumerism attempts to inject something that’s been missing from health benefits – a consumer who cares more about cost and quality.”

Why Don’t Employees Care?
Employees don’t see the benefit of KPI Employees don’t understand the value of KPI Employees don’t appreciate KPI benefits Employees benefits has nothing to do with KPI Employees see KPI as extra work Employees see no value of Performance improvement SOURCE: Take Care of Yourself, PwC, 2005

Why Don’t Employees Care?
All employees are equal the difference is the pay check. No incentives are set for the employees No clear benefits set by the organization to demonstrate the benefit of KPI SOURCE: Take Care of Yourself, PwC, 2005

Why Do Employers Care? If performance measurement is applied
Performance affect they pay check Employees were enlightened about the value of KPI Employees have clear path of development and growth within the organization Employees were empowered by the organization

Why Do Employers Care? Organization invest in its employees by
Financial incentives Education Innovative healthcare programs Organization sees the future of the Organization by investing in their most valuable assets, the Employees Think price + quality info could change behavior and reduce costs, but hard to obtain / distribute

Performance Measurement vs Performance Management

PERFORMANCE MEASUREMENT VS PERFORMANCE MANAGEMENT
evaluation and assessment of results. taking action based on the results of the evaluation to ensure targets achieved. Sub-process of performance management The overarching discipline that deals with performance. Reflects the approach one entity has towards performance Focuses on the identification of KPIs Includes sub-processes such as: tracking of KPIs The formulation of a plan communication KPIs results Actively monitoring implementation Readjusting the plan Performance measurement Capability development The World of KPIs

TERMS & TOOLS LINKED TO “PERFORMANCE”
Budgets KPIs Reports Communications Meetings Rewards Dashboards Objectives Scorecards Discussions Performance reviews Targets Forums Plans Technology Goals Projects Training … Plenty of tools already in use in most organizations… …we need to use them in alignment through a Performance Management System. Better structure, alignment, integration and use of what is already in place is the answer to improve performance management practices.

INTEGRATION OF TOOLS WITHIN A PERFORMANCE MANAGEMENT SYSTEM
Organizational Level Departmental Level Individual Level System Map Individual performance plans Desired State of Evolution Performance evaluations Strategy Map Performance conversations Performance Scorecard Organisational KPI Catalogue Personal Level Portfolio of Initiatives Personal performance plans Dashboard Performance reviews Performance review meetings The World of KPIs

ORGANIZATIONAL STRATEGY
SYSTEM INTEGRATION ORGANIZATIONAL STRATEGY INTEGRATED PERFORMANCE MANAGEMENT SYSTEM OUTCOMES OUTCOMES

EXERCISE: UNDERSTANDING PERFORMANCE MANAGEMENT TOOLS
Match Description No. Tool 90% 1 Goal # Employees 2 KPI % Employee satisfaction 3 Initiative Change Management Program 4 Metric Complete 50% of the project by 30 June 5 Milestone Identify key positions for the succession plan draft 6 Mission Statement Integrity 7 Program Optimize recruitment 8 Objective Provide best talent for the business 9 Target Quality 10 Task To be the regional destination provider of innovative and complex care, setting the standard in the field. 11 Value Driver Succession plan roll-out 12 Value Statement To provide medical care services at high quality standards to the citizens of the country. 13 Vision Statement The World of KPIs

KPI RELATED TERMINOLOGY
KPIs – to evaluate performance Key Result Areas (KRAs) Key Performance Indicators (KPIs) Performance Indicators (Pis) Measures Metrics Key Result Indicators (KRIs) Analytics Evaluation criteria OPTION 1 Metrics – to inform decisions OPTION 2 KRAs KPIs PIs Measures The World of KPIs

METRICS – KPIs- KRIs - ANALYTICS
Decision Making Performance Assessment KPIs Risk Assessment KRIs Measurement Metrics Analytics The World of KPIs

METRICS # Air temperature # Air humidity # Air purity
# Square meters per room # Lumen per square metre (lux) # Employees # Highway kilometres # Employee age # Working hours per year # Car weight $ Budget # Local hotels The World of KPIs

KPIs % Net promoter score % Budget variance % Employee turnover
% Hotel occupancy rate $ Earnings # Time to process requests % Conversion rate The World of KPIs

