Meaningful key performance indicators: Real or illusory?

Abstract

Whether it is measuring the performance of a service provider or providing an accurate picture of organisational performance to senior management, the real estate executive must reconsider how performance is defined, measured and managed. This paper argues that typical portfolio measurements provide managers with little actionable information, and that the specific performance of the organisation is often indiscernible from other influencing factors. To address this critical problem, a framework for implementing a robust performance management system is laid out. The paper discusses the importance of defining critical processes, building effective measures, and balancing the demands of cost, quality and schedule. A structure for linking these measurements to strategy is discussed, as is the methodology for aggregating the measurements in a way that provides appropriate visibility for the different levels of management. With these principles in mind, a truly useful balanced scorecard can be created. The effort required to build a legitimate performance management framework is extensive but necessary. Organisational survival demands key performance indicators that are predictive, actionable and concise. Simply put, without appropriate attention to performance management, corporate real estate organisations will not survive.