Operational KPI governance

We fix one definition, one owner and one target for each operating measure the board holds management to. With management and the board we choose the dozen or so that matter, write down how each is calculated and keep the log that records every change.

• A measure register: name, definition, formula, data source, owner, target and review date.
• A one-page board scorecard of about a dozen measures, in the same order every month.
• A target-setting paper for each measure, recording the baseline and the reasoning.
• A change log for definitions and targets, recording who asked, why and who approved.
• A quarterly governance note listing measures added, retired or restated, for the board's record.

• Every measure on the scorecard carries a written definition and a named owner.
• Each measure comes from one source, and the board sees the share that do.
• Changes to definitions and targets are logged with who asked, why and who approved.
• The scorecard reaches the board on a fixed day.
• The board reviews targets through the year, and the share reviewed is on the quarterly note.

Every function has its own measures, and the same name means different things. On-time delivery is counted from order or from dispatch, a failed order is a refund in one report and a retry in another, and targets are quietly reset after a poor quarter, so trends cannot be trusted.

• Two reports show different on-time rates for the same period.
• Management presents thirty measures and the board remembers none.
• Targets were adjusted after the quarter ended.
• Nobody can say who is answerable for a given measure.
• Bonuses are linked to figures the board cannot verify.

Boards and chief executives of groups whose management reports dozens of measures, defined differently by each team, and who want a short, trusted set that they can hold managers to.

Qasim Abbas has brought more than 20 companies across several countries onto one set of numbers, and holds operating measures to the same test: one definition across entities, or the totals fail. We govern your KPI set to that test.

We use the group's existing systems and reports as sources, including the ledger and the commerce, dispatch and warehouse tools you run. See how fees work.

How many measures should a board follow?

About a dozen at group level, with more held by management. The register records which belong where and who answers for each.

Who owns a measure that crosses two functions?

One executive, named in the register. Shared accountability is recorded as an input to that executive, and not as shared ownership.

What if our data is poor?

The scorecard states the quality of each source plainly. Improving a weak source becomes an action with an owner and a date.

Send the reports management circulates today to a private briefing. We return a proposed list of measures to hold and measures to retire, with a definition and an owner drafted for each one you keep.