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Crisis Leadership Volume 6 – KPIs vs. Critical Drivers

Baskar Sundaram

Measuring is the only way to create sustainable business success. Sadly, most business leaders only measure the key performance indicators, or KPIs, such as Sales, Profits or Cash. There is no question that KPIs are powerful tools; however, KPIs are an autopsy… they tell you what has happened after the fact and are not predictive about what needs to change to create different results in the future.

If you want to step up your level of sophistication and permanently change your business game, you need to be measuring critical drivers.

Think of critical drivers as causes and KPIs as effects. Stepping on the bathroom scales is a KPI. Exercise and diet are critical drivers. Measure and manage the diet
and exercise and there is no need to step on the scales. 

Let me say it this way: When the results are missing, so is the cause.

Measuring and monitoring your critical driver activities gives you the ability to understand what is happening in your business before seeing the books at the end of the month, quarter or year. It is an early warning system that tells you where you might be veering slightly off course and gives you enough information so you can do something about it before the situation becomes a problem.

Thinking Time:

  • When I have a bad month financially, what are the three – five things that should have happened that didn’t happen…or 
  • what are the things that did happen that shouldn’t have happened? These are your critical drivers. (And none of them will be that somebody left the light on in the janitor’s closet one night!)

Thinking Time!

You can thank me later

Baskar Sundaram

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