I was facilitating a brainstorm session recently as part of a discussion on the challenges of using Key Performance Indicators (KPIs). People spend a lot of time deciding on their KPIs and often horse-trading over targets. But we were discussing how people actually use the KPIs. After all, KPIs are not an end in themselves. They are there to serve a purpose. To shed light on processes and performance and help move people from the subjective to the objective.
The brainstorm raised lots of good ideas such as:
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- The importance of getting senior level buy-in
- Regular review of the KPIs
- Rules on actions to take if there are more than a certain number of “red” KPIs
- The importance of making sure the definitions are clear
But no-one raised the question of training. I found this intriguing. Do people think that once you have a set of KPIs being reported, everyone somehow automatically knows how to use them? I’m not at all convinced that everyone does know. Sometimes, teams spend a whole meeting debating the possible reasons of why this month’s KPI value is slightly lower than last month’s. They don’t like the idea that perhaps it’s just noise and is unlikely to be worth the time investigating (until we see an actual trend). I’ve been in meetings where most of the KPIs are red and managers throw up their hands because they don’t know what to do. They just hope next month is better. Followers of this blog know that the Pareto Principle would help here. Or maybe the manager gets frustrated and tells the staff the numbers have to get better…which you can always do by playing with definitions rather than actually improving the underlying processes.
There are opportunities to learn more about interpreting data – such as books by Tim Harford, Don Wheeler, Davis Balestracci; or workshops such as at the upcoming MCC vSummit or even from DMPI – but I wonder whether it’s a case of people not knowing what they don’t know? Interpreting KPI data isn’t easy. It needs critical thinking and careful consideration. We should not accept the adage “Lies, damned lies, and statistics!”
If people are not trained to use and interpret KPIs, should you bother with collecting and reporting KPIs at all?
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