Discussion Outline. A. KPIs Defined. B. Why KPIs Matter. C. KPI Menu. D. Implementation. E. Example KPIs. F. Pitfalls

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1 Discussion Outline A. KPIs Defined B. Why KPIs Matter C. KPI Menu D. Implementation E. Example KPIs F. Pitfalls 1

2 Key Performance Indicators (KPI s) Defined Periodic assessment of an organization, business unit, division, department and/or employee (Sometimes referred to as Metrics) 2

3 Key Performance Indicators (KPI s) Criteria Performance indicators should be understandable, meaningful, measurable and controllable. (Similar to S.M.A.R.T. goal setting) 3

4 KPI Benefits 1. Demands communication 2. Clarifies expectations 3. Eliminates micro managing 4. Provides gauges to monitor for all involved 5. Identifies when you are successful but also when you are not 4

5 KPI Benefits 6. Defines where is the area of focus 7. Converts people into planners not reactors 8. Transforms an organization to improve, not only maintain 9. Trains a culture to overcome challenges 10. Adds fun and excitement to your organization 5

6 Key Performance Indicators (KPI s) Types 1. Financial 2. Quantitative 3. Behavioral / Compliance 4. Human Resources 5. Others??? 6

7 Key Performance Indicators (KPI s) Things to Consider Leading vs. Lagging Indicators Administrative Burden Decision Making Audience Strategic Context What are you solving for? Data! Information! Knowledge! Decision 7

8 Quick Start Steps Create Review Communicate Implement Report 8

9 Create Create Employee Department Company Mission, Goals & Objectives 9

10 Implement Implement 1. Set a go live date 2. Assign an implementation driver 3. Obtain buy in 4. Communicate often - Meet, Meet, Meet 5. Practice for a period 6. Start slow - simple and few 7. Just get started 10

11 Report Reporting Methods Business Intelligence (BI) Systems Have the capabilities to report KPI s like never before 1. Dashboards 2. Graphs 3. Custom visual tools 4. Real time data 5. Remote access 6. Focused exceptions 7. Trending 8. Etc 11

12 Report Reporting Dashboards 12

13 Review Reporting Graphs ($M) in backlog KPI - Sample (High is Good) ExpectaFon Zone Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 13

14 Review Review 1. Communicate 2. Review in detail, both good and bad indicators 3. Be disciplined at making changes and following through on commitments 4. Repeat the process each period 5. Create a form/method to document your KPI s 14

15 Review KPI Performance Review Example 15

16 Review Labor Productivity Feedback Labor Feedback Report COST CODE BUDGET USED EARNED ,741 2,013 1, ,828 1, , , , , Total Job 14,353 6,559 5,535 Job Name: Beantown Marketplace Week Ending: 11/9/ ,000 15,000 BUDGET 10,000 USED 5,000 EARNED 0 4,000 3,500 3,000 2,500 2,000 1,500 1,

17 Review Behavioral / Compliance 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Foreman Weekly Planning 80% 78% 56% 87% 90% 73% 71% 72% 69% 58% 46% 72% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % Compliance 17

18 Pitfalls Stalling Out Implementation Data Integrity Culture Buy In Disclosure Time Resources Business Intelligence Management Reporting Cadence 18

19 Final Thoughts Continuous improvement Communication, not enforcement Appropriate audience 19

20 Thank You R. Tyler Paré Consultant As a consultant with FMI, Tyler focuses on leveraging his construction experience, coupled with his advanced knowledge of business mechanics, to help clients mitigate risks and improve productivity. Prior to joining FMI, Tyler worked for multiple general contractors in the Southeast while completing his undergraduate and graduate educations. Tyler has substantial experience in construction estimating, both in negotiated and hard-bid environments. He also has operations experience, serving as project manager on several commercial and industrial projects. Tyler holds a master of business administration with concentrations in finance and real estate from the University of Florida. He also has a master of science in management and a bachelor of science in building construction from the University of Florida. In addition, Tyler is a LEED accredited professional. R. Tyler Paré FMI Corporation 308 South Boulevard Tampa, FL Tel: Fax: Web site: 20

21 About FMI FMI is a leading provider of management consulting, investment banking and people development to the engineering and construction industry. We work in all segments of the industry providing clients with valueadded business solutions, including: Strategic Advisory Market Research and Business Development Leadership and Talent Development Project and Process Improvement Mergers, Acquisitions and Financial Consulting Risk Management Consulting Compensation Benchmarking and Consulting Founded by Dr. Emol A. Fails in 1953, FMI has professionals in offices across the U.S. We deliver innovative, customized solutions to contractors, construction materials producers, manufacturers and suppliers of building materials and equipment, owners and developers, engineers and architects, utilities, and construction industry trade associations. FMI is an advisor you can count on to build and maintain a successful business, from your leadership to your site managers. Investment banking services provided by FMI Capital Advisors, Inc., a registered broker-dealer and wholly owned subsidiary of FMI. 21

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