KPI Superpower

What would you do if you were given a super power…? No… not flying or saving the world…but rather…. the ability to say “yes” or “no” to the projects your company is working on…. And with each of your “yes’s”, there would be a resource allocation (money and people).

Because of your super power, or “super yes”, your company would be developing new products and 200 of the product developers (that you manage) would be working on the projects of your choice.  Wouldn’t that be cool?

But then imagine that your company actually needs 500 product developers, and your budget is a quarter of what you really need.  Imagine all of the angry BU Presidents sending you nasty messages (after you denied their projects and told them you don’t have any free resources to support their ideas).

And then finally, imagine that at the end of the year, you (and your team) are rated based on the projects you selected, productivity you delivered or the innovation that came out of your shop.  And imagine that your and your team bonus depends on it!

Would you still like that?

How would you select the projects that your team would work on?  Which projects would you reject?  How would you manage angry BUs who are unable to deliver their targets because of your decision?  How would you make this process “emotion-free” and objective, so you wouldn’t be the most hated man/woman in the company?

Last week, I was invited to a meeting with the head of R&D who asked me to come up with the matrix for the Stage Gate process and (human) resource allocation.  In other words … I was asked to create a template that would help my company to decide if the project should obtain our “super yes” status.

During my research (yes, I wanted to know what KPIs other companies are using) I came across an article “Measuring Project Success Using Business KPIs” (  According to the author, good KPIs are

  • Aligned—Agree with the specific organization’s vision, strategy, and objectives.
  • Optimized—The KPIs should be focused on providing organization-wide strategic value rather than on non-critical local business outcomes. Selection of the wrong KPI can result in counterproductive behavior and sub-optimized results.
  • Measurable—Can be quantified/measured.
  • Realistic—Must be cost effective and fit into the organization’s culture and constraints and achievable within the given timeframe.
  • Attainable—Requires targets to be set that are observable, achievable, reasonable, and credible under expected conditions as well as independently validated.
  • Clear—Clear and focused to avoid misinterpretation or ambiguity.
  • Understood—Individuals and groups know how their behaviors and activities contribute to achieving the KPI.
  • Predictive—The KPI may be compared to historical data over a reasonably long time so that trends can be identified.
  • Agreed—All stakeholders should agree and share responsibility for achieving the KPI target.
  • Reported—Regular reports are made available to all stakeholders and contributors so they know the current status and are able to take corrective action if needed.

The author also mentions that there are about 75 measurements that performance experts use, but none of the measurements mentioned in this article is listing the one we decided to use…

In order to assign the resources to a proposed project, our team decided to use NPV/Man days.  So… we will not picking/selecting projects with a high NVP but lengthy in time and with a high headcount requirement.  We can’t afford to tie our resources for months in those projects.

Instead, we will be picking and approving projects that have high NPV, that will be easy (and quick) to implement, that will not tie our resources for months, and that will bring the highest return per resource.

Do you think I made the right recommendation?


7 thoughts on “KPI Superpower

  1. Great article and post, thank you. “Quick Wins” as our company calls them (positive NPV and low resources required) are always a good place to start in terms of adding value to departments and projects. Your post got me thinking about how I have had a lot of experience with KPIs within our company (my team helps calculate the numbers after the KPI is approved) and have seen the negative side of their reporting as well. I think the key point with the article is that they are Understood by the users (for us it may be the field and corporate business units) but this also makes it easier to ‘adjust’ the numbers in the direction you would like. For instance, we once had ‘Telephone Rings Count’ as a KPI, where are stores would be measured on the number of rings a customer would endure before an employee picked up the phone. Stores were tracked and measured on the data and eventually bonuses and pay increases were affected by these KPIs. The stores response? Pick-up every phone call on the first ring…and then hang up. I agree that projects need to be measured and post mortem reviews are great for lessons learned, but I would struggle coming up with specific KPIs for a number of projects I have been involved in previously. I keep going back to, was it on time, was it on budget, and did it meet the original project scope. However, I do think your recommendation was a correct one based on the resource constraints you may face with longer term project. Great post, thank you.

  2. Great post Iwona! I have often seen projects get support because they had a high NPV but everyone failed to evaluate how long it would take or how risky it was. I think the approach you chose is a good one. Another factor that could have been included was a risk factor. A project could have a high NPV and low number of man days, but it could be very risky which may push it down the list of priority projects.

