The Journey Versus The Destination. The journey is often more telling than the destination. The narrative that lies beyond the stark numbers of a KPI scorecard are gathering immense interest – and for very good reason. This narrative is not just about whether a target was met or missed but crucially to capture several areas of immense value on the journey taken to reach that point.
For organisations, understanding this journey can be transformative, providing insights that lead to less risk, lower costs, better visibility, and ultimately, a more nimble and responsive operating model. Here’s how mapping the route from failure to success—or vice versa—with narrative, can significantly benefit organisations.
Understanding Beyond the Numbers
KPIs, while essential, offer a limited view. They tell us if a goal was achieved but not how it was achieved, what challenges were encountered, or what unforeseen opportunities were leveraged. The story behind the data can reveal patterns of behaviour, areas of unexpected strength, or hidden vulnerabilities within operations. It’s this narrative that can provide the actionable insights needed for genuine improvement and innovation.
Reducing Risk Through Narrative
Mapping the journey behind a KPI scorecard illuminates the decision-making process, the assumptions tested, the risks taken, and the mitigations employed. This understanding allows organisations to build a more robust risk management framework, informed by real-world outcomes and not just theoretical risk assessments. By learning from past experiences, companies can better predict potential pitfalls and plan more effectively for future projects.
Lowering Costs with Insight
Unexpected costs often arise from unforeseen challenges. Understanding the narrative behind success or failure can help identify where resources are being wasted or where efficiencies can be gained. This insight can lead to process improvements that significantly reduce operational costs without sacrificing quality or output.
Enhancing Visibility and Responsiveness
The journey to achieving a KPI can often reveal much about the operational silos within an organisation. By mapping this journey, companies can enhance cross-functional visibility and break down barriers that may have previously hindered collaboration and innovation. This increased transparency fosters a culture of continuous improvement and agility, enabling a faster response to market changes or internal challenges.
Spending Less Time on Corrections
When organisations understand the story behind their KPIs, they spend less time rectifying issues. Insights gained from past journeys can inform better planning and decision-making processes, reducing the time and resources spent on correcting course. This proactive approach not only improves efficiency but also allows organisations to focus on growth and development rather than constant firefighting.
Establishing a Robust and Measurable Framework for a Dynamic and Auditable Narrative
The Suppeco digital relationship layer represents a transformative approach to managing and optimising the interactions and transactions between a company and its suppliers. This layer transcends traditional transactional relationships, focusing instead on operational and or strategic alignment, stakeholder engagement, visibility, supplier ownership and accountability, and trust.
Value from narrative [largely unstructured data] created and curated here, can be extrapolated in several ways. For now, let’s focus on creating targeted KPIs, selecting SMART metrics (Specific, Measurable, Achievable, Relevant, Time-bound) and then deploying these KPIs across the areas of business engagement that we intend to measure. Below, we’ve illustrated 2 KPI examples from each of the sections referred to in this article. They are also shown below as the titles for each KPI:
Note: Blue headings represent corresponding headings within the Suppeco KPI engine and creation suite. Arrange test drive here
Understanding Beyond the Numbers KPI name
- Change Implementation Rate: KPI sub-group
- Specific: Description Track the number of insights derived from narrative data analysis that are implemented into operational changes.
- Measurable: Score Count of insights implemented.
- Achievable: Metric type and range Aim to implement insights from at least 50% of completed projects within the following quarter.
- Relevant: Criteria Ensures that actionable insights lead to real changes, improving operational efficiency.
- Time-bound: Frequency Quarterly review and implementation.
- Insight Generation Efficiency: KPI name
- Specific: Description Measure the time taken from identifying an operational inefficiency to generating an actionable insight.
- Measurable: Score Time in days.
- Achievable: Metric type and range Reduce the insight generation time by 20% within six months.
- Relevant: Criteria Faster insights mean quicker improvements and adjustments.
- Time-bound: Frequency Bi-annual evaluation.
