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Proactive KPI’s and innovation perfectly match

The publication of your turnover and profit figures is often a surprise. Actually, it shouldn’t. In fact, they just confirm what was already known inside the company. That’s just it! Proactive ‘key performance indicators’ (KPI’s) can seriously flatten this surprise effect or even entirely neutralize it. For sectors subject to innovation, they are even of vital importance.

Oscar distribution
Each company makes a prognosis. What would we like to reach? The publication of the results having to confirm this preview, often looks like an Oscar distribution. Are we going to be rewarded or didn’t we meet the expectations? Still, the publication of these figures doesn’t have to be a ceremony. Actually, it should just confirm what we already knew.

The turnover and profit don’t appear out of the blue. Often, the management reacts as if these figures are suddenly presented. If these results are negative, it often nervously starts asking itself why. Why didn’t we expect this for God’s sake?

The SMART principle
In this context, anticipation is the key word. If we only look behind us, we can’t see what’s ahead of us!

Consequently, late evaluations often lead to panic. This goes for all companies and for sectors subject to innovation in particular, because innovation is very subject to economic fluctuations and if the results are negative, those will be the first budgets to be affected.

Yet, a scorecard with proactive KPI’s can help avoiding a lot of trouble. They allow putting abstract long-term objectives into daily practice. They are the link between theory and practice. The management’s vision will be put into operational short-term objectives, evaluated on the basis of KPI’s.

Balanced KPI’s are thus the measuring tool par excellence. Therefore, a good KPI should meet the SMART principle: it should be specific, measurable, acceptable, realizable and time-based.

Extra proactive
A company of which the growth largely depends on the launch of new products (e.g. the IT sector) needs ‘extra’ proactive KPI’s. This way, it can be measured how many projects switch in time from the design phase to the pilot phase, or from the pilot phase to the start-up phase.

By splitting up the entire project into phases calibrated on a timeline, the management can properly map the entire product procedure. This way, the KPI’s can be fully used as indicators. They show the state of the proceedings and determine whether the planned innovation growth will be reached or not.

Therefore, I strongly advise the management to internally discuss the scorecard with KPI’s each month. This allows adjusting the ‘exploring teams’, mentioned in our previous column, in time. Indeed, evaluating means knowing. Spread the word!

Herman

By Herman van Herterijck

"my ambition is to put the importance of pragmatic and continuous self-coaching on the agenda of current business leaders"

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