[Whitepaper] Key Performance Indicator (KPI) Strategies: Part 2

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Framework Primer
Key Performance Indicator
(KPI) Strategies: Part 2
Presentation created by
Develop an
Integrated, Holistic
Customer View
Use KPIs for
Machine Learning
(ML)
Deep Dive into KPI
Components
Share KPI Data
Use KPIs to Lead
and Manage the
Organization
Adopt the Less-Is-
More Mentality
Leverage KPIs to
Align the
Organization
3
4
5
61
72

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Contents
 Overview
 KPI Alignment Index
 KPI Strategies
 Templates
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Key Performance Indicator (KPI) Strategies are next-generation KPIs that
emphasize customers, growth, and the future
Presentation Overview
For the data-driven enterprises, KPI definition, development, and deployment will command
the lion’s share of leadership time and focus.
The 2018 Strategic Measurement Global Executive Study and Research Report showed that business leaders worldwide are
struggling to strike a workable balance between tactical and strategic Key Performance Indicators (KPIs); operational and
financial KPIs; and KPIs that effectively capture the moment while anticipating the future. This imbalance is a source of
measurable dissatisfaction and concern as data for KPI improvements continues to increase.
In today’s accelerating technological innovation, intensifying competitive pressure, and increasing customer expectations,
business leaders are forced to rethink how they use KPIs to lead and manage the enterprise.
These trends—individually and collectively—have particular relevance to chief marketing officers and other marketing
executives. They are increasingly finding themselves accountable for growth-oriented objectives. Hence, there is a need to
explore new and novel KPIs for assessing growth.
This framework provides organizations the strategic foundation towards effective use of KPIs as drivers of growth. There
are 7 advanced KPI Strategies, which are powerful and persuasive mechanisms to enhancing revenue and customer
satisfaction.
This presentation focuses on the last 4 KPI Strategies.
Tomorrow’s most important KPI arguments and debates will focus on how—and what—performances are truly key to the
organization’s future success. Being ahead makes a big difference.
This deck also includes slide templates for you to use in your own business presentations.
1 Use KPIs to Lead and Manage the Organization
2 Leverage KPIs to Align the Organization
3 Develop an Integrated, Holistic Customer View
4 Use KPIs for Machine Learning (ML)
5 Deep Dive into KPI Components
6 Share KPI Data
7 Adopt the Less-Is-More Mentality

KPIs are foundational to performance measurement—they are metrics
used to evaluate the success of an organization, activity, or function
A critical skill is to determine the appropriate set of KPIs to measure.
Key Performance Indicators (KPIs) – Overview
A Key Performance Indicator (KPI) is a type of performance measurement metric. KPIs are used to
evaluate the success of an organization, activity (e.g. project KPIs), or function (e.g. financial KPIs,
customer KPIs) in which it engages.
A KPI can represent any
dimension in which
Excellence is crucial for
competitive success.
Examples include:
• Parts of the marketing
mix
• Research and
development
• Low-cost manufacturing
Analysis of KPIs is crucial
in most studies of
Competitive Strategies.
 If rigorously applied,
clarifies what capabilities
or skills companies need
to compete successfully.
 Index allows us to quantify
competitors’ relative
strengths against KPIs.
 Index provides a
structured, concise
technique for comparing
competitors.
STRENGTHS
 The KPIs and comparative
index are only as good as
the business
understanding and
judgment used to develop
them.
LIMITATIONS
The important
insights come
from
understanding
what is key to
success in the
industry or
segment.

Contents
 Overview
 KPI Strategies
 Templates

The KPI Alignment Index indicates how well a company has aligned its
use of KPIs
KPI alignment is critical for successful strategy execution and lasting performance
improvement.
KPI Alignment Index – Overview
As the name suggests, the KPI Alignment Index is built on the concept of KPI alignment.
SCORING
• Higher index score given to those
with higher scores on all 6
questions.
• Lower index score given to those
who scored lower.
RATINGS
1. Bottom quintiles: Measurement
Challenged.
2. Middle 3 quintiles:
Measurement Capable.
3. Top quintile: Measurement
Leaders.
TECHNICAL DESCRIPTION
• Consist of 6 questions.
• Answers are selected using a 5-point scale.
• Z-scores calculated for each of the 6 questions and their respective means.
KPI alignment helps
achieve the following:
 Determines what
leading organizations
are doing.
 Illuminates and
highlights how their
actions set them
apart from the rest
of the pack.is a
 Measures whether
KPIs within an
organization correctly
relate to one another.

