Differences Between KPIs and Objectives/Targets

[Helmut Jilling]

KPIs are misunderstood in most implementations of ISO that I have seen. But the best way to see them is as unseen ingredients that give you the result you are looking for.

For example, a typical ISO implementation might set an objective of clearing all NCs within 2 weeks of audit, with a KPI of 2 weeks. This is called a lagging indicator and it does not influence the time taken by the subject to clear the NC.

It is far better to use what are called "leading indicators" as they influence the outcome.

So we could set the same target with a KPI of running 2 ISO awareness courses per year. So the logic is that the extra training reduces the level of NC and speeds up the time taken to clear them. In this case the KPIs are called leading, because they are designed to influence the outcome.

So we see that using leading KPIs is far more effective.

KPIs are very useful when the right ones are selected but this takes a bit of imagination and it's something I put a lot of thought into. The general rule for a good one is to decide if it's leading or lagging. If lagging it's not much good, so throw it away.

Again, if you have a target of reducing slips and trips on the shop floor from 100 to 50, then a fairly useless lagging KPI would be slips and trips =50. A far better KPI would be floor washed twice each day with ajax non slip.

Hope this helps

I've been doign this a long time, but this is one of the most confusing explanations I've ever read. I actually agree with your premise that leading indicators are better than lagging ones, but lagging indicators serve a purpose as well. They keep score and tell you whether you are on track to meet your targets.

I also think you are confusing KPI's, which are metrics, with targets or goals for those metrics, such as you described. Also, your explanation misses the step of documenting the items in clause 4.1.c.

 

[Helmut Jilling]

Background - marine company in the process of creating an integrated system of ISM Code/ISO 9001/ISO 14001/OHSAS 18001. Certification is not being sought at this time.
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Good morning - I am in the process of reviewing requirements for setting objectives and targets. Can someone please explain the differences between KPIs and objectives/targets. I want to keep things simple with both terminology and process! (when creating the procedure(s).

KPI's is just a term for Key Process Indicators. They are metrics, data you are measuring. Targets are the goals you set for those metrics.

Scrap is a metric (KPI) we track. Our goal, target, is to reduce it to 0.75%

I measure my weight each week. My goal, target, is to lose 13 more pounds.

I agree, keep it simple. It does no one any good to make it complicated.

If you want some help, let me know.

Targets are goals you set for those metrics.