STRATEGIC

MANAGEMENT
LECTURE 9

Dr. Mahmoud El Damaty

Consultant Surgeon
AUC & AASTMT Instructor
Lecture Nine
• Key Performance Indicators

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Concept of Performance
Measurement
• Nowadays, we have both the information technology and the understanding to use
performance measures to provide information about how well processes are
working.
• The focus in analysis of those indicators was on negative variance .

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Why measure?
• To provide facts by which to manage.
• To take advantage of the reality that people pay more attention to facts.
• To help make decisions based on fact.
• To help prioritize opportunities for improvement.
• To recognize successes.
• To evaluate performance.
N.B.: Most people are motivated to improve their performance if they are provided
with relevant feedback

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Indicator Definition
• Must be clear and precise.
• Terms used should be clearly defined "operational definition" so that all involved
understand them in the same way.

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Indicator Operational
Definition
• It is a clear quantifiable description of what to measure and the specific, consistent
steps needed to perform such a measure.
• The definition must be standardized across the hospital, or across all hospitals
within a multi-hospital system.
• For example; Patient fall: it is a change in the position of patient from an upper to
lower position, with or without occurrence of injuries.
• Also, the types of falls must be specified:
 Partial falls.
 Assisted falls.

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What’s an Indicator?
• It is a measure which quantifies dimensions of structures, processes or outcomes.
• Reliable and valid indicators must be established so key elements of an
organizational function can be monitored.

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Key performance indicators(KPIs) are metrics used by
an organization to track the success towards a goal
KPIs are a lot like
they are tracking KPIs can
measuring blood
indicators and help point to
pressure and
measurement of changes that
heart rate when
your overall might not be
visiting the doctor
health readily obvious
office

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 KPIs will be aligned with your strategic goals
results will show the progress and Carry out business analysis and
success of business strategies gain knowledge

KPIs are often used for

focus your business actions on
competitive analysis
strategic goals

through these indicators, you can measure success rather

than results

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How do you create effective
KPI
adapt KPIs
to your
business
needs

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 critical success
indicators

Used to analyze strategies are

Performance on the right
KEY path
PERFORMANCE
INDICATORS

Aligned with
Quantifiable
organizational
Measurement
goals

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 Align KPIs
with your
strategic
Create goals
employee Measure
objective based strategies
on success through
organizational KPIs
KPIs
DO Make your
Make your KPIs
Measurable, KPIs
transparent
Relevant and across
Easy to interpret Monitor, organization
Manage and
update your
KPIs

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 Set KPIs
that are
not
be to narrow relevant
about your Set too
measureme many KPIs
nt

Choose
timeframe
regardless of
DON'T Keep KPIs
Secret to
external yourself
factor
Be too Copy KPIs
Brief or from
too another
descriptive company

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How to write KPI
KPI Name ………………
Measure ID Quality Department Purpose
measure name included
KPI ID in the KPI Name ………………… General KPI
Logbook Aim

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 Rational Type of measure
KPI Logic Specific reason Process or outcome KPI

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 Nominator statement Data source
No. of …………. Admission register
Medical record

Included population Excluded population

All inpatients for ……………... All inpatients in …………
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 Denominator statement Data source
Total no. of ……………. Schedule log for ………….

Included population Excluded population

All ………………………. Patients of ……………….

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 Target Data Frequency of measure
More than ….% Gathered as Monthly
of …………. days , % , …..

The Equation
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 KPI of ……………………………………..
Measured ID Quality Measure Department Purpose
Included

Rational Type of Measure

Nominator Statement Data Source

Included Population Excluded Population

Denominator Statement Data Source

Included Population Excluded Population

Target Data Frequency of Measure

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 KPI of Hospital Mortality Rate
Measured ID Quality Measure Department Purpose
Included
MR 123 H. Mortality Rate All Departments except Quality of care
Rational NICU Type of Measure
Safety , Effectiveness & Efficiency Outcome KPI

Nominator Statement Data Source

No. of Deaths Death Logbook

Included Population Excluded Population

No. of Dead patients in all departments No. of Dead patients in NICU

Denominator Statement Data Source

No. of Discharged Patients Alive & Dead Discharge & Death Registers or Logbooks
Included Population Excluded Population
No. of Discharged Patients from ALL Depts No. of Discharged Patients from NICU
Depts
Target Data Frequency of Measure
Accepted International rates % Monthly
The Equation : Mortality Rate = No. of Deaths/No. of Discharges X 100
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 Reliable… Valid…
but
What do they mean??

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Validity
• A valid measuring instrument, whether a ruler, an IQ test, or a survey
instrument, is considered valid if it measures what it is intended to
measure.

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Reliability
• A measurement process/instrument is said to be reliable if repeated
measurements over time on the same attribute give the same or
approximately the same results.

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Key Roadblocks to
Measurement
1. Measurement is threatening:
• There is always an employee's fear of not achieving the management's expectations
with subsequent loss of incentives and jobs.
2. The Desire for Precision
• The basic purpose of quality measurement is to inform the organization if it is
moving towards its goals and objectives.
3. Using Standards as Performance Objectives
• Meeting/achieving certain standards may freeze any further performance
improvement efforts.
• What worked today to satisfy customers or meet standards will not be so tomorrow.
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The Indicator Selection
Process
• When selecting organizational activities for which indicators shall be developed,
there should be focus on high-risk, high-volume-, high-cost, or problem-prone
activities.

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Vague Terms that need to be defined
clearly include
• A patient fall
• An accurate patient bill
• A successful surgical outcome
• A late food tray
• A quick admission

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Types of Indicators
• JCAHO nine dimensions of clinical performance can be used to categorize quality
indicators.
• Indicators can also be categorized based on the Donabedian's model for evaluating
medical quality through developing indicators that represent structures, processes,
or outcomes.

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Uses of Performance
Measures/Indicators
• A process measure
It answers: are we doing the right thing?

• An outcome measure
It answers: are we doing the right things right?

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Key Performance
Indicators
• KPI’s are quantifiable measurements, agreed to beforehand, that reflect the critical
success factors (of the company, department, project.)
• Also Known As: Key Success Indicators (KSI’s)

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Good KPI Characteristics
1. KPI is always connected with the
corporate goals
2. A KPI is decided by the management
3. It belongs to an individual who is
accountable for its outcome
4. They are leading indicators of
performance desired by the
organization
5. Easy to understand
6. A KPI leads to action
7. Few in number
8. It should be balanced not undermine
each other
9. Users can gauge their progress
overtime
10. KPI’s loses its value overtime so they
must be periodically reviewed and
refreshed

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KPIs
• Key Performance Indicator (KPI) is neither a Goal, nor a Key Result Area (KRA), nor a
Target, nor a Result nor a Critical Success Factor. And yet these terms are often the
KPI is compared against actual results to determine the level of success.

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THANK YOU
drdamaty@aucegypt.edu

Dr. Mahmoud Mohamed El Damaty

+201222850959