The use of Key Performance Indicators

The use of Key Performance Indicators Many companies are operating with the wrong actions, many of which are wrongly termed key performance indicators (KPIs). Only some organizations supervise their true KPIs.. The types of performance:- Key result indicators (KRIs) inform you how you have done in a viewpoint or critical success feature, Result indicators (RIs) tell you what you have done, Performance indicators (PIs) tell you what to do, KPIs tell you what to do to increase performance dramatically. Many performance measures used by organizations are thus an inappropriate mix of these three types. Onion analogies are used to depict the link of the three measures. We get more information as we strip the layers off the onion. The layers characterize a variety of performance indicators, and the core, the key performance indicators. 1.2 Key Result Indicators What are KRIs? KRIs are measures that often have been mistaken for KPIs. They include: Customer satisfaction, Net profit before tax, . The frequent feature of these measures is that they are the result of many actions. They provide an understandable image of whether you are going in the right direction.Neverthless you is not told what must be done to improve these results. Therefore, the information available by KRIs is best for the board (i.e., those individual who are not concerned with the day-to-day management.)Usually KRIs cover a longer time period than KPIs; they are evaluated on monthly/quarterly cycles, not on a daily/ weekly basis such as KPIs. Separating KRIs from other measures has an intense force on reporting, resulting in a partition of performance measures into those impacting governance and those impacting management. An organization must have a governance report (preferably in a dashboard system), containing of up to 10 procedures giving high-level KRIs. 1.3 Performance and Result Indicators The 80 or so performance measures that lie between the KRIs and the KPIs are the performance and result indicators (PIs and RIs). The performance indicators, while important, are not key to the business. The PIs help teams to align themselves with their organizations strategy. PIs are non-financial and complement the KPIs; they are shown with KPIs on the scorecard for each organization, team, division and department. Performance indicators that trigger KRIs could include: An increase in the percentage of sales with top 10% of customers, Customer complaints from key customers, Late deliveries to key customers. The RIs abridge action, and all economic performance measures are RIs (e.g., daily or weekly sales analysis is a very useful summary, but it is the outcome of the hard work of many teams). We must look at the performance that created sales (outcome) to understand completely what to increase or decrease. Outcome indicators that cause KRIs could include: Net profit on key product lines, Sales made yesterday, Complaints from key customers. 1.4 Key Performance Indicators KPIs stand for a set of method focusing on those aspects of organizational performance that are the most important for the current and future achievement of the organization. KPIs are rarely new to the organization. 1.4.1 Seven Characteristics of KPIs Mr. David Parmenter KPI workshops has done extensive analysis and discussions with over 3,000 participants, which has covered nearly every organization types in the private and public sectors, he has been able to identify the seven characteristics of KPIs. KPIs: Are nonfinancial measures (e.g., not expressed in dollars, yen, pounds, euros, etc.), Are measured regularly (e.g., 24/7, daily, or weekly), Are acted on by the CEO and senior management team (e.g., CEO calls relevant staff to enquire what is going on), visibly specify what action is necessary by staff (e.g., staff can be aware of the measures and know what to put right), Are measures that fix task down to a team (e.g., CEO can call a team leader who can take the required act), Have an important impact (e.g., affect one or more of the critical success factors [CSFs] and more than one BSC perspective), They promote appropriate action (e.g., have been experienced to certify they have a positive impact on performance, whereas poorly thought-through measures can lead to dysfunctional behaviour). Once a dollar sign is put on a measure, it has already converted into a result indicator (e.g., daily sales are an outcome of activities that have taken place to create the sales). The KPI lies deeper down. KPIs should be monitored 24/7, daily, or perhaps weekly for some. KPIs must be supervised 24/7, daily, or possibly weekly for some. A KPI is deep enough in the organization that it can be attached to a team. In other words, the CEO can call someone and ask why. Return on capital employed has never been a KPI, as it cannot be attached to a manager-it is an outcome of many activities under diverse managers. 