How to create Key Performance Questions

How to create Key Performance Questions

By Anton Sirik

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How to create Key Performance Questions

Key Performance Question (KPQ) focuses on and highlights what the organization needs to know in terms of executing strategic objectives, so enabling a full and focused discussion on how well the organization is delivering to these objectives.

An innovation of LinkedIn influencer Bernard Marr (with whom I co-authored the book Doing More with Less, from which this article is drawn), the following is a powerful ten-step guide for creating KPQs, which was used successfully by many of the case study organizations within the book, as well as many others.

1.   Design between one and three KPQs for each strategic objective on the Strategy Map;

2.  Ensure KPQs are performance related;

3.  Engage people in the creation of your KPQs;

4.  Create short and clear KPQs;

5.  KPQs should be open questions;

6.  KPQs should focus on the present and future;

7.  Refine and improve your KPQs as you use them;

8.  Use your KPQs to design relevant and meaningful performance indicators;

9.  Use KPQs to refine and challenge existing performance indicators;

10. Use KPQs to report, communicate and review performance.

We will now discuss each of these ten steps in a little more detail and provide more practical advice for creating good KPQs. But first note the words of Alphabet Executive Chairman Eric Schmidt, while Chief Executive Officer of Google, “We run the company by questions, not by answers. So in the strategy process we’ve so far formulated 30 questions that we have to answer […] You ask it as a question, rather than a pithy answer, and that stimulates conversation. Out of the conversation comes innovation. Innovation is not something that I just wake up one day and say “I want to innovate.” I think you get a better innovative culture if you ask it as a question.”

1. Design between one and three KPQs for each strategic objective on your Strategy Map

Key questions should be based on what matters in your organization – your strategy. Once you have clarified your strategic objectives and captured them within a Strategy Map you can start designing KPQs.

We recommend that you design between one and three KPQs for each strategic objective on your Strategy Map. As with the logic that it is better to restrict a Strategy Map to a critical few objectives (so to enhance focus and clarity as to what’s really important) the fewer KPQs you have the better – and for the same reasons of focus and clarity.

2. Ensure KPQs are performance related

A KPQ has to be about performance. The aim is to design questions you need to regularly revisit and answer in order to better manage your organization. Performance related questions are those that enable an understanding of how well you are implementing your strategic objectives and to what extent you are meeting your objectives and targets. KPQs are used to provide a performance context to KPIs and help to more effectively prioritize the indicators chosen.

3. Engage people in the creation of your KPQs

KPQs should not be designed in the boardroom alone. Designing KPQs is a great opportunity to engage everyone in the organization as well as some external stakeholders. Try to involve people in the process and ask them what question they would see as most relevant. Once you have designed a list of KPQs take this back to the subject matter experts or different parts within and outside the organization to collect feedback (see the case example below).

4. Create short and clear KPQs

A good KPQ is relatively short, clear, and unambiguous. It should only contain one question. We often produce a string of questions which makes it much harder to guide meaningful and focused data collection. The language should be clear and not contain any jargon or abbreviations that external people might not understand. Likewise, try to stay away from management buzz words and ensure that the question is easy to understand and use language that people in your organization are comfortable with, understand and use.

5. KPQs should be open questions

Questions can be divided into two types: closed questions and open questions. Closed questions such as “have we met our budget?” can be answered by a simple “yes” or “no,” without any further discussion or expansion on the issue. However, if we ask an open question such as “how well are we managing our budget?” the question triggers a wider search for answers and seeks more than a “yes” or “no” response. Open questions make us reflect, they engage our brains to a much greater extent, and they invite explanations and ignite discussion and dialogue. Whenever possible, KPQs should be phrased as open questions.

6. KPQs should focus on the present and future

Questions should be phrased in a way that addresses the present or future: “To what extent are we increasing our market share?” instead of questions that point to the past, e.g. “Has our market share increased?” By focusing on the future, we open up a dialogue that allows us to “do” something about the future. We then look at data in a different light and try to understand what the data and management information means for the future. This helps with the interpretation of the data and ensures we collect data that helps to inform our decision-making and performance improvement.

