KPI Traps – Can You Avoid Them?

Yes, measurement is vital for reducing uncertainty and monitoring improvement but its easy to get wrong.

Watch out for these traps and avoid the dark side of KPI dysfunction …

  1. Using vague language in strategies, objectives which can’t be measured.
  2. Using KPIs in a culture of individual judgement.
  3. Rushing to individual targets linked to rewards.
  4. Setting arbitrary, ideological targets without studying the system capability.
  5. Copying KPIs from somewhere else, including previous workplaces.
  6. Expecting consultants to advise on what KPIs should be.
  7. Brainstorming KPIs instead of designing them.
  8. Imposing KPIs or seeking sign-off instead of buy-in.
  9. Only having lagging KPIs, not in-process drivers.
  10. KPIs for activities or milestones, not the outcomes created.
  11. Calling too many things KPIs which aren’t really ‘key’.
  12. Rushing to data & dashboards.
  13. Using data ‘because its there’.
  14. Hoping a ‘BI’ project, tool or developer will create meaningful KPIs.
  15. Hoping industry ‘best practice’ or ‘benchmark’ KPIs will drive your strategy.
  16. Relying on ‘off the shelf’ KPI reports in software tools.
  17. Use KPI reports for defensive ‘CYA’ purposes.
  18. Compare this period to last period ignoring natural variation.
  19. Using ‘traffic lights’ in scorecards without statistical integrity.
  20. KPIs with ‘operational curiosity’ but no ‘performance results’.
  21. KPIs focused on local ‘silo’ optimisation not strategic alignment.
  22. KPIs with unclear decision needs, information value, importance vs. urgency.
  23. Not considering the scope of control & influence of the people affected.
  24. Not considering the role of KPI evidence in updating beliefs.
  25. Use ‘lack of resource’ as an improvement excuse.
  26. Distracted by semantics. KPIs vs. Metrics. Goals vs. Objectives. CSFs vs. KRAs.
  27. Dismissing the accuracy of measures instead of seeking insights.
  28. Lack of a robust interpretation & improvement regime.
  29. KPIs & targets are ‘budget-driven’, not ‘purpose-driven’.
  30. Neglecting the human effects of being measured, good or bad.
  31. Preoccupation with contractual compliance vs. improvement KPIs.
  32. Leaving contractual KPIs & targets to the procurement process.
  33. Setting contractual KPIs & targets in stone.
  34. KPIs lack clarity of scope, data sources, calculations.
  35. Data is collected and interpreted without statistical methods.
  36. KPIs are dominated by financial rather than behavioural thinking.
  37. KPIs which ‘rank’ things (or people) without a sound basis for comparison.
  38. Anchoring on individual events to explain KPIs, neglecting systemic shifts.

What is your experience and can you add to this list?