With the use of key performance indicator projects, it’s easy to be unsuccessful. David Parmenter discusses how businesses can avoid failure.From my observations, the failure rate for key performance indicators (KPIs) and balance scorecard projects is off the scales. There are a number of contributing factors that have led to this.
Management, who have yet to receive formal education on performance management, are running organisations in both the private and public sectors. Unlike accounting and information systems, where rigorous processes have been formulated, discussed and taught, performance measurement has been left an orphan of business theory and practice. To make matters worse, organisations are being led by poorly trained chief executive officers (CEOs).
The reasons for this lack of CEO training stems back to the informative years. In the 1990s, there was wholesale divestment in human resources (HR) on a grand scale. In the 1980s, it was common to see large HR departments with their own training, recruiting and nurturing activities. Nothing regarding people could take place without the involvement of HR. Their sphere of influence was everywhere.
This is an extract from the Business & Management Magazine, Issue 261, February 2018.