% Large customers in financial difficulty
KEY RISK INDICATORS Key risk indicators are metrics used by organizations to provide an early signal of increasing risk exposures in various areas of the enterprise. Objective: Manage the collection of accounts receivable to reduce loss due to write-offs Key Performance Indicator (KPI) Key Risk Indicator (KRI) Data about write-offs of accounts in most recent month, quarter, year. Analysis of reported financial results for the company’s 25 largest customers or general collection challenges throughout the industry that highlight trends signaling future collection concerns. $ Write-offs of accounts % Large customers in financial difficulty Linking Objectives to Strategies to Risks to KRI’s Potential Risk KRI KPI Strategic Initiative #1 Increase Revenues Potential Risk KRI KPI Strategic Initiative #2 Potential Risk KRI Profitability KPI Strategic Initiative #3 Potential Risk KRI Reduce Costs Strategic Initiative #4 Potential Risk KRI KPI The World of KPIs

EXERCISE: WHICH OF THE STATEMENTS BELOW ARE KPIS?
% Employee satisfaction $ Turnover Finalise project by 31 December # Clients from referrals # Employees % Projects on time and on budget Quality # Defects $ Budget Increase market share to 28% KPI Definition: A measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity. The World of KPIs

DECOMPOSING SMART OBJECTIVES
= Objective + KPI Target Timeframe Responsible Increase customers base to reach 20% market share by FY end under Sales Director leadership Increase customers base % Market share 20% By Financial Year End Sales Director 1 2 2 The World of KPIs

TERMINOLOGY STANDARDS
Objectives – start with verbs KPIs – start with symbols $ = Value of # = Number of % = Percentage of Initiatives – start with nouns or adjectives Maintain high levels of profitability $ Revenue per patient per day # Patients treated % Hospital bed occupancy rate Customer Relationship Management software implementation The World of KPIs

SESSION REVIEW Value added by KPIs: clarity – focus – improvement;
Performance measurement: a sub-process of performance management; The integration levels of performance management: organizational, departmental, individual and personal; KPI definition: a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity. Metrics: used for measurement. KPIs: when showing performance. KRIs: when showing risk. Analytics: when used for decision making; Terminology standards: objectives start with a verb, KPIs start with symbols (#, %, $), initiatives start with a noun; The World of KPIs

The Pillars of Architecture
Interdisciplinary systemic worldview KPI Management Framework Concept Map KPI lifecycle KPI use case scenarios KPI architecture toolkit KPI architecture skills Key Learning Points Understand the KPI management framework Cover the 3 stages of a KPI lifecycle Identify 18 specific contexts where KPIs can be used Analyze 9 tools of the performance management toolkit Have an overview of the annually and monthly performance management process

AN INTEGRATED APPROACH TO PERFORMANCE MANAGEMENT: FROM STRATEGY TO RESULTS

KPI MANAGEMENT FRAMEWORK CONCEPT MAP

The Pillars of KPI Architecture

KPI ESTABLISHMENT PROJECT PLAN
Communication and stakeholder engagement KPI reporting Inform staff and management Data gathering Consult relevant stakeholders Report generation Establish online presence Report analysis KPI selection KPI value generation Primary/ secondary/ internal/ external research Decision making KPI selection workshop Initiative management Results communication KPI documentation and activation Documentation form completion KPI maintenance Data gathering arrangements Documentation refresh The Pillars of KPI Architecture

KPI Source: Organizational Strategic Plan Departmental Strategic Plan
Operations We may also use: Benchmarking

ORGANIZATIONAL LEVELS
Strategic Individual Operational Team Strategic / organizational performance management At strategic level, performance management deals with the achievement of the overall organizational objectives. It is referred to as corporate, business or enterprise performance management. Operational / departmental performance management Is in the realm of operational management, as it serves is the achievement of operational objectives. Although aligned with corporate strategy, it has a functional focus, using tools such as dashboards and scorecards. HR Dashboards are used to collect and analyze human resources management indicators that guide the management decisions of HR departments. Similar tools in other functional areas are Marketing Scorecards, Portfolio Dashboards and Supplier Scorecards. Individual performance management The traditional level at which performance management is used in organizations is the individual level, looking at the performance of employees in the context of the organization in which they work. The Pillars of KPI Architecture

