This is a concept paper on the Key Performance Indices and the associated practices. The paper elaborates on different cases to stress the importance of identifying right KPIs from an organizational perspective.

1. Realizing Growth
A macro view of process management

2. Realizing Growth
These days growth is the most sought-after word in corporate vocabulary, with CEO’s, senior
executives and new-age entrepreneurs all trying to understand and decipher its true meaning.
The companies, which are able to grow in this tumultuous period of uncertainty, are either the
ones which have carefully planned and developed strategies to encounter this period or they
were simply in the right market segment and at the very right moment. However, the latter
belongs to a very small subset of companies.
Most companies, according to our research, are either not ready to ‘manage’ or ‘handle’ scaling
up when growth starts to kick-in or simply don’t have the right competencies to fully capitalize
on growth. Companies’ usually face what are better known as ‘growth problems’ i.e. internal
operations are not streamlined to manage the expanding business leading to organizational
chaos and missed opportunities.
Growth problems can comprise a myriad range of issues: high attrition rates, lack of effective
policy and procedures to manage human assets, absence of integrated organizational structure
and reward schemes, mismatched job descriptions and problems with accountability. It can be
extremely challenging to find the right people to fully capitalize on existing and new
opportunities for growth.
Understanding
and
Managing growth is a big
challenge and especially
when
there
is
internal
misalignment
between
stakeholders,
processes
and
responsibilities.
Developing processes and
systems
is
equally
as
critical as effective client
management.
Figure 1: Life Cycle of a company
©Niteo Partners Consulting 2013
www.niteo-partners.com

3. One of the fundamental aspects in developing and managing systems and processes is to define
Key Performance Indicators (KPIs). KPIs are used to measure the success and review the
performance of different functions. Quantification of performance using KPIs is a modern
corporate philosophy - a school of thought that one must subscribe to and make it an intrinsic
part of their company’s culture – which measures not only the end result of a process, but also
how that result was achieved. KPIs have been extensively used in sales and marketing. However,
the usage of KPIs has become extremely critical in operations.
Most companies define KPIs, but somehow fail to set-up processes to regularly measure and
monitor them. Moreover, companies usually fail to define right kind of KPIs to measure
performance and improve productivity and efficiency. Needless to say, this remains one of the
most crucial challenges towards streamlining operations so as to deliver on growth objectives.
The best-in-class businesses review their established KPIs periodically for effectiveness and
develop corrective actions to improve the overall performance of operations.
Another important aspect where a lot of companies fail to realize is the importance of common
KPIs for different functions. This is necessary to ensure that the focus is on the bigger objective
and individual units don’t work in silos. The most common example where two units often work
in silos is operations and maintenance. However, if you were to bind these functions by common
KPIs such as Overall Equipment Effectiveness (OEE), they have to work in tandem to achieve
the targets. OEE is frequently used in manufacturing firms as one such common KPI across the
whole organization and serves as a common goal for all units to accomplish.
Process Mapping and Bottleneck Analysis
Once we have established KPIs, the next critical step is to map processes within the value chain.
This enables companies to identify bottlenecks in the processes and brings- to-surface areas to
improve operational efficiency. Once these bottlenecks are identified, companies should
evaluate their overall business case in implementing any significant improvement programs and
must focus their efforts on maximizing overall Return on investment (ROI).
©Niteo Partners Consulting 2013
www.niteo-partners.com

4. Short-term vs. Long Term Goals
While it is necessary to work on the long term objectives, it is also equally imperative to solve
any immediate problems that are affecting the business in the short term. It helps to keep the
motivation of employees high as they keep seeing the results of some of their actions. One of the
ways to approach this is to identify top issues in each function and then addressing the ones
which are most painful and have maximum ROI in the short term. A thorough root-cause
analysis must be carried out to go beyond the symptoms and get to the real cause of the
problem.
We do not advocate focusing solely on the short term issues as it can derail the growth process.
However, completely ignoring these issues can result in severe bottlenecks across the value
chain and also affect employee motivation as we have seen in some of our projects. A careful
balance needs to be achieved in spending the efforts on short term vs. long term solutions.
Ultimately, the actions taken in short or long term will have systemic effect on people, processes
and culture.
©Niteo Partners Consulting 2013
www.niteo-partners.com