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Practitioner Interview: Fabian Stigler, Industrial Engineer

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stiglerIn December 2020, the Performance Magazine editorial team interviewed Fabian Stigler, Industrial Engineer working as a Performance Analyst at IQ Intelligentes Ingenieurmanagement GmbH, Germany, and a former Business Intelligence Specialist for the BMW Group, on behalf of an engineering service provider.

One of the most important key factors I have experienced during my work in this area is the commitment of all the people involved in the implementation and use of KPIs.

1. Give us a brief rundown of your personal life. (How your studies shaped your professional choices and who you are as a person & professional; any role models, presentations, or books that might have inspired you).

I have only recently started working as a performance analyst, but have always been involved with KPIs and analysis. As an industrial engineering student, I wrote my diploma thesis at BMW on “Influencing BMW’s commodity exposure via levers in purchasing contract design”. This was my first point of contact with a large amount of data and the use of analytical procedures.

With the help of my analyses, it was possible to reduce purchasing volatility or to make greater use of hedging advantages by changing the purchasing contract strategy. Moreover, during my five years in international project management for MINI/BMW, I was always confronted with key performance indicators or KPIs as project manager and coordinator, given that we were responsible for the quality, on-time delivery, and unit costs for several MINI/BMW models and over 200,000 vehicles annually.

Subsequently, I worked as a performance analyst and became familiar with the task of condensing the KPIs of five departments into an overall statement, to form a robust and resilient basis for management decisions. During this time, I developed a performance measurement system that represents a multi-dimensional KPI system and ultimately makes the desired detailed statement possible.

Of particular importance for the use of the Performance Measurement System was the professional exchange with colleagues. The associated further development of the system, coupled with the necessary openness of colleagues to innovations, was the basis for creative and novel approaches. Another success factor that should not be neglected was the support and trust of all department heads and the head of my department.

2. Describe your professional development. What was your first encounter with Performance Management? What is your current professional path?

Within the scope of my work in the area of Business Intelligence (BI), I became familiar with the task of analyzing the performance of the main department and the five subordinate departments.

At first, I found a relatively confusing and non-target-oriented compilation of all key figures, which did not provide a basis for management decisions in the sense of BI. Thus, my first task was to set up a structured and flexible plan that condensed the multitude of existing KPIs into an overall statement.

The resulting KPI system (KPI Performance Measurement System) was framed by a maturity model data and the deviation documentation. The maturity model-data analyzes and promotes data provision. Finally, deviation documentation takes the results of the KPI system and formulates appropriate actions against identified deviations.

This three-part process, which has been part of the project quality management, forms a closed loop and is restarted again and again to check the relevance and timeliness of the KPIs.

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In addition to this, I have developed a data visualization guideline that supports reporting in an easy to understand and clearly structured presentation. This system is methodical and universally applicable and can therefore be used in many departments and companies/industries. Beyond that, I see further development potential and am continuously optimizing the system.

3. What are the benefits, in your experience, generated by the usage of KPIs?

KPIs, which are key performance indicators that map the success or failure of processes/departments or entire companies, are early indicators of management. They can be used as a helpful means of demonstrating effectiveness and efficiency. The prerequisite is that the area of responsibility to be evaluated is clearly defined and the objectives are clearly formulated.

From this, we derive our KPIs, which must be precisely defined or clearly communicated to the outside world. Continuous documentation and evaluation of the data obtained is an indispensable prerequisite for achieving the goals set.

Personally, I see many advantages in the use of KPIs. For example, KPIs simplify a large number of complex and business-related issues and replace them with figures that allow comparisons with other processes/departments or companies.

KPIs can also be used to break down the corporate strategy into measurable and controllable variables that make both the overall construct tangible for every employee and the personal influence of each individual on the company’s success apparent.

Top to bottom, managers thus also gain a much deeper insight into ongoing processes and can thus better assess future company performance. This can also help to strengthen the dialog between employees and management.

4. What are the particularities of performance measurement systems in the automotive industry?

I can’t speak for the entire automotive industry here, but I have noticed that with the advent of digitization in the automotive industry and the ever-increasing influence of data, it is increasingly being used as a basis for decision-making.

Whereas experience, coupled with a good gut feeling, has often been the decisive factor for many a decision in the past, these are now increasingly based on a comprehensible and clear database.

There is also an increasing need for the use of a key figure system, which can bundle or condense a large number of key figures/KPIs in order to obtain an even faster overview. I think there are still countless opportunities for improvement here.