KPI USE CASE SCENARIOS The Pillars of KPI Architecture

1. ORGANIZATIONAL STRATEGY
The Pillars of KPI Architecture

2. ORGANIZATIONAL OPERATIONS STRATEGY
Source: The Pillars of KPI Architecture

3. DEPARTMENTAL STRATEGY

4. DEPARTMENTAL OPERATIONS TRACKING

5. QUALITY / PROCESS MANAGEMENT

5. QUALITY / PROCESS MANAGEMENT
Process improvement Wait Time (non value add) Before After Work Time (value add) Capacity Cash flow Customer satisfaction Customer responsiveness On time delivery Productivity Profit Quality Cost Defects Lead time Inventory Space Waste! The Pillars of KPI Architecture

6. EMPLOYEE PERFORMANCE MANAGEMENT

7. PERSONAL MANAGEMENT The Pillars of KPI Architecture

8. SUSTAINABILITY PERFORMANCE REPORTING

9. GENERAL OPERATIONAL REPORTING

PERFORMANCE MANAGEMENT SYSTEM ARCHITECTURE

1. DESIRED STATE OF EVOLUTION

2. STRATEGY MAP The Pillars of KPI Architecture

3. PERFORMANCE SCORECARD

4. PERFORMANCE DASHBOARD

5. KPI DOCUMENTATION FORM

6. KPI REPORT FORM The Pillars of KPI Architecture

7. PORTFOLIO OF INITIATIVES

8. INITIATIVE DESCRIPTION FORM

PERFORMANCE MANAGEMENT PROCESS
Monthly Develop the strategy KPI listing and selection KPI documentation Data gathering and reporting Review meeting analysis Initiatives portfolio Double loop learning: Review scorecard Annually The Pillars of KPI Architecture

KPI ARCHITECTURE SKILLS
Interpersonal Coaching Facilitation Communication Performance Management Strategy Performance architecture Data visualization Technology Microsoft Excel Dashboard/ Scorecard Software Microsoft PowerPoint Data Research Analysis Synthesis The Pillars of KPI Architecture

SESSION REVIEW Stages of the KPI lifecycle: establishment, use, evolution; Examples of 18 KPIs use case scenarios; Components of the Performance Management Toolkit: Desired State of Evolution; Strategy Map; Scorecard; Dashboard; The steps of the annually and monthly performance management processes; Cascading KPIs from organizational to departmental and individual level; The set of KPI architecture skills: data, technology, performance management, interpersonal. KPI Documentation Form; KPI Report Form; Portfolio of Initiatives; Initiative Description Form. The Pillars of KPI Architecture

KPI SELECTION 3 1 Key Learning Points KPI typology
DAY 1 DAY 2 DAY 3 KPI typology KPI selection preparation KPI selection techniques Data Gathering and Reporting KPI Management Enablers The World of KPIs The World of KPIs 3 1 The Pillars of KPI Architecture Generating Value from Using KPIs Data Visualization Key Learning Points Understand KPIs typology and their characteristics Identify relevant sources for selecting KPIs Exercise 7 KPI selection techniques Understand the importance of KPI filtering criteria KPI Documentation KPI Selection Review

KPI TYPOLOGY Availability: Existing / Potential
Data quality: Low / Medium / High Data source: Internal / External / Mixt (data comes from within the company or outside) Frequency of reporting: Daily to Annually Generation: Automated / Determined (if data generated automatically or the KPI needs to be calculated) Independency: Primary / Secondary (it does not or does rely on other KPIs to be calculated) Indicator focus: Leading / Lagging Influence: Human / Technological (exposed more to human errors or to system errors) KPI Selection

KPI TYPOLOGY Impact stage: Input / Process / Output / Outcome
Level: Strategic / Operational Popularity: General / Occasional / Particular (how often is used among companies) Reflects Efficiency / Effectiveness, Quality / Quantity Status: Active / Inactive Transparency: Public / Internal (the KPI is published for a wide audience or reported only within the organization) Trend: Increasing / Decreasing / Within range

KPIs BY TREND Increasing Within range Decreasing KPI Selection

QUALITATIVE KPIs? Provide timely high-quality advice meeting ministerial expectations % Advice provided on time # Versions for advice reports % Satisfaction with advice NCOS implementation NCAT implementation Ensure timely and smooth processing of applications % Applications processed within SLA timeframe % Applications processes correctly first time # Average delay in processing applications KPI Selection

THE ROOTS OF THE LEADING / LAGGING INDICATORS IDEA
Leading indicators = measure things that address what can create future value Lagging indicators = look back at past performance Vs. In May 1938, Wesley C. Mitchell and Arthur F. Burns published a research study in the National Bureau of Economic Research (NBER) Bulleting 69, under the title “Statistical indicators of cyclical revivals” and classified series in lead, coincident and lag. Their work was continued by Geoffrey H. Moore, who in 1983, published a paper called “When lagging indicators lead: The history of an idea”. KPI Selection

