At a Glance!

Prof. Jan Ketil Arnulf puts the question of KPIs into perspective

Jan Ketil Arnulf KPIsPerformance indicators are vulnerable to three well-known misinterpretations:

  1. Reliability: The measurements are too influenced by chance, as some also feel about oral exams.
  2. Validity: Can we draw conclusions based on the performance indicators? Will satisfied customers always be more profitable?
  3. Habitual thinking: Is the indicator the best expression of what we measure, or should we think again? Indicators that are both reliable and valid will only make you better at yesterday’s solutions. The purpose of performance indicators is to put control in front of thinking.

Tips: Stay clear of the indicator trap. Thinking is difficult and confrontational, but a useful servant to human beings.

By Professor Jan Ketil Arnulf, Associate Professor at BI Norwegian Business School and the Associate Dean of the BI-Fudan MBA program

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