Focusing on KPI’s: How to improve a standard by focusing on KPI’s

Focusing on KPI’s: How to improve a standard by focusing on KPI’s

Published By : Ajay Katre March 14, 2014

Ok, anybody that knows me knows I’m a gearhead.   I especially love motorcycles.  I’ve ridden well over 150,000 miles, and I consider that a good start.    I have ridden many different types of motorcycles but my favorite bikes are those in the adventure touring class.    In my opinion, there is one bike in this class that has been the proven standard in this class for over 30 years.    Owners of this bike know that it’s built and proven to be reliable performer for a trip across town or a journey around the world.    As you would expect when a model becomes such a standard you typically only see minor improvements in it from year to year.   This year was not the case.

From a distance looking at last years’ model and this years’ model the bike looks basically the same.   It’s not until you get close you start seeing changes to just about every component and major system of the bike from braking, engine, transmission, drivetrain, cooling, electrical.    Well, naturally, I had to give it a test drive so my wife and I got on it and gave it a spin.   The bike had the same riding experience…but better…way better.   I’m was amazed how such a standard just become so dramatically improved.

Later, I was thinking about the bike and how the manufacturer pulled off such an amazing feat.   I realized what they had done was focus on key measurements which improved the overall performance of the bike.   The measurements of the bikes systems were all improved:  Braking distance (feet), engine power (horsepower & torque), transmission (weight), cooling (temperature), overall weight (weight), ground clearance (inches), adjustable seat height (inches) and cost (dollars).  Interestingly, the bike looked and felt the same but major components like the engine and transmission were completely redesigned.   The company was focusing on improving the measurements and to accomplish this they had to completely change how the major components worked together.

As a consumer, I am left with an improved perspective of the bike and the manufacturer.   I see that they changed the bike’s operating processes but not the image or function.    It was re-enforced to me  that if a company understands and focuses on key measurements, major process improvements can occur with improved results, while improving the customer experience and maintaining their image to the consumer.

I view businesses as machines, such as a motorcycle.   Business are machines, or a collection of business processes, built with people, processes, systems and strategies.   My passion is to improve the management of corporations’ overall business processes (READ: I SEE PROCESS IN EVERYTHING) .   As with the bike, a business can improve its performance by identifying, understanding and focusing on key measurements.  In business these measurement are known as Key Performance Indicators (KPIs).   Examples of standard business KPIs include:  Cost (dollars), Execution time (days, hours, minutes), Wait time (days, hours, minutes), Resource Cost (dollars).

Business that implement Business Process Management (BPM) Programs are able to operate the “machine” with a real-time view of their processes and related KPIs.     Companies can then choose to make major or minor changes to their operations where they can see improvements in performance and increased customer satisfaction.