Today I am sharing the concept of the Forward Facing KPI. My experience with this began a little over a year ago when I had my first opportunity to hear a presentation from Dan Barnett. Dan’s primary subject matter is called “Make or Break Execution”. The concept in and of itself is simple: Find the things that are critical to the success of your business and focus very sharply on them. Measure them rigorously and constantly adjust to stay on track. Several months later, I had another chance to hear him speak, and after the second time, Dan’s message started to make sense in the context of managing in an ERP project. Dan’s catch phrase for this
Forward Facing KPI’s Explained
Most of the time, I see projects being managed on metrics. When using this method, you either hit certain milestones or you miss them. When a milestone is missed, you probably drop back, re-evaluate and then try again. The problem I have with traditional metrics is that they measure outcomes that have already happened. Therefore by the time you look at a metric, it’s too late. If this is the case, how do you manage a team, or a project and have reasonable confidence that you are heading toward the desired results? This is where Dan’s Make or Break Execution comes in.
The system is based on developing a “Forward Facing KPI”. This is a little different than a traditional metric. This type of KPI is designed to measure an activity that leads to a desired outcome. To put it plainly, it goes something like: “If I do activity A well, then I will get result B”. The activity must be inherently actionable and easy to measure, and the simpler it is, the better.
A Forward Facing KPI Example
You are getting ready to upgrade your ERP system, and need to go through the testing process. There are not enough resources to do a single session full scale test. Instead, you have to test it in phases over the next 2 months. There are 250 items on your checklist for an ERP upgrade. Since every task needs to be done before deployment, you need to divide and conquer.
Your forward facing KPI for this exercise could be Testing Tasks Completed Per Week. In order to make your deadline, you must complete 32 testing tasks per week at the minimum. Each week your team reports on the number of testing tasks that have been completed. If 32 or more were completed, all is well, move on to another issue. If not, you will know that you are off track every 7 days, and you can start correcting it early.
The accountability associated with the forward facing KPI is not only clear and simple, it is immediate. In a group setting, all group members see the KPI results for all other members. On a weekly basis, require all group members to report on their KPI results for the previous week. Most of the time, people really don’t like explaining to their peers why they are preventing the team for achieving the ultimate goal. When this kind of accountability is in place, the problem often clears itself up very quickly. Alternatively, those team members who consistently fail to achieve their KPI goals will not be surprised when they are called to a meeting to discuss their performance, or lack thereof.
This is inherently more effective than the traditional question: “How’s testing going?”…”Oh, we are about half way done”. If you meet on this topic for 10 minutes every week and assess the planned versus actual result on your forward facing KPIs, you are bound to start getting better results with on-time and on-budget delivery. This is because, as Dan puts it, “things are easier to fix when they are 2% off course than they are when it is 20% off course.”
What forward facing KPI’s would help your next ERP project?
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