1.5 Difference between KRIs and KPIs Frequently their is one question that comes forward time and time again: What is the difference between KRIs and KPIs, and RIs and PIs? A cars speedometer provides a useful analogy to show the difference between a result indicator and a performance indicator. The speed the car is travelling is a result indicator, since the cars speed is a combination of what gear the car is in and how many revolutions per minute the engine is doing. Performance indicators might be how efficiently the car is being driven (e.g., a gauge showing how many miles per gallon), or how hot the engine is running (e.g., a temperature gauge). KRIs KPIs Can be financial and non financial Non financial measures Measures mainly monthly or quarterly Measures daily or weakly As a summary of progress in an organizations critical success factor, it is perfect for reporting progress to a board Acted on by the CEO and senior management team It does not help staff or management because nowhere does it tell what you need to fix All staff understand the measure and what corrective action is required Commonly, the only person responsible for a KRI is the CEO Responsibility can be tied down to the individual or team A KRI is designed to summarize activity within one CSF Significant impact (e.g., it impacts on more than one of top CSFs and more than one balanced scorecard perspective) A KRI is a result of many activities managed through variety of performance measures Has a positive impact (e.g., affects all other performance measures in a positive way) Normally reported by way of a trend graph covering at least the last 15 months of activity Normally reported by way of an intranet screen indicating activity, person responsible, past history, so a meaningful phone call can be made RIs PIs Can be financial and nonfinancial Nonfinancial measures (not expressed in dollars, yen, pounds, euros, etc.) Measured daily, weekly, fortnightly, monthly, or sometimes quarterly Same Cannot be tied to a discrete activity Tied to a discrete activity and thus to a team Does not tell you what you need to do more or less of All staff understand what action is required to improve PI Designed to summarize some activity within a CSF/SF Specific activity impacts on one of the CSFs/SFs Result of more than one activity Focuses on a specific activity Normally reported in a team scorecard Same 1.6 Management Models that Have a Profound Impact on KPIs The groundbreaking work of Kaplan and Norton (3) brought to managements attention the fact that performance needed to be measured in a more holistic way. Kaplan and Norton came up with four perspectives: Financial, Customer, Internal Process, and Learning and Growth. But two more perspectives need to be added. Employee Satisfaction is far too important to be relegated to a subsection within internal process. Informed directors know that happy staffs make happy customers who make happy shareholders. The measure employee satisfaction must be more sophisticated than a customer satisfaction survey every blue moon. The Environment and Community perspective has been managed brilliantly by some leading CEOs. Measurement in this area looks at increasing public awareness about being an employee of first choice, staff learning new skills through doing voluntary work in the community, reducing costs through minimizing waste, creating positive press, and increasing higher staff morale by implementing green initiatives. Leading CEOs intuitively work in this area. They realize that the community is the source of your current and future employees and customers. Kaplan and Nortons later work on strategic mapping(4) also alludes to the importance of employee sati sfaction and the environment/community perspectives. This modification is important because it means the BSC now incorporates all triple- bottom-line issues. 1.7 Definition Performance measure:- The term performance measure refers to an indicator used by management to measure, report, and improve performance. Performance measures are classed as key result indicators, result indicators, performance indicators, or key performance indicators. Critical success factors (CSFs):- CSFs are the list of issues or aspects of organizational performance that determine ongoing health, vitality, and wellbeing. Normally there are between five and eight CSFs in any organization. Success factors:- A list of 30 or so issues or aspects of organizational performance that management knows are important in order to perform well in any given sector/ industry. Some of these success factors are much more important; these are known as critical success factors. Balanced scorecard:- A term first introduced by Kaplan and Norton describing how you need to measure performance in a more holistic way. You need to see an organizations performance in a number of different perspectives. Senior management team (SMT):- The team comprised of the CEO and all direct reports. 1.8 Notes 1. Robert S. Kaplan and David P. Norton, The Balanced Scorecard: Translating Strategy into Action (Boston: Harvard Business School Press, 1996). 2. Jeremy Hope and Robin Fraser, Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap (Boston: Harvard Business School Press, 2003). 3. Robert S. Kaplan and David P. Norton, The Balanced Scorecard: Translating Strategy into Action (Boston: Harvard Business School Press, 1996).