LEADING VS LAGGING INDICATORS
% Applications processed on time % Employee satisfaction leading for # Court cases % Salary variance from industry average lagging for # Arrests leading for # Police workload lagging for $ Training budget Context specific: A lagging indicator in one context can become a leading indicator in another context. % Employee satisfaction is a lagging KPI in terms of HR policies and processes % Salary variance from industry average), however it is a leading KPI for % Applications processed on time. # Arrests is a lagging KPI indicating police activity (# Policeman workload) and a leading KPI to predict court activity (# Court cases). $ Profit is a lagging KPI for % Processes optimised and a leading KPI for $ Training budget. $ Profit leading for % Processes optimised lagging for KPI Selection

VALUE FLOW / PROGRAM LOGIC ANALYSIS
Desired outcomes Inputs Activities Outputs Outcomes Effectiveness Cost effectiveness Efficiency Efficiency = extent to which time, effort or cost are well used for the intended purpose. Used to relay the capability of a specific application of effort to produce a specific outcome effectively with a minimum amount of waste, expense and effort. Effectiveness = the extent to which a desired effect is achieved. Used to relay the capability of producing a desired outcome, the success in achieving a given result. KPI Selection

Improve timeliness of service provision
VALUE FLOW ANALYSIS Effectiveness Cost effectiveness Improve timeliness of service provision # Medical staff # Consultation rooms # Time to make an appointment # Time to see a doctor # Patients per doctor % Patients leaving without being seen % Patients satisfied with the service provision % Services delivered as per the timeliness standard Objectives Inputs Processes Outputs Outcomes KPI Selection

INPUT METRICS Funding: $ Budget, # Grants, $ Bank loans
Measure the quantity/quality of input resources to organizational activities Generally include: budget, human resources, materials, systems Examples: Funding: $ Budget, # Grants, $ Bank loans Human resources: # Employees, # Doctors Equipment, materials, supplies: # Production lines available, # Plants available INPUTS PROCESSES OUTPUTS OUTCOMES KPI Selection

PROCESS METRICS Measure the quantity/quality of the activities required to provide certain expected outputs Generally include: transformation in terms of time, utilization, availability Examples: % On time delivery of vaccination programs (health project) # Time to reach a farmer (extension project) % Construction machineries utilization (highway project) # Time to install an electricity facility (rural electrification project) INPUTS PROCESSES OUTPUTS OUTCOMES KPI Selection

OUTPUT METRICS # Clients vaccinated (health project)
Measure the quantity/quality of the goods or services created or provided through the use of inputs; They generally include: results Examples: # Clients vaccinated (health project) # Farmers visited (extension project) # Miles of road build (highway project) # Electricity generation, transmission facilities installed (rural electrification project) INPUTS PROCESSES OUTPUTS OUTCOMES KPI Selection

OUTCOME / IMPACT METRICS
Measure the quantity/quality of the results achieved through the provision of goods and services They generally include: added value, impact Examples: % Incidence of disease (health project) # Farming practices rating (extension project) % Vehicle use of traffic counts (highway project) # Rural supply (or consumption) of electricity (rural electrification project) INPUTS PROCESSES OUTPUTS OUTCOMES KPI Selection

VALUE FLOW ANALYSIS PROJECT INPUT PROCESS OUTPUT OUTCOMES
Health project $ Budget # Doctors % On time delivery of vaccination programs # Clients vaccinated % Incidence of disease % Mortality rate Extension project # Consultants # Time to reach a farmer # Farmers visited # Farming practices rating Highway project # Contractors # Machines available % Construction machineries utilization # Miles of road build # Vehicle use of new road Rural electrification project # Power plants # Electricians # Time to install an electricity facility # Electricity generation and transmission facilities installed # Rural supply (or consumption) of electricity

KPI SELECTION PREPARATION
Industry standards Competitors Benchmarking External lists Workshop Board KPI sources Compliance Management Historical KPI Selection

KPI SELECTION SOURCES - Strategic development plan (3-5 years);
- Annual business / strategic plan; - Annual reports; - Internal operational reports. Competitor review reports; Printed catalogues; Online catalogues ( Annual reports of other organizations (KPIs in Practice). Front-line employees input; Managers input; Board input. Suppliers input; Customers input; Expert advice; Questions in discussion forums. Secondary Primary Internal External KPI Selection

