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The new thinking on key performance indicators

Very few organisations really monitor their true key performance indicators (KPIs), because very few have explored what a KPI actually is,says performance consultant David Parmenter.

Show me a company which thinks it has KPIs which are measured monthly and quarterly, and I will show you measures that do not create change, alignment and growth and have never been KPIs. But first let me explain what a KPI is through two stories...

My favourite KPI story is about the late Lord King, who set about turning British Airways (BA) around in the 1980s by reportedly concentrating on one KPI. Lord King appointed some consultants to investigate and identify the key measures he should concentrate on to effect a turnaround in the ailing airline. They came back and told Lord King that he needed to focus on one critical success factor (CSF): the timely arrival and departure of aeroplanes.