The KPI Alignment Index set of 6 survey questions are focused on
measuring the organization’s alignment with its KPIs
A 5-point scale method is used in selecting answers to the 6 questions raised.
KPI Alignment Index – Survey Questions
The KPI Alignment Index Score is determined based on responses made on 6 survey questions.
Source: Leading with Next-generation Key Performance Indicators, Schrage and Kiron, MIT Sloan Management Review, 2018
To what extent do your organization’s KPIs
drive how you lead and/or manage your people
and processes?
1
To what extent do you believe your function’s
KPIs are explicitly and directly aligned to your
organization’s strategic goals and business
outcomes?
2
To what extent do you agree with this
statement: “I feel empowered and enabled to
achieve my KPI business objectives.”?
3
To what extent do you determine and/or set
your function’s KPIs?
4
To what degree do you agree with the
following statement: “I am satisfied with how
the KPIs that I manage/report on inform and
influence decision making across the
enterprise.”
5
To what extent do you (as stakeholder) trust
the accuracy and reliability of your KPIs?
6

Contents
 Overview
 KPI Strategies
 Templates

KPI strategies or pivotal principles have emerged from companies that
have successfully created KPI alignment
This presentation focuses on the last 4 KPI Strategies—see part 1 of the series for the first 3
strategies.
KPI Strategies – Overview
The 2018 Strategic Measurement Global Executive Study and Research Report revealed 7 behaviors
common to advanced users of KPIs.
Develop an
Integrated, Holistic
Customer View
Use KPIs for Machine
Learning (ML)
Deep Dive into KPI
Components
Share KPI Data
Use KPIs to Lead
and Manage the
Organization
Adopt the Less-Is-
More Mentality
Leverage KPIs to
Align the
Organization
3
4
5
61
72
These are the 7 advanced KPI Strategies adopted by Measurement Leaders.
To thrive in today’s
digital landscape,
executives must take
actionable steps
to adapting KPIs.

KPIs for Machine Learning centered on maximizing ML/AI technologies
to achieving enterprise goals
ML-informed KPIs present comparable opportunities to improve alignment
of strategic goals.
4. KPIs for ML – Overview
MEASUREMENT LEADERS APPROACH
• Undertake Investment on automation
and machine learning technologies to
drive marketing activities.
KEY STRATEGY 4
KPIs for Machine
Learning
DESCRIPTION
• Greater investment in
automation and ML
technologies can lead to
better achievement of
current functional KPIs.
CASE EXAMPLES
• Views MLs as a platform for value-
added augmentation and not just an
automated cost reduction.
• Leverages web-hosting company’s
abundance of data to support KPIs
for customer lifetime value. Invests
in KPIs as data training sets for its
smartest ML algorithm.

Incentives and KPIs drive the adoption of Machine Learning
Sophisticated marketers increasingly use ML not just as a cost-cutting measure but to
inform KPI outcomes.
4. KPIs for ML – ML Adoption
Measurement Leaders are more than twice as likely as the Measurement Challenged to affirm that their organization is
already investing in automation and machine-learning technologies to drive marketing activities.
Is your organization investing in new skills or
training in 2018 to make marketing more effective
in using automation and machine learning?
Do you have incentives or internal functional KPIs
to use more automation and machine-learning
technologies to drive marketing activities?

KPI Components is the 5th KPI Strategy focused on digitally drilling down
to a KPI’s components critical for having an effective KPI
The intricate dynamics that underline an organization’s KPIs can be as consequential
as the KPIs themselves.
5. KPI Components – Overview
• Drill down KPIs to see the underlying
data or analytic components that are
aggregated into the KPIs.
• Collect all or a significant portion of their
KPIs in real time.
KEY STRATEGY 5
KPI Components
DESCRIPTION
• Simple KPIs often
conceal complexities
related to time of day,
location, and the age or
gender of prospective or
existing customers.
• This require digitally
drilling the KPI into its
components.
CASE EXAMPLES
• Emphasizes segmentation and
prospect qualification for its
expanding portfolio of services.
• Focuses on attribution in order to
determine which channels have the
most impact.
• Drills down to see the underlying
data aggregated into the KPIs and
check KPI reports more often.
ML-
supported
companies

Accessing KPI “DNA” is essential for effective KPIs
The ability to swiftly disaggregate and reassemble KPI components can create enormous
opportunities.
5. KPI Components – KPI Drill-down
Scoring high on the KPI Alignment Index shows recognition that drilling down to a KPI’s components is critical for
effective KPIs.
I can easily drill down to see the underlying data or analytic components that are
aggregated into my KPIs.
“Agree” values represent respondents who answered “Agree” or “Strongly agree”. “Disagree”
values represent respondents who answered “Disagree” or “Strongly disagree”.
Percentages do not total 100 due to “Don’t know” responses.
Measurement
challenged
Measurement
capable
Measurement
leader
Agree Disagree