Reducing Risk Through Narrative KPI name
- Risk Identification Accuracy: KPI sub-group
- Specific: Description Quantify the percentage of risks identified through narrative analysis that materialised.
- Measurable: Score Percentage of accurately predicted risks.
- Achievable: Metric type and range Aim for an 80% accuracy rate in risk prediction.
- Relevant: Criteria High accuracy in risk identification allows for better preparation and mitigation strategies.
- Time-bound: Frequency Annual assessment.
- Mitigation Strategy Success Rate: KPI sub-group
- Specific: Description Measure the percentage of risks for which the mitigation strategies were successful.
- Measurable: Score Success rate percentage.
- Achievable: Metric type and range Target a success rate of at least 75% for all implemented mitigation strategies.
- Relevant: Criteria Effective mitigation strategies directly contribute to operational stability and resilience.
- Time-bound: Frequency Review after each project or annually, whichever comes first.
Lowering Costs with Insight KPI name
- Operational Cost Reduction Percentage: KPI sub-group
- Specific: Description Achieve a reduction in operational costs through process improvements identified from narrative insights.
- Measurable: Score Percentage reduction in costs.
- Achievable: Metric type and range Target a 10% reduction in identified high-cost areas within one year.
- Relevant: Criteria Directly impacts the bottom line by reducing unnecessary expenses.
- Time-bound: Frequency Annual review.
- Efficiency Improvement Index: KPI sub-group
- Specific: Description Index score improvement based on process efficiencies gained from implemented insights.
- Measurable: Score Index score, based on a composite of efficiency metrics.
- Achievable: Metric type and range Improve the efficiency index by 15% within one year.
- Relevant: Criteria Improves overall operational efficiency, leading to cost savings and better resource allocation.
- Time-bound: Frequency Annual evaluation.
Enhancing Visibility and Responsiveness KPI name
- Cross-Functional Collaboration Score: KPI sub-group
- Specific: Description Improve cross-departmental collaboration as measured by a set of collaboration KPIs.
- Measurable: Score Score based on survey feedback, project completion times, etc.
- Achievable: Metric type and range Increase the collaboration score by 20% within six months.
- Relevant: Criteria Enhances organisational agility and innovation.
- Time-bound: Frequency Semi-annual review.
- Response Time to Market Changes: KPI sub-group
- Specific: Description Reduce the time taken to adapt operations in response to significant market changes.
- Measurable: Score Time in days from identification to action.
- Achievable: Metric type and range Target a 30% reduction in response time over the next year.
- Relevant: Criteria Increases competitive advantage by enabling quicker adjustments to market dynamics.
- Time-bound: Frequency Annual assessment.
Spending Less Time on Corrections KPI name
- Corrective Action Efficiency Rate: KPI sub-group
- Specific: Description Decrease the time spent on corrective actions by increasing the first-time-fix (FTF) rate.
- Measurable: Score Percentage improvement in FTF rate.
- Achievable: Metric type and range Improve the FTF rate by 25% within one year.
- Relevant: Criteria Reduces time wasted on rework, enhancing productivity.
- Time-bound: Frequency Annual review.
- Preventive Action Implementation Rate: KPI sub-group
- Specific: Description Increase the rate of preventive actions taken based on narrative insights.
- Measurable: Score Count of preventive measures implemented before issues occur.
- Achievable: Metric type and range Implement preventive actions for 80% of potential issues identified through narrative insights within six months.
- Relevant: Criteria Proactively addresses issues before they impact operations.
- Time-bound: Frequency Semi-annual review.
These SMART KPIs can help organisations effectively measure and track the benefits derived from a deeper understanding of the narrative behind their operations, leading to improved performance, efficiency, and resilience.
Further reading and resources can be found here to assist with deploying effective KPIs: No such thing as poor KPI, just poor data.
Further reading can be found here on the importance of narrative and the illusion of the green SLA.
We strongly advocate for a more narrative-driven approach to performance analysis, and we urge organisations to look beyond the numbers.
If you’re ready to explore creating game changing value from the narrative generated across your operation, contact us now to arrange a personalised demo.