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What’s the difference between Key Result Areas (KRAs) and Key Performance Indicators (KPIs)?
KRAs create a better outcome, because they help you focus on the future. Here’s an example:
On the West Coast of the North Island of New Zealand, is an amazing place called Waikawau Beach.
To get there, you have to turn off the main road, and drive 17 kilometres down a dusty shingle road. It’s bustling with native birds in a remote bush setting. There’s even a warning for tourists saying: “Thieves are operating in this area. Do not leave valuables in your car.”
On the north-western corner of the car park is a hill with a hand-dug tunnel, used in the 1800s by kauri loggers to transport logs from the valley to the sea. From here they were exported around the world.
You walk towards the tunnel, and, just as you get halfway in, you turn and look back at your car and the security warning sign. You can see it’s still okay because the car is locked and you’ve brought your valuable items with you, so it’s safe.
Now, as you walk towards the tunnel exit on the seaward side you hear and feel the roar of the waves hitting the beach. Ultimately you pop out of the tunnel at the bottom of the cliff. High above you seagulls are wheeling around, waves are crashing onto the beach and then rolling back, leaving a blanket of white foam on the beach which the wind is rolling up into a ball that tumbles along in the tide. The black sand burns your feet.
This is very classic New Zealand West Coast beach experience, and perhaps this is the sort of place you would like to experience for yourself.
So you get out a map, or plug it into your GPS to discover where Waikawau Beach, and you start driving towards it.
Using the past/present/future lets discuss the difference between KRA and KPIs, using your trip to Waikawau Beach to better understand them;
Your vision/future is this West Coach beach experience.
While driving along, everything that is happening in front of your windscreen is your present/Key Result Area.
Everything that is in your rear vision mirror is your Key Performance Indicator/the past – where you have been.
In a Harvard University study of what makes business successful, they compared business leaders and lagers. In the study they identified what the lagers did that was common to the leaders and subtracted it from the leaders.
What was left are the Key Result Areas that leading businesses focus on to become successful. They called this list of KRAs the “Balanced Score Card”.
In my book Revolutionise the way you work I have written a lot more about the Balanced Score Card, and how to become more effective with your existing tools. To understand more about the book go to www.husehill.co.nz or your local NZ library.
