How you can derive the right process indicators

First, a preliminary observation: For various management areas, there are classic key figures such as EBIT, number of new customers, fluctuation rates, complaint rates or scrap quantities. These have the advantage of high comparability, as they are collected in the same way by many other organizations. But are these key figures really always tailored to your strategic management needs? With the Aachen Approach model, we want to show you a 6-step way to achieve individualized key figures.

The Aachen key figure approach model at a glance:

Step 1: Clearly define the strategic direction of the organization

Take a look at your current strategy and goals. What are the bottlenecks or the particularly sensitive aspects there that determine whether you can implement your strategies and/or achieve your goals? What is the basis for your competitive advantages in your sales and — increasingly important — in your procurement markets?

Strategies and goals in organizations are not always explicitly formulated. Typical sources for finding answers include formulated visions and corporate strategies as well as discussions with sales staff who (should) have a feel for how they stand out from the market “with their hand on the market.”

Example from Max Mustermann GmbH: Max Mustermann GmbH wants to stand out from the competition by offering a high degree of flexibility in terms of the individuality of customer orders. The decisive factor here is that even the most individual orders are carried out at a high speed compared to the competition.
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Step 2: Define process chain

In order to use the process indicators in the right places in the process chain, you should now look at your main process chains based on your strategy and check on their contribution to achieving the company goals. It may make sense to focus on processes that are currently causing difficulties or that are not fully mastered. Practice has often shown that these are the biggest “sticking points” for strategy implementation.

Example from Max Mustermann GmbH: At Max Mustermann GmbH, order processing should therefore be considered from customer enquiry to order delivery.
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Step 3: Determine process results (outputs) specifically

It is now time to determine the specific process results of the selected process chain. It is important to ensure that not only the output of the overall process is considered, but also the interim results that arise from the process chain and have an influence on the overall result.

Example from Max Mustermann GmbH: Max Mustermann GmbH's order processing has two main outcomes:

A) The customer order is created according to the individual specification, commissioning is planned, the customer's employees are trained and the order is delivered on schedule. Or...

B)... the order is rejected.
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Step 4: Identify critical success factors (KEF)

In order to measure the significant influencing variables with surgical accuracy and prevent a blurred jungle of process indicators, it is now advisable, based on the process results, to ask: “What conditions must be met in order to achieve the specifically determined process results?” “What can't go wrong?” With the answers to these questions, you'll get your list of success factors. Now filter this list based on how important these aspects can be for the process. This gives you the critical success factors of the process. The most critical success factor is characterized by the fact that it shows the greatest sensitivity to the process outcome.

Example from Max Mustermann GmbH:

General success factors of the process chain:

Response time between customer request and initial sales processing of the request.

Correctness of the statement about technical feasibility (rough check).

Level of detail of requirements before the start of planning the implementation.

Correctness of the calculation of the upper price limit.

Correctness of the statement about technical feasibility (detailed review).

Speed of the communication process between customer and Max Mustermann GmbH.

Critical success factor (KEF) of the process chain: In expert interviews, it was possible to work out that the most critical success factor of the general success factors is correct rough check of technical feasibility is. Whether you are “right” has a twofold effect on achieving the goals of the strategic orientation: You accept the right orders, reject the wrong orders and thus manage to reduce the processing times of the right orders.

Step 5: Check whether real quantification of KEF as a process key figure is possible and useful

In order to derive a targeted process indicator from the critical success factor, you need to think in particular about how to measure this KEF. Make sure that measurement data is available or can be generated with manageable effort.

Here, you can use both primary and secondary data. Primary data allows a direct connection to KEF, while secondary data has no direct connection. When collecting data, care must be taken to ensure that the effort involved in collecting the data is reasonably proportionate to the use of the key figure. If the effort is significantly greater than the benefit, the Kennzahl not useful for regular monitoring.

Example from Max Mustermann GmbH: Proportion of rough tests of major orders (>100 k €) whose technical feasibility was carried out by product managers with over 3 years of service. This ensures that the focus is on the right projects.

Step 6: Transfer process key figure to operation

Once the KEF process key figure has been defined, it can be used to its full potential. Only if the process key figure is taken into account in the day-to-day life of process owners can the process be controlled via the process key figure. If a process key figure monitors results across the process chain and is therefore not directly attributable to anyone, it can be helpful to explicitly assign responsibility for the key figure. This requires systematic monitoring. Experience shows that a key figure profile can help with this systematic monitoring. The key figure profile can contain, for example, the following information:

• unity
• Employee responsible for the key figure
• target value
• Intervention limits (From what value must countermeasures be taken?)
• Key Figure Type (Maximize or Minimize)
• Survey cycle
• Method of survey
• Assignment to processes

instance: A key figure profile was created in the management system. The process indicator is collected in a monthly quality circle.

Customer inquiries in the CRM system are filtered as follows:

• All customer inquiries received in the last month (accepted and rejected)
• Estimated order volume > 100k €

The quotient is calculated from the sum of the orders for which the “performer” has > 3 years of service, by the sum of all customer inquiries in the period. The person responsible for the process interprets this figure over time; for example, there may be kinks due to vacations and, if necessary, takes control measures.

And what if we don't find a useful key figure?

If, after intensive examination, you come to the conclusion that the facts identified as KEF cannot be represented precisely enough or can only be represented as a key figure with regard to the data to be generated with an extremely high level of effort, have the courage to fill the gap! A key figure that is only incorrectly tailored can then lead to incorrect management in the long term.

Practical tip: If you have already mapped your management system in a Q.wiki, it is recommended to do this at the process overview level. In this way, the level of detail for a process indicator is kept at a predictable level.