Do not leave revenue-affecting decisions to the field alone.

It was a decision that, if treated as a field improvement proposal, could miss a risk directly tied to revenue. At a retailer organized around a membership program, the question was whether member-tier update frequency should be shortened from annually to monthly or quarterly. Behind the benefit of stimulating purchase frequency was a risk that could not be ignored: promotional discounts and membership-benefit discounts could stack on the same sales, directly affecting operating profit.

After separating benefits and risks, the decision was not about the content of KPI design itself. Because the issue was likely to have a financial impact, consultation with the corporate-planning function became a mandatory condition. In other words, the line between which decision is subject to whose approval.

KPIs can be corrected when wrong. Get the approval hierarchy wrong, and you lose the very mechanism by which the error is noticed.