3.3 KPI Tree and Business Review Cadence

Most companies drown in data but starve for insight. They confuse Operational Standards (doing your job) with Strategic KPIs (moving the business forward).

At Dannie, we separate these strictly.

• Operational Standards (Health Metrics): The baseline required to keep the lights on. (e.g., Yield, Attendance, Server Uptime). Maintaining these is "doing your job."
• Strategic KPIs (Mission Metrics): The measures of change. These track the specific "Missions" defined in Chapter 3.1. (e.g., "Market Share in Germany," "New Line Setup Time"). Achieving these is "growth."

The KPI Hierarchy

We organize metrics into a tree structure. The top is not a summary of the bottom; the top is the Destination, the bottom is the Engine Health.

1. Top Level: Mission KPIs (The Destination)

• Owner: CEO / Mission Commanders.
• Focus: Change the Business.
• Nature: Project-based, aggressive, finite.
• Example: If the Mission is "Enter Medical Market," the KPI is "ISO 13485 Certification Audit Score" or "Number of Medical Prototypes Shipped."
• Note: You do not get a bonus for hitting Operational Standards. You get a bonus for hitting Mission KPIs.

2. Mid-Level: Health Metrics (The Vital Signs)

• Owner: Department Heads / Site Leads.
• Focus: Run the Business.
• Nature: Perpetual, stability-focused.
• Example: First Pass Yield (FPY), OTIF (On-Time In-Full), Employee Churn, Gross Margin.
• Rule: These are managed by Exception. If they are Green, we ignore them. If they are Red, we stop and fix.

3. Base Level: Diagnostic Metrics (The Inputs)

• Owner: Team Leads / Individual Contributors.
• Focus: Daily Control.
• Nature: Leading indicators.
• Example: Solder Paste Height, Daily Tickets Closed, Supplier Response Time.

Metric Integrity: The "Single Truth" Law

A metric is useless if the definition is debatable. We do not tolerate "Excel creativity."

1. No Private Spreadsheets

• The Rule: If a metric is reported in a Business Review, it must come from an automated system (ERP/MES/BI Tool).
• Why: Spreadsheets allow manual "massaging" of bad data. Systems tell the truth.
• Exception: A new Mission KPI may be manual for the first quarter. After that, automate it or kill it.

2. The Dictionary Mandate

• The Rule: Every metric must have a written definition in the Dannie Glossary.
• Bad: "Gross Margin." (Does this include shipping? Scrap? Labor?)
• Good: "Standard Gross Margin = (Revenue - BOM Cost - Direct Labor) / Revenue. Excludes Logistics."

3. No Vanity Metrics

• The Rule: Never use "Cumulative" charts for sales or production. They always go up (up and to the right) even if you are failing.
• The Fix: Use "Rate" metrics (Units per Week, Revenue per Month).

The Review Cadence

We align the review cycle with the metric type.

1. Weekly Ops Review (WBR): The Health Check

• Focus: Health Metrics (Red/Green) + Mission Blockers.
• Time: Monday AM (60 Mins).
• Input: Automated Dashboard.
• Question: "Are we stable? Are the Missions unblocked?"
• Output: Immediate corrective actions for "Red" metrics.

2. Monthly Business Review (MBR): The Financial Check

• Focus: P&L Performance + Deep Dives.
• Time: Week 4 of Month (90 Mins).
• Input: Finance Reports + Dept Head Analysis.
• Question: "Did our operational activity convert into profit?"
• Output: Resource reallocation if P&L is drifting.

3. Quarterly Strategy Review (QBR): The Mission Check

• Focus: Mission KPIs (Success/Failure).
• Time: End of Quarter (Half Day).
• Input: Mission Commander Presentations.
• Question: "Did we achieve the Strategic Missions? What are the Missions for next quarter?"
• Output: New Mission Cards issued; Bonuses calculated.

Final Checklist

Metric Type	Purpose	Review Frequency	Integrity Rule
Mission KPI	Measures Growth/Change	Quarterly Deep Dive (Weekly Tracking)	Must link to a specific "Mission Card."
Health Metric	Measures Stability	Weekly (WBR)	Manage by Exception (Red/Green only).
Diagnostic	Measures Inputs	Daily (Stand-up)	Owned by the Operator, not the Manager.
Data Source	Truth	Always	System Generated (No Excel).
Definition	Clarity	Always	Defined in Glossary.