Defined Marketing

Many people incorrectly believe that marketing and advertising are the same. From an organizational point of view, marketing is the process of determining the needs and wants of consumers, as well as profitable providing consumers with goods and services they are looking for, or even overcome their expectations. Marketing activity needs to ensure that the products are provided to users in places where they want them, and at the price they are willing to pay, and that information is provided directly by users. This paper will provide several definitions of marketing and explain its importance in organizational success, supported by examples from the business world. Dr. Philip Kotler defines marketing as â€Å"the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services (Kotler, 2012)†. According to Kotler, marketing is also a social and managerial process by which individuals and groups – through creating, offering and exchanging products of value with others, are getting what they need or what they want. Peter Drucker wrote the following: â€Å"Because the purpose of business is to create and keep a customer, the business enterprise has two, and only two, basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business (Drucker, 1973). Marketing plays a central role in achieving organizational success, because it talks about creating and retaining customers. For this reason, companies are focused on marketing, recognizing the importance of building relationships with customers by providing customer satisfaction, and the importance of attracting new customers by creating additional value. Gronroos, in his definition of marketing, emphasizes the importance of building relationships, in which he said that the goal of marketing is to stablish, develop and commercialize long-term relationships with our customers, so that the objectives of stakeholders are met (1999, Gronroos). Since the majority of the market is characterized by fierce competition, this statement indicates a need to monitor and understand the competition, as rivals are those that will turn customers when their needs are not being met. In the exciting world of business, successes and failures are common. Marketing is the essence of all the changes, and it is often the decisive factor in their outcome. This is because the focus is on the customers and their changing needs. Successful organizations are those that are able, not only to get new customers, but also to retain them, by always meeting their changing needs. The company's activities are both reflected and shaped the world in which we live. Almost every year there is a new product or service that fully occupies the attention of the market and makes a great success. Companies are responding to customer needs by proposing that value by providing number of benefits that are offered to customers to meet their needs. Value of the intangible becomes physical, the proposal that may be a combination of products, services, information, and experiences. Brand represents an offer from a known source. Name brand, like McDonald's raises many associations with people: hamburgers, fun, children, fast food, coziness, and so on. These associations make up the brand image. All the companies are struggling to build a powerful brand – to be strong, popular and unique. The essence of the brand is to emotionally connect with consumers and achieve lasting impressions. It should be summed up in a few words, a simple statement that defines the quality, character and uniqueness of the brand. For example, Hallmark sums up the essence of their brand through two words â€Å"enriching lives,† and those two words are the basis for everything in Hallmark, the greeting card design, product development through customer service, merchandising, in-store communications and advertising, and to create a positive working environment for their employment. Hallmark brand essence permeates every aspect of the company and its operations. If we ask marketing and advertising experts around the world, what is the secret of Apple’s success, the answer would always be the same: It's all about the brand. Apple's success owes little to innovative products such as the iPhone, iPad or iPod. The key to their success is the brand that they created. It is no coincidence that during the '80s and '90s, executive marketing director and CEO of Apple, was the former CEO of Pepsi, John Sculley. It is he who, with the vision and energy of Steve Jobs, is responsible for the tectonic shift in the perception of marketing personal computers, which was created using the marketing strategy that was used in the war with Coca-Cola. That strategy has turned Apple into the largest computer company today. â€Å"People talk about technology, but Apple was a marketing company,† Sculley told the Guardian newspaper in 1997. â€Å"It was the marketing company of the decade (Kahney, 2002)†. The company that is aware of the barely noticeable changes that are taking place every day in the market has an advantage over a company that ignores those changes. The ability to anticipate future needs and to respond appropriately is a challenge that is always present in the marketing strategy of any organization. Despite the long tradition, there are no guarantees that all organizations will adopt marketing orientation. Companies that are marketing oriented, primarily focus on customer needs. The changes are seen as a common occurrence, and the ability to adapt is seen as a necessity for survival. The aim of marketing is a long-term customer satisfaction, rather than short-term deceptions and tricks.

Berlitz Kids German Language Pack

It is an unfortunate fact that very few elementary schools teach foreign languages, despite research indicating that children age 12 and younger are much more receptive language learners than older students. The Berlitz Kids Language Pack series is aimed at parents who know this, and want to offer their son or daughter the benefits of a second language. The Berlitz Kids German Language Pack program targets children ages five and up. The Language Pack comes in a colorful cardboard briefcase package with handle that kids can carry around. The Berlitz Kids German package includes the following: The Missing Cat/Die verschwundene Katze story bookAudio CD for the story book and songsFirst 100 German Words picture dictionaryHelp Your Child with a Foreign Language guide bookBerlitz Language German Club certificate The Berlitz Kids German Language Pack materials teach the language in a natural, familiar way that is suited for young learners. In a reading and story-telling format, along with songs in German, kids are introduced to German vocabulary, grammar, and the sounds of the language (on CD). Berlitz has repackaged its 1998 Language Pack edition, dropping the former flashcards, and putting the audio on CD rather than cassettes. The story book is in German with English in smaller print. The accompanying audio CD has excellent sound and includes eight sing-along songs that go with each chapter of the story book. The story of Nicholas and Princess, his missing cat, is a typical illustrated childrens tale that manages to introduce basic German vocabulary and grammar without seeming to teach them overtly. Berlitz offers two additional German story books (The Five Crayons and A Visit to Grandma, also with audio CD) at extra cost, which is one of the few complaints I have about this $27.00 package. For that amount, it should include more than just one story book. Besides The Missing Cat, the only other printed material for the young student is a thin 26-page picture dictionary called the First 100 Words. But parents are offered some real help in guiding their young learner. Besides being able to learn and read along with their youngster, the included 210-page book Help Your Child with a Foreign Language by Opal Dunn helps parents do a better job of introducing a new language to their kids. The book is a comprehensive guide that includes pedagogical information, language activities and games, Language Time ideas, German phrases, mistakes to avoid, suggested teaching strategies, and other resources to help mom or dad enhance the childs learning experience. It encourages parents to participate in their childs language learning by offering good ideas and practical strategies for young learners that they can use. I have awarded the Berlitz Kids Language Pack German program four stars (out of five) because it offers a good introduction to German for kids, but it should include at least one more story book instead of offering it at extra cost. I found the German songs a bit irritating (all sung by the same artists), but most young kids will probably love them. Children and their parents will enjoy learning German with the Language Pack. It is also available for Italian, French, and Spanish. Berlitz Kids German Language PackStory book/audio CD, picture dictionary, parent guide, certificateBerlitz Publishing/Langenscheidt$26.95 SRP