In this video tutorial, accounting professor Kay Stice explores the right number of key performance indicators (KPIs) a company should have. He uses the Pareto Principle, or 80/20 Rule, to determine 10 to 20 KPIs are ideal for an organization.
- Can an organization have too many…key performance indicators, or KPIs?…Well, of course it can.…The word key means that the organization has gone through…a selection process to identify a few key measurements…out of the many possible ones that are the most important.…So how many is too many?…Well, in 1956, the year I was born, George Miller,…a professor of psychology at Princeton University…published a paper titled The Magical Number Seven,…Plus or Minus Two:…Some Limits on Our Capacity for Processing Information.…
Well, I like this title,…because it tells you just about everything you need to know…about the results of Professor Miller's research.…The title itself is an embodiment of the idea…of summarizing a complex set of data…into a few key measures, seven, plus or minus two.…Professor Miller's research indicated that the human brain…can store seven items of information in working memory.…A couple more for numerical digits…and a couple less for complete words.…So as we consider the question of whether an organization…
Jim Stice
Earl Kay Stice
Released
8/4/2016In this course, accounting professors Jim and Kay Stice explain what KPIs your business should consider in a balanced scorecard, from financial goals to employee and customer satisfaction. They describe how to craft a clear mission statement that complements your KPIs, and how to tie performance to incentives. Plus, get a look at KPIs in action, as Jim and Kay break down a case study examining a trucking company's balanced scorecard.
- The importance of KPIs and measuring performance
- Financial goals and measure
- Customer needs and satisfaction
- Employee growth
- Creating an effective mission statement
- Linking measurements and rewards
- Examining a KPI case study
Skill Level Intermediate
Duration
Views
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Introduction
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Welcome1m 41s
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1. Key Performance Indicators (KPIs)
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Importance of KPIs2m 46s
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Technology's impact on KPIs2m 46s
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2. Balanced Scorecard Categories
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Balanced scorecard overview2m 46s
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Financial goals and measures3m 37s
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Internal processes measures3m 57s
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3. Mission Statements and Key Performance Indicators
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4. Performance Evaluation: You Get What You Measure
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Link measures and rewards2m 48s
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5. Case Study: Key Performance Indicators in a Trucking Business
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Cash collection measures2m 51s
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Fuel purchase measures3m 2s
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Conclusion
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Video: Company's ideal number of KPIs