We’re approaching midyear. And whether or not midyear is also your mid-fiscal year, it’s still a good time to think about the alternatingly dreaded or eagerly anticipated KPIs – Key Performance Indicators – those metrics or measurable factors used to examine and determine how effectively a company is achieving business objectives.
But before you start, do a reality check.
At the department level, KPIs reflect how the department evaluates its success at reaching targets. At the corporate level, KPIs reflect the holistic view of reaching goals.
Trouble is, all too often company and department goals are set – perhaps, annually or quarterly – with no thought given to the best methods of analyzing performance against preset goals.
Are you, your department managers, other executives, board members and analysts using the term “KPIs” as measuring units? Or are you determining how that unit itself truly indicates the company’s progress toward meeting it goals or objectives?
If you’re not doing the latter (focusing on the reachability of objectives), here’s a challenge: Tell your department heads that, this time around, you’re not going to measure your departments, division or teams based on preset metrics but that you’re going to analyze the metric itself to ensure that metric still supports a goal that will drive business targets. Ask yourself – and ask your teams to ask themselves the following:
“Does meeting this goal drive business targets?”
“Do I know the true business objectives as they pertain to these numbers?”
Say What?
OK, let’s start with a simple example – service desk KPIs. If you are the Service Desk Manager, did you and your team resolve to process a certain amount of tickets per person, but you are now helping members of your team spend more time on preventative measures for customers? If that’s the case, then your preset KPIs may need rewriting. Instead of measuring how quickly you brought a system back up, shouldn’t you now be measuring your group’s direct impact on reducing your customers’ downtime in the first place?
But How/When?
Whether you are an individual contributor or the head of an organization, don’t wait to suggest a review of – and hopefully changes to – your current KPIs. The first sign that you’re measuring the wrong thing usually appears during your weekly status reporting. Ask yourself how real the data is, and how many times your customer has also expressed concern over the items on which you and others are reporting. In 2015, they may have complained about how long the ticket queue was, for instance. But if, now, the whole company is concerned with reducing downtime, why are you still talking about volume?
We recently hired a great guy whose last employer’s product failed. When asked why that happened, he explained that it was simple, really. The product itself was failing the customers’ expectations. Lag time, trouble loading pages and other “speed” issues plagued the product. Meanwhile, leadership and management were measuring new-customer acquisition; new partners; new channels, etc. But no one was measuring how many customers returned after an initial visit. By not measuring a key indicator of success – or in this case, failure – the company missed opportunities to identify needs and make meaningful changes. The result, in hindsight, was predictable.
Make sense? Don’t wait.
