The key to extracting maximum value from Key Performance Indicators is setting up an effective review process and cadence.
Plan, Actual, Variance, and Corrective Action
Say it with me… “PAVCA!” Yeah, as acronyms go, it’s pretty bad and not very memorable. Luckily it’s just as easy to remember: Plan, Actual, Variance, and Corrective Action.
The key to a Pivot Habit KPI review is to review KPI progress against plan. Remember that we don’t just use KPIs to measure progress after the fact. We use KPIs to plan and attain progress. With that in mind, the KPI Review Process is a key ritual to check for progress, celebrate success, debug issues, and get back on track when needed.
The first key here is “Plan, Actual, Variance.” We want to be exceptionally clear about whether we’re on track, ahead of plan, or behind plan. If we’re ahead, this is a great opportunity not only to celebrate, but to look at what’s going well and see if there are opportunities to apply the keys to success more broadly in the business.
Similarly, if we’re running behind plan, this is the time to figure out why. It may be that our best laid plans just aren’t working and it’s time for a small pivot. It may also be that the accountable individual is blocked and needs some help. Whatever the issue, the review process is the time to spot and correct the issue. And that’s what we mean by “Corrective Action.”
At the central management level, or the company roll-up, the official KPI review happens no less than monthly. This is a key ritual for the leadership team to check, celebrate, or calibrate progress.
Make no mistake, though. Company-wide, KPIs are checked much more frequently. For teams as disparate as sale teams and software development teams, the cadence is as frequent as daily. Many project teams default to formal reviews weekly. Still others to every other week.
The cadence at the department or team level is driven most often by a combination of convention as well as the actual work being managed. In particularly, the higher the criticality or risk of the work being managed, more frequent reviews make more sense.
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