  3. Interesting article, and neat approach! As someone who works in analytics, I certainly appreciate the definitions of good KPIs, and I wouldn’t disagree with any one of them. If anything, I would add one more to the list: “Actionable – The KPIs chosen should be something that can be influenced within the scope of business.” Tracking KPIs are certainly important, but you’ll want to make sure that whatever you’re tracking is something you can work to benefit. Tracking % of late overseas shipments may be meaningful, but if delays are being caused by strikes and FDA activity it may be unrealistic to expect the company to be able to take action on that particular item. Perhaps instead of tracking that, look to a subsection of lost sales to understand what late containers are doing to the business, so that supply chain can work to solve that issue – perhaps by carrying a higher level of safety stock. Now we’re talking actionable!

    ANYWAY – I do like your use of NPV/man days as a critical KPI. I think it’s a good way to strike a balance between value for the company and value for the company NOW. You wouldn’t want to tie up your resources on a multiyear project – especially when a project is only as good as its estimates. Candidly, it’s also a good way for the team to exhibit its productivity in the hectic days following any merger.

  4. I have worked for companies that gave lot of importance to operations excellence. As part of the strategy deployment the company selects 2 TTI (Target to improve) and 6 KPIs (Key performance metrics). There are several advantages to using KPIs but there are also several disadvantages. Here are few that I have come across:
    1. KPIs can be expensive to use, or even impossible. Sometimes it is not easy to quantify every single activity such as customer satisfaction, returns for marketing promotions, employee morale and product quality.
    2. KPIs have limitations to the exactness of results, which often may only be a rough guide rather than a concrete measurement.
    3. Once designed, KPIs can be difficult to change unless you are prepared to disregard carefully built-up comparison yardsticks, such as year-on-year customer satisfaction levels.
    4. KPIs may be difficult to compare among peers—competitive analysis may be best left to an external specialist

  5. I would add one more step: ORGANIZE yourself. Organize your time, your desk , your documentation, your filing system. I have one rule at work and in life. If a task takes me less than 5 min of my time, I do it right away. At work, I file a document I just received (and read) via email – to my shared drive, I file my contract that just got signed, or at home I hang my coat to the closed.
    I organize my schedule too. I schedule my routine meetings in advance, and I schedule pre-work that’s required for these meetings by blocking my calendar strategically in advance. And finally, since I share my time between two locations, I make sure I schedule my meetings accordingly.
    Being organized can cut a lot of your time, energy and save some frustration. It keeps me sane.

  6. Great post. I was attracted by the title. KPI has been a huge topic for the enterprise HR. I am in HR;-)
    Your writing reminded me another management tool OKR. OKR is Objectives and Key Results. OKR pioneered by Intel in 1999, and later was gradually extended to Google, Oracle, LinkedIn and other enterprises. I think OKR is more suitable for project management. Because KPI’s idea is to determine the organization’s goals, and then decompose the organization’s goal to every single position or person. OKR’s idea is to set goals, and then set a clear results of the goals, and then quantify the results.
    Like you mentioned in your post “none of the measurements mentioned in this article is listing the one we decided to use…”. I guess one of the reason is KPI is based on position. It emphasizes what we are supposed to do. And OKR emphasizes what we want to do. So, I agree with choosing some indicator is more suitable for the project. NPV is a good dimension.

  7. I am glad to see that you are embracing the power of KPIs. In my field of Finance, KPIs are a daily responsibility for us to run, examine, and provide to the business in order for them to make informed decisions. We use various KPIs to gain insight and to help with early detection of problems. Some are quick and easy to run and others require extensive inputs, but all are useful and provide opportunity to measure and build trends off of.
    I like how the author lists out suggestions for combing through KPIs so the user is not spending time on KPIs which are not relevant. I have fallen prey to using KPIs which do not tell the complete story or provide a limited view. Sometimes it is a trial and error to get to indicators which will allow for meaningful analysis, however if you can save time and effort and get straight to those which will be helpful than I feel that is the best route.
    The development of the NPV/man days is extremely innovative and one I have never come across in business. I can see the benefit of such a measurement to look at the value of days invested in a project or as part of a process. Often soft costs such as work hours or headcount are very hard to measure and assign comprehensive value to. NPV is very popular and is a great tool to assist with “go or no go” decisions on projects. This expansion on NPV is quite interesting.

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