External Predictive Indicators and Key Performance Indicators
Avoid problems during the economic crisis and to prepare for recovery
Part of the Fourth Generation Balanced Scorecard approach

This paper introduces fourteen Indicators for the economic climate. These fourteen indicators are used by smart organisations to avoid problems during the economic crisis and to prepare for recovery. This paper introduces:

• Nine Key Performance Indicators (KPIs) to avoid problems in your organisation
• Five External Predicting Indicators (EPIs) to help you anticipate change and recovery in the economic conditions.

Key Performance Indicators

You are probably familiar with KPIs. Key Performance Indicators. The nine organisational KPIs (Key Performance Indicators) have been chosen to help you monitor the health and performance of your organisation. The focus is on leading indicators, so you can anticipate problems and do something about them, before it is critical. If the credit crisis is hurting badly, some will help you survive to fight another day. Others are chosen to help you stay in touch with your customers and to defend your competitive edge. These eight KPIs form a strategy map, which we provide in section 4.

External Predictive Indicators

We use EPIs to refer to External Predicting Indicators which monitor the external environment. External Predicting Indicators look at the context and environment in which the organisation is operating. They are leading indicators of that environment changing. The signals that your strategy may need to change.

“A crisis is a terrible thing to waste” We have provided five EPIs (External Predictive Indicators) to help you understand and exploit the economic situation. They will help you to anticipate problems and set your strategy in the right direction. They will help you unravel uncertainty, clear the fog, and anticipate changes. Using them you can avoid trouble and exploit opportunities.

This involves a much wider perspective than the traditional view of KPIs and the Balanced Scorecard. Normally KPIs measure the performance of the organisation and the implementation of the organisation’s strategy. At Excitant we have found clients want, and need, to go further and wider. Our approach helps our clients to look at what underpins their strategy. We develop indicators that detect how the environment is changing and whether their strategic assumptions are still valid. We look at the context in which the organisation’s performance takes place, because this influences what is best to measure, how targets are set and whether those targets are achievable.

This monitoring of the external environment is one of the features of our Fourth Generation Balanced Scorecard approach.

Here are the 9 KPIs and 5 EPIs arranged in a Fourth Generation Balanced Scorecard's Strategy Map.

If you want to find out more, down load the report. "Fourteen indicators that smart organisations use to avoid problems during the economic crisis and to prepare for recovery"

Of course, if you want to discuss this further, do please call.