An example from the airline sector
BA appointed some consultants to investigate and report on the key measures
they should concentrate on to turn around the airline. They came back and told
the CEO that he needed to focus on one critical success factor (CSF): the timely
arrival and departure of aeroplanes.
Finding the CSFs and narrowing them down to no more than five to eight is a
vital step in any KPI exercise, and one seldom performed. The CEO was not
impressed, though, as everybody in the industry knows the importance of
timely planes. However, the consultants then pointed out that this was where
the KPIs lay, and they proposed that the CEO focus on late plane measures.
Improved reputation
The CEO was notified, wherever he was in the world, if a BA plane was delayed
more than a certain length of time. BA airport managers at the relevant airports
knew that if a plane was delayed beyond a certain threshold, they would receive
a personal call from the CEO. It was not long before BA planes had a reputation
for leaving on time.
The late planes KPI was linked to most of the CSFs for the airline. It linked to
the “delivery-in-full-and-on-time” CSF, namely the timely arrival and departure
of aeroplanes; it linked to the “increase-repeat-business” CSF, etc.
Impact on the balanced scorecard
The importance of the CSF for the timely arrival and departure of aeroplanes
can be seen by its impact on all six perspectives of a modified balanced
scorecard. (Employee satisfaction and environment and community are added
to the traditional four perspectives.)
READ MORE (Strategy - Key performance indicators) >>
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