This KPI Strategy is focused on facilitating cross-functional collaboration
by sharing KPI data or having shared KPIs
Shared KPIs allow for more effective collaboration as managers see the positive or negative
impact of their own KPIs on others.
6. Shared KPI Data – Overview
• Twice as likely monitor and access other
C-suite or functional leadership KPIs.
KEY STRATEGY 6
Shared KPI Data
DESCRIPTION
• Sharing KPIs or having
shared KPIs.
• Ability and desire to
follow KPIs beyond their
own sphere of
responsibility.
CASE EXAMPLES
• The Leadership team has a shared
set of KPIs on behalf of the brand
horizontally and specifically to the
business.
• Reach extended to sales committee
and direct consumer business and
check upon KPIs that are on their
docket.
• These are embedded into the
leadership team governance to
make sure all are agreeing on what
success is.The content on this page has been partially hidden.

KPI Sharing and Transparency enables opportunistic efficiencies and
outcomes
Transparent, shareable KPIs ca create new dynamics – even conflict – within an
organization.
6. Shared KPI Data – Sharing and Transparency
Measurement Leaders are more than twice as likely as the Measurement Challenged to monitor or have access to other
C-suite or functional leadership KPIs.
Do you monitor or have access to other C-suite or functional leadership KPIs?
Percentages do not total 100 due to “Don’t know” responses.
Measurement
challenged
Measurement
capable
Measurement
leader
Yes No

Less-is-More Mentality is our final KPI Strategy focused on aiming for KPI
parsimony
There is no magic number of desirable or effective KPIs for an organization – but there is
always a strategic way of leading growth using few and meaningful KPIs.
7. Less-is-More Mentality – Overview
• Focus on the 3 top-line KPIs – revenues,
operation, and customer satisfaction.
KEY STRATEGY 7
Less-is-More
Mentality
DESCRIPTION
• Managing a balanced
number of KPI suitable
for organization’s
operation.
• Too many KPIs easily
become unwieldy,
unmanageable, and
create unrealistic
expectations.
• Too few results into
neglect of critical
business issues.
CASE EXAMPLES
• Focuses on a few things that are
really going to make a big difference
to the business.
• Biggest challenge is to sift through
tons of meaningless KPIs to focus
on few, meaningful KPIs.
• Use of individual customer KPIs with
the availability of data and ability to
analyze data.The content on this page has been partially hidden.

Contents
 Overview
 KPI Strategies
 Templates

Insert headline
Insert bumper.
KPI Strategies – TEMPLATE
Use KPIs to Lead and
Manage the Organization
1
Leverage KPIs to Align
the Organization
2
Develop an Integrated,
Holistic Customer View
3
Learning (ML)
4
Deep Dive into KPI
Components
5
Share KPI Data
6
Adopt the Less-Is-More
Mentality
7

Insert headline
Insert bumper.
KPI Strategies – TEMPLATE ALTERNATE
Use KPIs to Lead and
Manage the Organization
1
Leverage KPIs to Align
the Organization
2
Develop an Integrated,
Holistic Customer View
3
Learning (ML)
4
Deep Dive into KPI
Components
5
Share KPI Data
6
Adopt the Less-Is-More
Mentality
7
• Insert filler text, filler text, filler
text.
text, filler text, filler text.
text.
text.
text.
text.
text.
text.

Share KPI
Data
6Develop an
Integrated,
Holistic
Customer View
3
Insert headline
Insert bumper.
KPI Strategies – TEMPLATE ALTERNATE
Use KPIs to
Lead and
Manage the
Organization
1
Use KPIs for
Machine
Learning (ML)
4
Adopt the
Less-Is-More
Mentality
7
Leverage
KPIs to Align
the
Organization
2
Deep Dive
into KPI
Components
5
• Insert filler text,
filler text, filler text.
filler text, filler text,
filler text, filler text,

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PowerPoint Templates.
Flevy was founded under the principle that
companies waste a lot of time and money
recreating the same foundational business
documents. Our vision is for Flevy to
become a comprehensive knowledge base
of business documents. All organizations,
from startups to large enterprises, can use
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find reference or comparison materials, or
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Please contact us with any questions you may have
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[Whitepaper] Key Performance Indicator (KPI) Strategies: Part 2