The mapping process shows how a scorecard of KPIs provides a predictive performance model when viewed as a map.
Ensure you have the KPIs measurement intervals. A measurement interval means the time between readings on a KPI. For example, it may be that the input in the cause-and-effect diagram should be monthly or weekly to be useful.
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Executive teams use KPIs (key performance indicators) to track success. They are used as reports that provide feedback on the past.
But if used properly, they can become a powerful tool to predict changes in the future. The key is in mapping and measuring intervals.
The relationship between KPIs should be mapped in a cause-and-effect diagram to understand how one KPI impacts another. It requires as little as a whiteboard and a pen.
Choose an end goal and write it on the right-hand side of the board, e.g. for a company to invest funds in its subsidiary. Then, working from right to left, consider what would create this outcome, e.g. profit, return on capital employed, net cashflow.
The end goal for a business is growth. It requires the support of stakeholders with the business owners and investors.
If a business can keep employees happy, it can predict a good relationship with suppliers. Together, the good employee-supplier relationship leads to great outcomes for customers. In turn, an effective relationship between these three stakeholders drives results for investors at the end of the queue.
Tracking relationships can release the full predictive ability of KPIs.
Month-over-month or year-over-year sales results tell you:
For business to be part of the solution to our collective challenges, we leaders must see companies not as soulless moneymaking entities but as “human organizations” made of individuals working together in support of a shared goal. This goal must contribute to the common good by making a positive difference in people’s lives — what author and consultant Lisa Earle McLeod calls a “noble purpose.” In this approach, making money remains an imperative, but profits are not the ultimate objective; rather, they are the outcome of a successful strategy rooted in purpose.
As more companies commit to adopting CSR strategies that address environmental and social issues, it’s becoming more important than ever for these strategies to be goal-driven, ambitious yet achievable, and authentic.
Outlined below are six tips for companies to develop this kind of CSR strategy: Get buy-in from executives, determine material issues, align goals to company values and culture, establish a goal framework, create a system of implementation and accountability, and deliver transparent reporting.
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