KPI Systems – a prerequisite for self-renewal

A foresighted KPI system is an essential early warning system for any organization, and prevents from constantly checking your rear-view mirror.

This process of reflection enables a periodic examination of those presumptions and structures concerning relevant environments that prevail within the organization; to then make heedful decisions whether these presumptions and structures can be upheld or if correction is necessary.

A periodic review of a company’s established observation and evaluation points is an important prerequisite for measuring and steering the strategy implementation, and continual examination of the strategic positioning to safeguard one’s own competitiveness.

 

Recognizing the blind spot

An important prerequisite for building up a foresighted KPI System is recognizing the organization’s blind spot. On a management level and amongst important key players, mutual understanding concerning the organization’s impact mechanisms is very helpful when discussions about the blind spot phenomena begin, and an established KPI Systems is viewed from a meta perspective. In that case, it is of avail to recognize what the organization’s focus is currently on when observing relevant environments, as well as which areas are possibly being neglected.

Clarity is required in reference to which criteria an organization selects when they evaluate whether a certain result or procedure is deemed “optimal” or “suboptimal”. Transparency concerning the underlying evaluation criteria is therefore an important prerequisite for necessary reflection, whether these, according to observable tendencies of change in the outside world, can still be viewed as adequate or not. Whether something has been evaluated as “optimal” or “suboptimal” has more to do with the corresponding evaluation criteria than with the subject matter itself.

Thus, by changing the underlying evaluation criteria, the structure concerning reality is significantly influenced and in turn, immediately takes influence upon organizational decisions. For this reason, and whilst taking the organization’s current vision of the future into account, each organization should conduct periodic meta-perspective reviews of the examination and evaluation systems established, to verify the fact that the evaluation criteria used generate those early warning signals that represent a critical prerequisite for a prognostic self-renewal process.

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