I recall a discussion with the CEO of a small manufacturing business where he stated that KPIs were irrelevant and his company didn’t need them. When I see the KPIs some people set up, I can understand his concern – but KPIs are essential to the success of any organisation. The difficulty lies in setting them.
All too often, well meaning managers, knowing they need to monitor performance, will set arbitrary KPIs. Numeric targets will be set without regard to what is actually necessary, realistic or even sensible; numbers will be recorded because – well – that’s what good managers do. The result is chasing shadows.
A lot is written about “SMART” targets: Specific, Measurable, Achievable, Realistic and Timely – and here I suggest replacing Achievable with Agreed (agreement from those whose work is being measured) or replacing Realistic with Relevant. KPI means Key Performance Indicator and the “key” part is all too often forgotten. People who do the work being measured are often in the best position to know what is relevant – they know what gets in the way of improvement or even maintaining current performance. These barriers cast a big shadow over their work and it is these we need to focus on – the substance, not the shadows they cast.
Measurement for the sake of measurement, just because it seems the right thing to do, is totally counter-productive. One of the basic tenets of quality management is factual decision making – but that doesn’t mean using just any facts that happen to be easy to gather. It means understanding the system, the underlying processes and the barriers to excellence. It means managers getting out to the work-face, speaking to those in the front line – even getting hands dirty and doing the work (within reason, for managers are not necessarily expert or fully competent in the work they’re called on to manage – which is not a criticism, for the role of manager has its own, quite different, competence needs).
Measure what matters (though, first, you have to find out what matters – and that’s often the hard part)!