We’re missing the target. What target? Why wasn’t I told?
Assuming that the Boards have agreed a set of clear objectives for a joint enterprise, the next step is to use the joint Business Case and Commercial Agreement to develop implementation and operational plans. They must have quantifiable measures to track progress and evaluate success against their targets. In order to oversee the project, centralised management of joint KPIs involving all parties will obviously be essential.
In reality there is often a gulf between top management’s vague high-level aspirations and the practical achievement of goals. Also, the parties continue to go their own way and selectively ignore KPIs. This leads to:
- Lack of clear direction for the new joint enterprise
- Lack of KPIs linked to stated goals
- KPIS are inadequately defined or inappropriate
- KPIs are one-sided
- KPIs don’t reach down to the operational level
- KPIs are short-term
- KPIs are ignored regardless
- KPIs are out of date
The results of these problems are described in the following quotations from managers.
“Because we don't have any quality standards and objectives we can't set goals.” SME
“They don’t involve us in longer term objectives and strategies on markets and the supply chain, nor look at our goals in the long term. This doesn’t give us the confidence to invest.” Confectionery Manufacturing
“I remain to be convinced by the stated aims and objectives of our partner. Superficially they give an impression of wanting to be supportive and close but their actions do not always reflect the objective of joint working.“ Nuclear Engineering
“We have different KPIs, no formal targets other than for sales. As long as you get your money, that's the KPIs met. Isn't it?” IT Cyber Security
“The sustainability targets provide the high-level stimulation to innovate but there are no lower level KPIs so there have been instances where we have failed to deliver essential items to our customers’ restaurants.” Retail Logistics
“Nobody has told us what has to change in this new collaboration with our customer. As a result, we are rushing around trying to look enthusiastic but there is a lot of concern, particularly amongst our supervisors that we will get blamed for failing to deliver the big prizes that are expected.” Global IT Services