KPI SELECTION WORKSHOP AGENDA
Duration (240 minutes) Topic Context (60 minutes) 5 Agenda and meeting scope review Needs review 10 Terminology and KPI format clarification 20 Selection process and tool review Sample Value Flow Analysis (VFA) as a model Selection activities (140 minutes) 60 Interactive VFA team exercises Consolidation of KPI wall List revision based on filtering criteria Review and closing (40 minutes) Review of draft Answering questions Clarifying next steps KPI Selection

KPI SELECTION WORKSHOP
Clients Suppliers Employees Board Management Facilitators KPI Selection

KPI SELECTION TECHNIQUES
Needs identification KPI expo KPI clustering Relevant performance questions Value flow analysis KPI balancing KPI selection criteria 1 2 3 4 5 6 7 KPI Selection

Organizational needs analysis report
NEEDS IDENTIFICATION Implies consulting relevant stakeholders to complete a list of the company’s needs, both at organizational and departmental level. 1 Organizational needs analysis report Advisory group Strategic direction Culture and context Participant assessments Core competencies 2 3 4 5 6 7 KPI Selection

KPI EXPO Essential KPI examples 1 2 3 4 5 6 7 KPI Selection

KPI EXPO

EXERCISE: KPI CLUSTERING
Scenario: You are part of the management team of a medical centre activating in Saudi Arabia. The board asks you to present 5 KPIs you will be using to track the performance of medical centre. Task: Write down 5 KPIs you would recommend. Use one single post-it note for each KPI (5 post-it notes per team). 1 2 3 4 5 6 7 KPI Selection

RELEVANT PERFORMANCE QUESTIONS
FAQs During the workshop Questions to prepare in case they are asked What are the most relevant sources for KPI selection? How many KPIs should we select? What will we do with KPI results? What is the order of importance in which the KPI selection sources should be analyzed? What is the procedure for validating the KPIs selected? What efforts are required for data gathering for each KPI? Who should participate in the KPI selection process? What process are we going through and how long will it take? What will we learn from the data? What is the ideal format for KPI selection process? What figures will reflect the achievement of company objectives? How do we link KPI results with bonuses? What are the most relevant criteria for the KPI selection? What sort of data we need to keep track of to ensure informed decision making? What are we trying to achieve by setting up KPIs? What matters? What is in it for me? So what? 1 2 3 4 5 Key questions that are asked and answered, and as a result proper comprehension of performance management related principles and tools is ensured. 6 7

EXERCISE: VALUE FLOW ANALYSIS
Given the strategic objective “Operate in an environment that fosters creativity and innovation”, place each of the metrics below in the appropriate value flow stage. List in each column the number corresponding to the correct tool. 1 2 1 # Innovation champions in each area 4 # Staff in the innovation program team 7 $ Value generated by innovation ideas 10 % Innovation ideas funded 2 # Innovation focus groups 5 # Time to evaluate an idea 8 % Ideas evaluated within the SLA target of 2 weeks 11 % Innovation ideas implemented 3 # Patents 6 $ Budget 9 % Innovation ideas evaluated 12 % Innovation ideas that generated value 3 4 5 6 Input Process Output Outcome 7 KPI Selection

Value flow Analysis Objctive: Operate in an environment that fosters creativity and innovation 1 # Innovation champions in each area 4 # Staff in the innovation program team 7 $ Value generated by innovation ideas 10 % Innovation ideas funded 2 # Innovation focus groups 5 # Time to evaluate an idea 8 % Ideas evaluated within the SLA target of 2 weeks 11 % Innovation ideas implemented 3 # Patents 6 $ Budget 9 % Innovation ideas evaluated 12 % Innovation ideas that generated value Input Process Output Outcome

Value flow analysis

EXERCISE: VALUE FLOW ANALYSIS
Scenario: Select one objective of your choice. Task: Write at least 2 input, 2 process, 2 output and 2 outcome metrics Select from these metrics 2-3 KPIs to measure the achievement of the objective Propose 1-2 initiatives to address the implementation of the objectives 1 2 3 4 5 6 7 KPI Selection