5. What are key factors that influence the successful implementation and usage of KPIs at the operational level?

One of the most important key factors I have experienced during my work in this area is the commitment of all the people involved in the implementation and use of KPIs. Chains are said to be only as strong as their weakest link. This saying can be applied to teams operating with KPIs. Only with the will and willingness of everyone involved can KPIs improve performance.

This is a key factor on the human side. In addition, KPIs should be placed or measured close to the operational business side, in order to be able to provide the required feedback with little time lag. KPIs should also reflect the existing operational business in their sum, in a balanced and comprehensive way.

6. In some cases, the development of KPIs for each department leads to conflicting targets and a lack of alignment among different teams. What can be done in the process of setting KPIs, to ensure they will enhance collaboration among departments and contribute to streamlining cross-functional processes?

KPIs should be defined as precisely as necessary and as flexibly as possible. This is already the first balancing act that has to be completed when defining KPIs. Employees need consistent KPIs in order to work efficiently and not run into decision-making difficulties.

A precise analysis of the KPIs is the basis for the success of the system. Each KPI must be analyzed in detail in comparison to the other KPIs. Attention must be paid to whether they act against each other, alongside each other, with each other, or for each other. Ultimately, only KPIs that at least meet the side-by-side criterion should be selected. The selected KPIs must be regularly checked for relevance and timeliness and adjusted if necessary.

The second balancing act is that despite permanent performance measurement, the flexibility of the operational business should nevertheless also be maintained. It should also increase efficiency without slowing down the drive for innovation. The overriding goal should be a sustainable orientation and not short-term actions.

7. What is the contribution that performance measurement brings to quality management? How do these two support each other?

For me, performance measurement and quality management go hand in hand. Determining the status quo through performance measurement is the basis for quality management. From there, we define measures against existing deviations.

Going further, it can be said that performance measurement and quality management represent a closed loop that should be run through again and again. These two areas must be closely interlinked and require close and well-coordinated communication in order to achieve maximum efficiency.

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8. Is one KPI able to accurately capture the performance of one department or an individual, or is it better to make decisions by analyzing an entire scorecard (several KPIs)?

Just like KPIs, the scorecard also provides a deep insight into business performance. Nevertheless, it is relatively rare that a KPI is able to fully reflect the performance of a department or an individual. The use of a scorecard can be quite helpful here.

However, the use of a performance measurement system or KPI – such as the one I developed and use – can also produce the same results as a scorecard. Both can be the basis of important management decisions, based on an analysis.

9. How is technology impacting performance measurement practices?

To exploit the full potential of performance measurement today requires powerful IT instruments. The use of data lakes, powerful servers, and software is an important part of this. You need to be able to access the latest figures at any time.

Therefore, the use of technology is an important component in building a performance measurement system that is resilient and robust. In addition, the use of the right reporting tools is also crucial in order to adequately present the insights we gain and make them available to everyone in an appropriate form.

10. What skills are important in performance measurement?

In addition to a structured and methodical approach, I would mention the qualities of tenacity and persuasiveness. Getting a performance measurement system off the ground and implementing it often requires a great deal of persuasive power. You have to be able to clearly state the advantages of such a system in order to get everyone on board. Strong communication skills play an important role here.

Furthermore, one should have the analytical ability to understand and penetrate the processes and key figures. Last but not least, one must have the awareness to draw correct and comprehensible conclusions from the figures at hand and to address them accordingly.

11. From a personal point of view, what advice would you give to professionals interested in following this specialization?

I can only encourage everyone to look into performance measurement and use it. It is an important tool on the way to the top. At the same time, there is enough room for creativity and finding one’s own way. There are a variety of approaches that can and must be taken individually.

If pursued and expanded in a targeted manner, the benefits will quickly become visible. In doing so, one should not shy away from complexity and rely on the support of experts wherever necessary.

12. How important do you find the concept of work-life balance? Does this field allow for a harmonious relationship between the two, or are there sacrifices that one must be ready to make?

I consider the topic of work-life balance to be a personal and individual objective. The focus varies depending on age and life situation. There is also a broad definition of the term “life,” which can range from spending time with one’s own children, caring for relatives, to professional compensation in one’s free time, sports, or involvement in cultural or political areas.

In Germany, people often assume that they live for their work instead of working to live. Personally – as a member of Generation Y – I don’t see a strong separation between work and private life. I consider time to be a valuable commodity that should be used wisely.

There is not necessarily a need for a balance between these two areas of life. Rather, one’s job should reflect one’s perspectives and interests so that one can stand behind them 100%. In addition, this dynamic balance is not limited to work and life, but also has – in my opinion – a lot to do with the concept of sustainability in every situation.

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