Effective Information & Strategy

Gain Visibility from "Global to Local" ... with KPI matrices

for a more insightful understanding of Performance

Relying mainly on global performance may be misleading

Global perspectives are based on overall aggregates, such as product divisions or countries that do not necessarily behave like individual products or customers seen from a local standpoint. Experience shows that differences in behavior between such viewpoints are often much more important than one would imagine: it is easy enough to consider global and local views through the quadrant segmentation of a matrix based on KPIs.

Discrepancies between local and global are often surprisingly high

Indeed, a product division may belong to a quadrant on a global level, without its individual product items necessarily be in the same quadrant at a detailed level. Our experience with real data, shows that often 50% of the turnover of an aggregate can derive from basic items outside its quadrant. That Extra share may exceed 80%, even if that seems paradoxical. Thus, making decisions essentially on the basis of global data entails large risks of errors.

Drilling-down into details only where needed

However, it is impossible to review everything as time is short and no senior manager wants to risk being lost in irrelevant details. We are hereby confronted with the old problem of trees hiding the forest. A representation of Intra and Extra share (crowns around bubble aggregates), signals when it is important to drill-down in data and when it is not. That can be a valuable aid to management teams wishing to adopt new strategic tools of operational governance.