StrategyDriven Podcast Special Edition 44a – An Interview with David Parmenter, author of Key Performance Indicators, part 1 of 2

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StrategyDriven Podcasts focus on the tools and techniques executives and managers can use to improve their organization’s alignment and accountability to ultimately achieve superior results. These podcasts elaborate on the best practice and warning flag articles on the StrategyDriven website.

Special Edition 44a – An Interview with David Parmenter, author of Key Performance Indicators, part 1 of 2 explores how to create a winning key performance indicator system that transforms these reports into decision-making tools supporting achievement of superior bottom line results. During our discussion, David Parmenter, author of Key Performance Indicators: Developing, Implementing, and Using Winning KPIs shares with us his insights and illustrative examples regarding:

  • differences and relationships between key performance indicators, key results indicators, performance indicators, and results indicators
  • characteristics of key performance indicators that makes them both unique and powerful measures of performance
  • dangers associated with treating all performance measures as key performance indicators

Additional Information

In addition to the outstanding insights David shares in Key Performance Indicators and this special edition podcast are the resources accessible from his website, www.DavidParmenter.com.   David’s book, Key Performance Indicators, can be purchased by clicking here.

About the Author

David Parmenter is author of Key Performance Indicators: Developing, Implementing, and Using Winning KPIs. David is an internationally renowned speaker, author, and advisor known for his work in the development of performance measurement systems that transforms these reports into a decision-making tool. He is a Fellow of the Institute of Chartered Accountants in England and has delivered workshops to thousands of executives and managers around the world. To read David’s complete biography, click here.

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The New Thinking on KPIs, part 4 of 4

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Removing the lead / lag confusion

Many management books talk about “lead and lag indicators” which I believe merely clouds the KPI debate. Using this new way of looking at KPIs we dispense with the terms lag (outcome) and lead (performance driver) indicators. I have presented to nearly two thousand people on KPIs and I always ask “is the late planes in the air KPI, a lead or lag indicator?” The vote count is always evenly split. Surely, this is enough proof that lead and lag labels are not a useful way of defining measures.

Key result indicators replace outcome measures, which typically look at activity over months or quarters. PIs, and KPIs are now characterised as either past, current or future measures. The new concept called “current measures” are those monitored 24/7 or daily. You will find the real KPIs in your organization are either “current” or “future” measures.

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About the Author

David Parmenter, author of Key Performance Indicators: Developing, Implementing, and Using Winning KPIs and Pareto’s 80/20 Rule for Corporate Accountants, is an international presenter who is known for his thought provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in developing winning KPIs, replacing the annual planning process with quarterly rolling planning, accelerating month-end processes, and converting reporting to a decision based tool.

David’s work on KPIs has received international recognition with clients in Auckland, Wellington, Sydney, Melbourne, Brisbane, Adelaide, Canberra, Perth, Kuala Lumpur, Singapore, Tehran, Prague, Dublin, London, Birmingham, Manchester and Edinburgh. David is a fellow of the Institute of Chartered Accountants in England & Wales and has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and Price Waterhouse Coopers.

David’s recent thinking is accessible from www.davidparmenter.com. He can be contacted at [email protected] or telephone +64 4 499 0007.

This articles is an extract from his “Implementing winning KPIs” whitepaper which can be downloaded from http://davidparmenter.com/how-to-guides)

The New Thinking on KPIs, part 3 of 4

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The four types of performance measures

I have come to the conclusion that there are four types of performance measures, as shown in Figure 3. This conclusion has come from: the research I have conducted; workshop feedback across diverse industries; and as a by-product of writing my book “Key Performance Indicators – developing, implementing and using winning KPIs”.


Figure 3: A scorecard with six perspectives

  • key result indicators (KRIs) – give an overview on past performance and are ideal for the Board as they communicate how management have done in a critical success factor or balanced scorecard perspective
  • performance indicators (PIs) – tell staff and management what to do
  • result indicators (RIs) – tell staff what they have done
  • key performance indicators (KPIs) – tell staff and management what to do to increase performance dramatically.

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About the Author

David Parmenter, author of Key Performance Indicators: Developing, Implementing, and Using Winning KPIs and Pareto’s 80/20 Rule for Corporate Accountants, is an international presenter who is known for his thought provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in developing winning KPIs, replacing the annual planning process with quarterly rolling planning, accelerating month-end processes, and converting reporting to a decision based tool.

