tag:blogger.com,1999:blog-5698956883949196892.post3153725419919138238..comments2018-03-24T05:07:54.609-07:00Comments on Risk Management Performance Benchmarking: Three fundamentals of KPIsAnonymoushttp://www.blogger.com/profile/02797225960549604196noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5698956883949196892.post-37908852488475259962011-12-07T16:49:56.562-08:002011-12-07T16:49:56.562-08:00Hi
You have written a good article and you make a...Hi<br /><br />You have written a good article and you make a lot of sense. What is missing from the article, possibly only because it was out of scope, is the additional question of: <br /><br />how are you going to respond to a KPI that is flagging attention.<br /><br />This does seem obvious I know, but in my travels I find scores of examples where management teams have great scorecards but take to tactical or strategic action to address KPIs that are demanding action.<br /><br />This is often because the KPI is scoring actuals without reference to a plan. Example, sales are trending down. This is easy to explain. Its the GFC. Another indicator is production. Inventory is climbing. Easy to explain, Sales are down.<br />But when you start to put them together and draw out some ratios and say that inventory can never be more than 1.5: 1 of sales, then when you look at your KPIs, you may not be so quick to rest on the above mentioned explanations. They are both accurate,and individually not overally a big issue, but collectively it means you are rapidally going out of business.Garth Hollowayhttp://www.sixfoot4.com.aunoreply@blogger.com