When it comes to improving performance, KPIs are still a dark side of management practice. Illuminated by behavioural economics, intrinsic motivation and systems thinking, how can KPIs be made better?
See the warning signs early and avoid these KPI traps …
- Using vague language in strategies, objectives which can’t be measured.
- Using KPIs in a culture of individual judgement.
- Rushing to individual targets linked to rewards.
- Setting arbitrary, ideological targets without studying the system capability.
- Copying KPIs from somewhere else, including previous workplaces.
- Expecting consultants to advise on what KPIs should be.
- Brainstorming KPIs instead of designing them.
- Imposing KPIs or seeking sign-off instead of buy-in.
- Only having lagging KPIs, not in-process drivers.
- KPIs for activities or milestones, not the outcomes created.
- Calling too many things KPIs which aren’t really ‘key’.
- Rushing to data & dashboards.
- Using data ‘because its there’.
- Hoping a ‘BI’ project, tool or developer will create meaningful KPIs.
- Hoping industry ‘best practice’ or ‘benchmark’ KPIs will drive your strategy.
- Relying on ‘off the shelf’ KPI reports in software tools.
- Use KPI reports for defensive ‘CYA’ purposes.
- Compare this period to last period ignoring natural variation.
- Using ‘traffic lights’ in scorecards without statistical integrity.
- KPIs with ‘operational curiosity’ but no ‘performance results’.
- KPIs focused on local ‘silo’ optimisation not strategic alignment.
- KPIs with unclear decision needs, information value, importance vs. urgency.
- Not considering the scope of control & influence of the people affected.
- Not considering the role of KPI evidence in updating beliefs.
- Use ‘lack of resource’ as an improvement excuse.
- Distracted by semantics. KPIs vs. Metrics. Goals vs. Objectives. CSFs vs. KRAs.
- Dismissing the accuracy of measures instead of seeking insights.
- Lack of a robust interpretation & improvement regime.
- KPIs & targets are ‘budget-driven’, not ‘purpose-driven’.
- Neglecting the human effects of being measured, good or bad.
- Preoccupation with contractual compliance vs. improvement KPIs.
- Leaving contractual KPIs & targets to the procurement process.
- Setting contractual KPIs & targets in stone.
- KPIs lack clarity of scope, data sources, calculations.
- Data is collected and interpreted without statistical methods.
- KPIs are dominated by financial rather than behavioural thinking.
- KPIs which ‘rank’ things (or people) without a sound basis for comparison.
- Anchoring on individual events to explain KPIs, neglecting systemic shifts.
What is your experience and can you add to this list?
Get Killer KPIs
Good measurement feedback is a powerful driver of performance but only if we invest in higher value KPIs and use them wisely. The great news is that there’s a practical way to avoid these pitfalls.
Get in touch to set up a discovery call.