David’s work on KPIs has received international recognition with clients in Auckland, Wellington, Sydney, Melbourne, Brisbane, Adelaide, Canberra, Perth, Kuala Lumpur, Singapore, Tehran, Prague, Dublin, London, Birmingham, Manchester and Edinburgh. David is a fellow of the Institute of Chartered Accountants in England & Wales and has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and Price Waterhouse Coopers.

David’s recent thinking is accessible from www.davidparmenter.com. He can be contacted at [email protected] or telephone +64 4 499 0007.

This articles is an extract from his “Implementing winning KPIs” whitepaper which can be downloaded from http://davidparmenter.com/how-to-guides)

The New Thinking on KPIs, part 2 of 4

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The characteristics of KPIs

KPIs represent a set of measures focusing on those aspects of organizational performance that are the most critical for the current and future success of an organization. There are only a few KPIs in an organization (no more than 10) and they have certain characteristics.

KPI characteristics include:

  • Non financial measures (not expressed in $s, Pds etc)
  • Measured frequently e.g. daily or 24/7 (KPIs are not measured monthly)
  • Acted upon by the CEO and the senior management team on a daily or 24/7 basis
  • All staff understand the measure and what corrective action is required
  • Responsibility can be tied down to a team
  • The KPI has a significant impact on the organization e.g. it impacts on most of the critical success factors and balanced scorecard perspectives
  • Positive movement affects all other performance measures in a positive way

When you put a Pound or Dollar sign to a measure you have not dug deep enough. Sales made yesterday will be a result of sales calls made previously to existing and prospective customers, advertising, amount of contact with the key customers, product reliability etc. I label any indicator expressed in monetary terms as result indicator, see below for more explanation.

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About the Author

David Parmenter, author of Key Performance Indicators: Developing, Implementing, and Using Winning KPIs and Pareto’s 80/20 Rule for Corporate Accountants, is an international presenter who is known for his thought provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in developing winning KPIs, replacing the annual planning process with quarterly rolling planning, accelerating month-end processes, and converting reporting to a decision based tool.

David’s work on KPIs has received international recognition with clients in Auckland, Wellington, Sydney, Melbourne, Brisbane, Adelaide, Canberra, Perth, Kuala Lumpur, Singapore, Tehran, Prague, Dublin, London, Birmingham, Manchester and Edinburgh. David is a fellow of the Institute of Chartered Accountants in England & Wales and has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and Price Waterhouse Coopers.

David’s recent thinking is accessible from www.davidparmenter.com. He can be contacted at [email protected] or telephone +64 4 499 0007.

This articles is an extract from his “Implementing winning KPIs” whitepaper which can be downloaded from http://davidparmenter.com/how-to-guides)

The New Thinking on KPIs, part 1 of 4

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“Show me a company who thinks they have 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”

David Parmenter
Internationally renown presenter and expert on Key Performance Indicators

From my research, very few organizations really monitor their true KPIs. The reason is very few organizations, business leaders, writers, corporate accountants, and consultants have explored what a KPI actually is. This brief paper hopefully will help you unearth what a KPI is and point where to look for them in your organization.

Let me explain what a KPI is through two KPI stories.

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About the Author

David Parmenter, author of Key Performance Indicators: Developing, Implementing, and Using Winning KPIs and Pareto’s 80/20 Rule for Corporate Accountants, is an international presenter who is known for his thought provoking and lively sessions, which have led to substantial change in many organizations. He is a leading expert in developing winning KPIs, replacing the annual planning process with quarterly rolling planning, accelerating month-end processes, and converting reporting to a decision based tool.

David’s work on KPIs has received international recognition with clients in Auckland, Wellington, Sydney, Melbourne, Brisbane, Adelaide, Canberra, Perth, Kuala Lumpur, Singapore, Tehran, Prague, Dublin, London, Birmingham, Manchester and Edinburgh. David is a fellow of the Institute of Chartered Accountants in England & Wales and has worked for Ernst & Young, BP Oil Ltd, Arthur Andersen, and Price Waterhouse Coopers.

David’s recent thinking is accessible from www.davidparmenter.com. He can be contacted at [email protected] or telephone +64 4 499 0007.

This articles is an extract from his “Implementing winning KPIs” whitepaper which can be downloaded from http://davidparmenter.com/how-to-guides)