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Typical Benefits and Difficulties in Developing KPIs

Many companies are rediscovering the criticality of measurement as an important management tool. "You simply can't manage anything you can't measure," says Richard Quinn, vice president of quality at the Sears Merchandising Group. In terms of motivation, KPIs do help motivate an organization toward the strategic destination. KPIs give individuals concrete links to the organization’s strategy and its goals.

In short, the following are few benefits for using KPIs:

  • KPIs function as tools to drive desired behavior.

  • KPIs give individuals direction in what they need to accomplish for the organization’s strategy.

  • People respond to what’s inspected, not what’s expected.

The following are some typical difficulties in developing KPIs within an organization:

  • It may be difficult to get cross-functional and credible representation.

  • Insufficient availability of data.

  • KPIs may not clearly communicate the intent behind the objectives.

  • There may be too many KPIs.

  • There may be a lack of agreement on KPIs.


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