How Many KPIs Do You Need?

Improvement Insights Blog

How Many KPIs Do You Need?

Most companies have way too many KPIs (key process indicators). How many do you need?

“Hi, I’m Jay Arthur, author of “Lean Six Sigma For Hospitals” and the QI Macros [software].

“I go out and I see people, and very often they have too many Key Process Indicators. They’ve got giant dashboards full of all kinds of stuff, and it turns out that that makes it difficult to figure out what to do. A lot of the dashboards are speedometer charts or line graphs or bar charts or some combination of all that stuff, which means you don’t really know if there’s anything going wrong, bad or whatever. All too often, people have heat maps of where things are above or below whatever [level they] decided, so that leads to a bunch of churn and so on.

“I want you to get an idea that maybe what you want to do is reduce the number of Key Process Indicators. Maybe seven, plus or minus two, and those should really trigger things. Now you can have subcategories of those things, but you don’t want a giant messy board of what’s going on. When you [limit] that, then it makes it a lot easier to manage the business because you know which things you’re watching, and you can go pretty easily forward and figure out which things need to be fixed, which needs to be attended to, which needs to be left alone… pretty simple.

“That’s my Improvement Insight for this week: Let’s reduce the number of KPIs to something we can manage. Let’s go out and improve something this week.”

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