EXERCISE: KPI BALANCING
Write the correct KPI number under each objective, in order to assure a balanced approach. 1 Hospital areas Objectives No. KPIs Ambulance services A. Provide on time ambulatory services to patients 1 # Surgeries conducted 2 # Flu vaccine uptake 3 % Laboratory test accuracy Surgery services B. Provide high quality surgery services 4 # Ambulances available 5 # Discharges 6 # Time to conduct a laboratory test Admission services C. Reduce unplanned readmission rates 7 % Unplanned readmission rate 8 % Flu vaccinations delivered on time 9 % Ambulance reaching patients within SLA Medical laboratory D. Provide timely and accurate diagnosis 10 % Post surgery infections Preventive healthcare E. Increase the citizens immunity 2 3 4 5 6 7 KPI Selection

KPI Balancing Hospital areas Objectives Ambulance services
A. Provide on time ambulatory services to patients 4 # Ambulances available 9 % Ambulance reaching patients within SLA Surgery services B. Provide high quality surgery services 1 # Surgeries conducted 10 % Post surgery infections Admission services C. Reduce unplanned readmission rates 5 # Discharges 7 % Unplanned readmission rate Medical laboratory D. Provide timely and accurate diagnosis 3 % Laboratory test accuracy 6 # Time to conduct a laboratory test Preventive healthcare E. Increase the citizens immunity 2 # Flu vaccine uptake 8 % Flu vaccinations delivered on time

BALANCING KPIS 1 2 3 4 5 6 7 Quantity Quality Industry
# Maintenance requests closed % Maintenance requests resolved within SLA Manufacturing # Ideas expressed % Ideas implemented Education Subjectivity Objectivity # Customer satisfaction # Customer complaints received Financial institutions % Net promoter score # Clients from referrals Professional Services Efficiency Effectiveness $ New customers acquisition cost # New customers Retail # Call duration % First call resolution rate Call Centre 1 2 3 4 5 6 7 KPI Selection

HEINRICH’S PYRAMID Sales funnel Innovation funnel 1 2 3 4 5 6 7
KPI Selection

KPI SELECTION CRITERIA
Attainable Reliable Balanced Relevant Complete Specific Clearly defined Tested Direct Time bound Incentivized Useful for management Objective Practical 1 2 3 4 5 6 7

SESSION REVIEW KPI typology:
trend (ascending / descending / within limits); measurement interpretation (quality / quantity); indicator focus (leading / lagging); impact stage (input / process / output / outcome); KPI selection sources: internal and external, primary and secondary; KPI selection techniques: needs identification, KPI expo, KPI clustering, relevant performance questions, Value Flow Analysis, KPI balancing, KPI selection criteria. KPI Selection

KPI Documentation 4 1 Key Learning Points
DAY 1 DAY 2 DAY 3 KPI documentation form functions KPI documentation form design KPI documentation process Weights and indexes Target setting process Targets in practice Challenges in working with targets Data Gathering and Reporting KPI Management Enablers The World of KPIs The World of KPIs 4 1 The Pillars of KPI Architecture Generating Value from Using KPIs Data Visualization Key Learning Points Understand the KPI documentation form functions Document a KPI Follow the target setting process Identify KPI target sources Understand the negative impact of target setting KPI Documentation KPI Selection Review

KPI DOCUMENTATION FORM FUNCTIONS
Ensures understanding of KPIs by providing clarity and meaning to KPI names Facilitates communication through standardisation Activation prerequisite Automation enabler Knowledge management Educates stakeholders (KPI owners, data custodians) Contributes to buy-in by involving the stakeholders KPI Documentation

KPI DOCUMENTATION What? Identify metadata fields
Fill in the required fields for each KPI Why? Simplify communication Alignment “Setting the rules” How? Standardized KPI documentation form Benefits of the organizational KPI Library Top performers are 53% more likely than the industry average to maintain a library of KPI examples and 39% promote the use of performance management to their employees. KPI Documentation

KPI DOCUMENTATION FORM DESIGN
Form sections Fields Identification Name, number, functional area Definition Link to strategic objective Calculation Sub-measures, formula, trend Orientation Meaning, impact, implementation level, indicator type Purpose Data profile Automation, frequency, time-lag, integrity, limitations Targets Intervals, benchmarking fit Administration Owner, custodian, source KPI Documentation

KPI DOCUMENTATION FORM (1)

Health Service Executive KPI Documentation

Health Service Executive

Queensland Health Health Information and Quality Authority KPI Documentation

KPI DOCUMENTATION FORM
Organizations use on average 12 different field to document a KPI The most popular fields are: KPI Documentation

KPI DOCUMENTATION PROCESS
Review of internal literature External resources review Consultations with staff collecting or using the data Presentation to owner for approval Review and approval by KPI architect / SME / Strategy Manager Approval by management team Addition to organizational KPI library KPI Documentation