7. Refine and improve your KPQs as you use them

Once KPQs have been created it is worth waiting to see what answers come back – i.e. how well the KPQs help people to make better informed decisions. Once they are in use it is possible to refine them to improve the focus even more. This is a natural process of learning and refinement and organizations should expect some significant change in the first 12 months of using KPQs. Experience has shown that after about 12 months the changes are less frequent and the KPQs become much better.

8. Use your KPQs to design relevant and meaningful performance indicators

Once you have designed a set of good KPQs linked to your strategic objectives and following the above guidelines, you can use them to guide the design of meaningful and relevant performance indicators. KPQs enable organizational leaders to identify the best data and management information they need to collect to help answer the key performance questions and therefore properly assess progress of a strategic objective.

9. Use KPQs to refine and challenge existing performance indicators

KPQs can be used to challenge and refine any existing performance indicators. Linking them to your KPIs can allow you to put them into context and justify their relevance.

10. Use KPQs to report, communicate and review performance

KPQs can also be used to improve the reporting, communication and review of performance information. In performance reporting and communications, organizations should always put the KPQs with the performance data that is being presented. This way the person who looks at the data understands the purpose of why this data is being collected and is therefore able to put it into context. Furthermore, it allows senior managers to reflect on the answers.

Case Example: Northumbria Healthcare Foundation Trust

Such was the importance placed on KPQs by the UK’s Northumbria Healthcare Foundation Trust (that has 9,500 employees and had about 730,000 patient contacts in 2015/16) that it spent about six months on their formulation at the Board level.

Formulating the KPQs was a highly inclusive approach that involved many groups of employees, including members of the 55-member strong clinical policy group, meeting with Bernard Marr in order to debate and refine the KPQs and then for these insights to be fed-back to the Board for final approval. “We had to make sure that the Board agreed to the KPQs as these would be the questions on which the Board would base its strategic plans,” said Chief Operation Officer Ann Farrar. “If we did not get the KPQs right and agreed at the Board level, we knew we would not be able to transform how the Board worked or to get the business units and the organization to move forward.”

Farrar is completely convinced of the value of KPQ. “If we get the KPQs right then we will know exactly where we need to focus to ensure the delivery of the strategic objectives,” she says. “It has also forced the senior clinicians, for example, to be really clear as to what the answer to the question will be. With that understanding we can better identify the appropriate KPIs and launch the most influential action plans. It actually makes strategic performance management much more real and relevant to senior clinicians,” she adds.”

As an example of KPQs, consider the objective “Deliver world-class quality emergency care and other healthcare services,” This is supported by the KPQs of “to what extent are we operating to the highest standards” and “To what extent are we consistent in our service delivery.” A third KPQ is “To what extent are our (core) processes world-class.” About the later KPQ Farrar makes this insightful observation. “If we use the term world-class, then we have to define it. Too often “world-class,” is a term that is used without sense of what it means. If we use it in a question then we have to be clear as to what the answer will be in terms of knowing that we are world class,” she says. “This is a difficult challenge as in many instances we will not have the data. But the discipline in finding the data and identifying the answer will be extraordinarily useful in significantly improving our performance to the point where we can confidently assess that we are indeed world class.”

Note that the 2015/16 Annual Report highlighted the outstanding success of Northumbria Foundation Trust. As just some examples:

·        Rated outstanding by the Care Quality Commission (CQC) following its inspection in November 2015 (only the 4th Trust ever to receive this accolade)

·        Best place to work in the National Health Service (NHS): for 2015: Nursing times in partnership with NHS employers:

·        97% of patients overall would be extremely likely or likely to recommend the trust

·        99% of patients reported they were treated with respect and dignity at all times

·        95% of staff feel their role makes a difference to patients

·        Finally, in the spirit of doing more with less, the trust recorded a surplus for the year of £11.3 million.

Ends

With some additional material, extracted from the book: Doing More with Less: measuring, analyzing performance in the government and not-for-profit sector: Bernard Marr, James Creelman (foreword from Dr. David Norton), Palgrave Macmillan, 2014.





Original: https://www.i-nexus.com/stratex-hub/how-to-create-key-performance-questions
By: James Creelman
Posted: May 9, 2017, 9:06 am

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Anton Sirik

Proven success in Strategy Execution, Operational Excellence, Business Transformation, Digital Marketing @ i-nexus

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