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Peter Geelen
Peter Geelen
CPM Partners

CPM Partners
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Rule 7: cause and effect

Posted about 10 years ago

So we know our strategy map and result KPIs, our level 1 processes and process level 1 KPIs that drive the KPIs on the strategy map. For instance, process level 1 KPI ‘’on time delivery’’ drives customer satisfaction, drives customer loyalty, drives market share, drives profit. All KPIs now suddenly tie in together as cause and effect relationships. It not important to understand leading or lagging, but it is important to understand cause and effect. Customer satisfaction is leading for loyalty but lagging for on time delivery. So is customer satisfaction a leading or lagging performance indicator?

Now build you process model down to the shop floor. You have to use smart conventions to be able to make you process model suitable for performance management. It is not just a matter of flow charts. Think about visualising team handovers on level 2. Process steps with a team at level 3 etcetera. When you have built your process model you can define the KPIs that drive your process level 1 KPIs. Take the next rule, rule number 8, into account to build an appropriate KPI structure.

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