DEVELOPING THE ORGANIZATIONAL KPI LIBRARY
Design the initial KPI documentation form – the KPI implementation team or the Strategy / Performance Office Update KPI documentation forms – data custodians Rreview, update and sign-off KPI documentation forms – KPI owners Approve – management team Centralize all KPI documentation forms in a KPI library – the KPI implementation team or the Strategy / Performance Office KPI Documentation

WEIGHTS AND INDEXES Weights Indexes
Refer to emphasizing the input of certain indicators, by attributing them weights; The weights of each indicators are multiplied by the actual achieved performance, and then totaled, in order to obtain the final performance rating. Refer to a set of items that aggregate multiple, but distinctly related aspects under a single indicator; They are an accumulation of scores from a variety of individual items. KPI Documentation

WEIGHTS – EMPLOYEE ASSESSMENT
Used for individual performance evaluations; Implies evaluating employees based on assigning weighting factors to different work assignments and responsibilities; Works best when the weighted factors are correlated with established performance goals. KPI Documentation

WEIGHTS – EMPLOYEE ASSESSMENT
KPI Documentation

WEIGHTS – SUPPLIER ASSESSMENT
Used for ranking suppliers, by rating their performance based on standardized weighting methods; It implies assigning weights to supplier attributes, depending on their relevance to the overall performance; It combines quantitative and qualitative performance metrics into a single system. KPI Documentation

WEIGHTS – SUPPLIER ASSESSMENT
KPI Documentation

INDEXES - #Customer satisfaction index
The American customer satisfaction index It is calculated based on survey data from more than 70,000 people over the course of a year. These people are customers of more than 200 firms that have significant enough market share to influence overall national consumer satisfaction and demand for goods and services. - is calculated based on survey data from more than 70,000 people over the course of a year. These people are customers of more than 200 firms that have significant enough market share to influence overall national consumer satisfaction and demand for goods and services. KPI Documentation

INDEXES - #Employee engagement index
The Global Employee Engagement Index It is a global survey conducted by Effectory International that surveys the work-related opinions of employees in 47 different countries. Respondents are asked more than 100 questions, in order to gain a detailed insight into global work-opinions. 6.7 6.9 5.8 6.1 6.0 - is a global survey conducted by Effectory International that surveys the work-related opinions of employees in 47 different countries. Respondents are asked more than 100 questions, in order to gain a detailed insight into global work-opinions. KPI Documentation

INDEXES - #Leadership index
The National Leadership Index It is a survey of more than 1,000 Americans, towards their leaders, looking to thirteen of the country’s major sectors. – is a survey of more than 1,000 Americans, towards their leaders, looking to thirteen of the country’s major sectors. KPI Documentation

WORKING WITH TARGETS Show the desired result level for KPIs Represent the starting point in the measuring and analysis process (comparing to actual / desired level) Impact behavior “It was evident that our business goals needed to shift. We adapted our business plan to increase the emphasis on new business generation and customer retention. Setting targets for key performance indicators (KPIs) was the way forward.“ Wendy Trevett, Operations Director, Lucy Britow Appointments, UK KPI Documentation

TARGET SETTING Contextual analysis Historical records
Internal Benchmarking External Benchmarking Comparative data External analysis (market trends) Approaches Start target Drilled-down target KPI Documentation

Consultations in target setting should start with the top management.
As KPIs are active and data is gathered, targets may be reviewed and recalibrated Targets need to be adjusted periodically as the internal and external environment of the company is in a permanent change. KPI Documentation

ESTABLISHING THRESHOLDS
1. Determine the trend of each KPI – the trend is favorable when: increases, within range, decreases. 2. Determine the thresholds and use colors to represent them – below target, within target, above target. 3. Define each threshold by setting specific levels of results: <75; 75-95; >95% 4. When defining thresholds and targets consider the frequency of reporting for each KPI. KPI Documentation

% Customer satisfaction % First call resolution rate
Chunghwa Telecom The method used was based in a scale from 1 to 5 (where 5 = the maximum level of satisfaction). The scale from 1 to 5 was replaced by a scale from 1 to 10 (where 10 = the maximum level of satisfaction). KPI Documentation

Turnover Rates For Fortune Magazine's 100 Best Companies
% Employee turnover Turnover Rates For Fortune Magazine's 100 Best Companies KPI Documentation

