We Have KPIs, and They Aren’t Working!
It seems so easy – just get the information onto a report and people will know what to do.
Occasionally, some people will know just what to do, while others will not know what to do, or even worse, will do the wrong thing.
‘True but useless’ reports provide lots of information that does not lead to any (good) action, because the root cause of both success and failure cannot be ascertained from the report. Someone on the report may appear to be performing at a very high level, and there’s no way to make that a best practice because you don’t know why they are performing that way. And the same goes for someone who is struggling, the report does not help you understand the ‘why’, and use that to bring about successful change.
Implementing good KPIs requires a holistic understanding of how information gets translated into action. Even more important is to understand just what action should be taken. The KPI Guy will walk you through the strategic use of KPIs, right down to the tactical action of using the dashboards & scorecards in the right way.
Getting Key Performance Indicators to be used for the right purposes requires more than just pumping some data onto a screen or a piece of paper. It begins with connecting KPIs to strategic business initiatives, and ends with empowering front line employees to interpret the data and take the right action.
Lots of good things start to happen when you measure the right things in the right way, including:
- Clarity of purpose – people from the front line through management know exactly what is expected
- Empowered mindset – people know you entrust them with the information and resulting action
- Results – when you measure the right things, the right things get done
- Teamwork – each player knows their role
- $$$ – a good KPI is always designed to make you money or save you money
See below for a little more detail on how the solution can work.
Call us on 720-810-3628 to experience how the solution can work.
Every KPI should have 7 characteristics in order to provide value. When you provide us with 3 or 4 of your most critical KPIs, and we compare them to our list of critical characteristics, you’ll quickly know what’s missing, and whether or not the missing item(s) can be placed. Once we prove the concept with a couple of KPIs, we can jump start your measurement programs.
The solution to the problem involves satisfying the missing requirements for each broken KPI. One or more of the critical 7 elements will be missing, and designing the solution really just means satisfying the missing component(s). The cost benefit analysis is a part of this component, and drives the decision to move forward.
A cultural shift is required to bring attention back to KPIs that have been ignored because they didn’t actually work. Employees should be retrained on the value of the KPIs that have been rehabilitated and given new opportunity to provide feedback on their perceived value of those KPIs. A good explanation of what went wrong the first time and what has changed is critical in overcoming resistance and fundamentally changing mindset. Sometimes renaming the KPI can be wise to erase the association with the previously broken KPI.
A little extra effort is required in this area because we’re not adding something new, we’re overcoming the belief that your KPIs were broken. That creates need for a little extra communication and follow up. The corrected data that is available generates lots of good questions. Anomalies in production are evident almost immediately, and allow for ‘striking while the iron is hot’. Adjustments to the process become more & more granular as the biggest challenges are overcome.