How Industry Selected KPIs Can Drive Transformation

How Industry Selected KPIs Can Drive Transformation
How Industry Selected KPIs Can Drive Transformation
By Amanda Skeene, Project Analyst

CEOs and head executives are often in the midst of the silent tension created by peer rankings. Benchmarking practices allow organizations to estimate where they fall on the ranked list of an industry’s best to worst. Industry leaders – or in some cases, influential stakeholders - often identify a few key performance indicators that serve as standard measurements of success across an entire industry. Recently, TransProvians have been engaged in discussions that challenge the existing benchmarking practice in the public transit industry: Have we, as an industry, been monitoring the RIGHT metrics? Should our agencies’ successes be measured predominantly by how many people we move?

For any industry, a key factor in the effectiveness of a benchmarking system is the standardization of performance indicators across all agencies. Industry leaders should align on a definition of success – if we don’t decide, who will? As we engage in thought-provoking discussion during the upcoming APTA conference, we invite agency executives and stakeholders alike to consider the possibility that the industry should rework its benchmarking philosophy. The selection of and alignment on key metrics has the potential to shift industry culture from volume-driven to quality-enhancing.

Here’s how peer benchmarking can influence organizational culture.

The definition of a particular organization’s success is often modelled after success as it has been defined by industry decision-makers. Industry leaders hold the power to shift the focus to Value by identifying KPIs that monitor BOTH quality AND quantity. Once the key industry metrics have been identified, agency leaders may use the following process to increase performance in those key areas:

  1. Establish Baselines - In pursuit of improvement, an agency must first establish baseline values that will be used to identify performance goals and monitor progress.
  2. Benchmarking - Conduct peer benchmarking to gauge the agency’s performance against others of similar characteristics (ridership, operating budget, operating area/urban landscape) in the same strategic performance categories.
  3. Gap Analysis - Conduct a gap analysis to identify the performance areas that can be improved and to what extent.
  4. Work Plan - Develop a strategic plan with an actionable and prioritized work plan focused on delivering the agency’s defined outcomes.
  5. Culture of Improvement - Build a culture of improvement by developing systems to measure, monitor, and report on performance. This system should also encourage ownership of activities and metrics – creating a culture of accountability.

The transit industry has already experienced its fair share of transformation during the past two years. As we continue to explore what the future of transit looks like, industry benchmarking practices should be one of the foremost topics of discussion.