CHALLENGES IN WORKING WITH TARGETS
Which negative behaviors are associated with performance based pay? Allocate the correct number in front of each statement. Match Description No. Behavior Establishing lower targets than the realistic level estimated as possible. 1 Gaming Looking after the achievement of own targets, without consideration of the implications for other areas in the organization. 2 Sandbagging Disregarding environmental and safety considerations in the process of meeting targets. 3 Tunnel behavior Influencing results through unapproved means to ensure target achievement. 4 Unethical behavior KPI Documentation

NEGATIVE BEHAVIORS CATALOGUE
No. Organization Industry Year Behavior 1 Atlanta Public Schools Education Gaming 2 Bank of America Banking 2011 Unethical behavior 3 Ford Motor Company Automotive 1967 4 Sears, Roebuck and Co. Retail Early 1990s 5 Stafford Hospital Healthcare Tunnel behavior 6 Victorian Hospitals 2009 7 2010 KPI Documentation

Steps for Development Of KPI

Steps for Development of KPIs
Step1: Find the Strategic Objectives of the Organization Increase income by 20% for Next year Increase contacts by 5% before year end Step 2: Find the Department’s Strategic Objectives Reduce staff turnover by 20% over the coming six months. Decrease Medication Error by 30% BYE

Steps for Development of KPIs
Step 3: Set initiatives to reach every goal. Step 4: Create Value flow Analysis Step 5: Develop your KPI (See next Slide) Set Equations, Documentation, Reporting, Analysis and Decision making Step 6: Follow the Life cycle of the KPI

KPI SELECTION PREPARATION
Industry standards Competitors Benchmarking External lists Board Management Compliance Historical Workshop KPI sources KPI Selection

Apply your KPI Test your KPI, be sure that they measure what you need to measure. Modify as needed to assure full action Set Relax and Monitor your operations

KPI execution Once we have viewed the objectives and desiccate it we need to look to every objective and create the Metrics for Input, Process, Output and Outcome. Example: Improve continuously skills through learning experiences by 30% over Y2016 KPI # of skills improved through learning Programs Skills that improved/Skills programs*100

Practical Example Objectives:
List of objectives for Value Flow Analysis No. Objective 1 Continuously improve skills through learning experiences 2 Operate a safe working environment 3 Deliver with high quality of care standards 4 Optimize delivery time 5 Expand medical service reach 6 Maintain high level of patient satisfaction

Continuously improve skills through learning experiences
Group 1 Input Output # Staff # Staff trained # Training material # Courses delivered $ Budget % Passing rate # Facilities % Attendance rate # Trainees % Dropout rate Process Outcome # Courses % Trainee satisfaction # Trainee per course % Certified employees # Training hours per employee % Employees with desired level of skills Initiatives Training program eLearning platform Employees skills gap analysis Employee development program

Operate a safe working environment
Group 2 Input Output # Staff % Incident rate $ Budget # Hazard material dispose # Medical equipment % Equipment malfunction # Facilities # Near misses # Policies & procedures Process Outcome # Awarness safety programs # Injuries related to work environment % Safety officers availability % Infection rate % Maintenance scheduling compliance # Safety certifications % Hazardous material stored in safety cabinets % Staff injury due to exposure to hazardous material # Frequency of equipment maintenance % Lost time injury frequency rate (LTIFR) # Frequency of safety audits Initiatives Safety Program Equipment Maintenance Program New equipment acquisitions

Maintain high level of patient satisfaction
Group 3 Input Output # Staff # Patients complaints $ Budget # Patients on waiting list % Patient satisfaction Process Outcome # Patient waiting time # New patients from referrals % Appointments requests schedules # NO show patients % Net Promoter Score Initiatives Customer Satisfaction survey Current Processes review Clinic expansion CRM system New staff hire

Deliver with high quality of care standards
Group 4 Input Output $ Budget % Dispensing errors # Man power required % Repeated tests for the same patient in the same visit # Medical equipment Process Outcome # Time to review standad and procedures % Medical errors #Admission waiting time # Accreditations # Certifications # Awards Initiatives Reward programme Procedures review Auditing ISO standards implementation Acreeditation

KPI Documentation fields
KPI name Status Definition Graphical Visualization Target Frequency of reporting Purpose Calculation formula Data source Data collection system Kpi Owner Kpi data custodian Initiatives linked to Objectives linked to

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The Art and Technique of Developing Key Performance Indicators

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The Art and Technique of Developing Key Performance Indicators

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