Why do so many people assume that having KPIs means setting targets? They are related but not inextricable. Siblings but not twins.
People happily discuss KPIs without thinking about what the term means. Let me, first, deconstruct what should be meant by “Key Performance Indicators”. They are identifiable aspects (deliverables, outputs, or other measures), core to successful outcomes, that provide an indication of how a process or organisation is performing. For example, if I wanted fame as a blogger one KPI could be the number of followers I have (on Twitter, etc). Along the way, regular blogs help, so publication frequency might be another KPI. But many people would now feel the need to set targets – how else could we measure success? So I decide to set them at one million followers and a blog post every day. Fine, but do those targets really help?
Deming was a great critic of managing performance by setting targets. If management sets quantitative targets and makes people’s jobs depend on them – they will meet the targets – even if they have to destroy the enterprise to do it. So, using my above example, I publish a blog every day. Some days I don’t have anything interesting to write so I describe my breakfast – basically any old drivel so I can meet my target of a daily publication. I meet my target and can consider myself a success. I end up with half a million followers – that’s a failure according to that target. Have I improved anything? I don’t think so – in fact, if meeting my daily publication target with drivel drives followers away, how is that success? Some will say I should also have a KPI on content quality – try and put a number on that!
My two KPIs are, in truth, quite good indicators – publishing regularly will maintain follower interest (if what I write is interesting) and seeing an increase in followers indicates I’m gaining fame. Adding targets adds no value and, if anything, results in chasing false means to the wrong end.
Set KPIs and monitor them. And, if you set them you can change them if necessary. But don’t think that you need to have targets with them. If you’re trying to improve performance, good KPIs are all you need; if people aren’t already motivated to improve performance targets will, at best, add nothing – at worst (and more likely) they’ll do the opposite of what you want.