Traditionally Key Performance Indicators are measures that describe a company from manager’s point of view. No wonder the Bernard Marr’s starts with economic indicators. We will also not find the level of happiness index or the question we mentioned: “By working here I am becoming a better person.” If we place people first, we need a participative company-specific list of Key Performance Indicators. This does not mean that we should not look at the company from business, economic perspective.

To explain what I mean by perspectives let us take an example of a table. When I want to buy a table, I look at its functionality. I consider its size, shape, and stability. I can imagine the meals, conversations and family life that will concentrate around the table, but when a truck driver comes to take it from the shop to my home, he is only interested in its size and weight so to know how many people have to carry it. For someone, who carries objects the weight is the key indicator.

Participative companies are slightly more complex than tables, but apart from the aspects we were discussing in this project, they also have this down to earth economic aspect. It has to be taken into account if the participative company is to fulfill all other human functions similarly to the weight that has to be taken into consideration before the table can be used properly. In a separate text, you will find short descriptions of the KPI from the Marr’s book that were the basis of the knowledge test. As participative company values and principles require focus on people rather than economic results, I reordered the KPI in a way that should reflect the participative company set of values starting with the people indicators.

We started with the employee perspective as the key perspective for any participative company, then we enumerated the customer perspective as the second, but most frequently most numerous group of stakeholders. Then we had a look at social responsibility indicators which represent interests of mankind in general and future generations. In future participative company-specific key performance indicators, we should take into account the exposure factor and use it as a weight to correct the numbers. For instance, one 15 minutes of a weekly customer visit to a participative company shop is only 1/160 of a working time of the co-op member or employee in the same time interval. On the other hand, the shop may be visited by hundreds of clients. All these facts have to be taken into account while calculating and interpreting the impact of a participative company and its values on people.

no secrets

cc by Kate Ter Haar at flickr

Economics underlines the importance of marketing and advertising in an economy. The Co-operative Values and Principles oblige participative companies to honesty and truth in their market messages. This allows building high reputation and trust for participative company businesses. Unfortunately, many participative companies hide their identity. Anyway, marketing and sales perspectives are important for co-op identity this is why we place the KPI related to them just after the people related indicators. Of course, financial perspective is important as it is the easiest indicator of problems. Similarly, to high temperature as a symptom of illness, low financial indicators may reflect a crisis or pathology of the company.  But as we cannot fight an illness by reducing temperature, in the same way, it would be nonsense to focus on improving financial indicators instead of improving and developing the participative company. Focus on “numbers” leads to such pathologies like that of American energetic corporation Enron, where managers together with the auditors tried to manipulate the numbers to hide the truth about the real condition of the company.

KPI related to operational processes and supply chain should follow the marketing and sales indicators. They are enumerated last not because of their lesser importance to financial factors, but because of their limited or local character. They are calculated for specific products or processes and not for the whole company. Of course, the measures can be agglomerated, but such measures do not reveal the problems the participative company has to deal with. What we have to remember is that these are those indicators that may become the most important daily reference numbers on all local levels of a participative company.

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Key Performance Indicators