Timo Elliott found a great best practices report from TDWI on “how to create and deploy effective metrics” (registration required). The introduction to the document explains the background:
Performance metrics are a powerful tool of organizational change. The adage “What gets measured, gets done,” is true. Companies that define objectives, establish goals, measure progress, reward achievement, and display the results for all to see can turbo-charge productivity and gracefully move an organization in a new direction.
Executives use performance metrics to define and communicate strategic objectives tailored to every individual and role in the organization. Managers use them to identify underperforming individuals or teams and guide them back on track. Employees use performance metrics to focus on what’s important and help them achieve goals defined in their personal performance plans.
But performance metrics are a double-edged sword. The wrong metrics can have unintended consequences: they can wreak havoc on organizational processes, demoralize employees, and undermine productivity and service levels. If the metrics don’t accurately translate the company’s strategy and goals into concrete actions that employees can take on a daily basis, the organization will flounder. Employees will work hard but have nothing to show for their efforts, leaving everyone tired and frustrated. In short, the company will be efficient but ineffective.
The document then goes into to look at lots of different aspects of creating and deploying KPIs and dashboards, a must read for any BI’er.