CI DILEMMA NOVEMBER/DECEMBER 2019
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CI Dilemma
KPI-overload
A company’s mountain of KPIs are causing a headache, with many being measured for
the sake of it, and employees quickly becoming disengaged with having to monitor them
L ike most businesses, we use KPIs
to measure the day-to-day
performance of our staff and ensure
we deliver the high-level strategic
outcomes that the business requires to
be successful. We’re well-versed in
phrases like ‘measure what matters’,
‘what gets measured gets done’ and
‘if you can’t measure it, you can’t
manage it’; while they’re a bit cheesy,
they are generally true and we bear
them in mind when setting the KPIs.
What we’re agonising over is
what to measure with the KPIs.
Financial KPIs are relatively easy –
they’re infl uenced by factors out of our
control – but personal ones are proving
somewhat elusive. We’ve recently tried
implementing a SQCDPE (safety, quality,
approach, which has given us a starting
point in terms of what to measure, but
is still proving to be tricky.
I’m convinced that a signifi cant
cause of the problem is that we are
trying to measure too much ‘stuff ’
and then, further down the line, failing
to act on what the measures are telling
us. Furthermore, our employees are
sick to the back teeth with measuring
structured approach to our KPIs,
and make sure they are measured
properly – and then adhered to?
CI Solution Julian Winn, principal consultant, The Manufacturing Institute
The starting point for KPIs should be the
company strategy. What is the business
trying to achieve? The KPIs should help
to answer the questions that will help to
deliver the strategy. How and where are
you going to collect the data? There is
little point putting a KPI in place if it is
not possible to collect the data
reasonably easily.
How often are you going to measure
things? Some things require being
checked once a shift; for others, once a
month is OK. Once you understand this,
it is possible to calculate the amount of
time required to collect the data.
Who is going to collect the data? Who
is going to take ownership of the KPI?
This could be a member of the SLT or an
area manager. If there is no ownership,
there is no point in having the measure
because nothing will get done.
Another classic mistake is to create
the KPIs in isolation. People in the
organisation need to understand the KPIs
– why are we measuring, what is the link
back to strategy, what is the target/
outcome we are looking for, what can
individuals do to contribute to improving
the measured outcome?
If we are trying to infl uence people
by using KPIs, how and where are
we going to review and display
them? We could use local area
visual boards, site wide KPI
summary boards, talk
about KPIs as part of
local area meetings and
reviews. We are hoping
that our employees will
take action as a result of
the KPIs. All of these
aspects need thinking
through.
There is also a risk that KPIs
become ‘Sacred Cows’. What I mean
by this is that they can become
unchallengeable, probably because of
the self-interest of a part of the company.
In truth, if a KPI is not making a
diff erence, revisit and review the
measure. If it has achieved its purpose,
there is no reason to keep measuring it.
cost, delivery, people, environment)
things – they spend a lot of their
day collecting, analysing and
presenting information, and KPIs
represent another job to do.
How can we take a more
The frequency at which a KPI is
reported on is important. Too often, and
employees can be overwhelmed (or
bored) with data. Too infrequently, and
data can be incomplete or out of date.
There should be a clear mix of
what we call ‘leading’ and
‘lagging’ KPIs:
Leading KPIs
demonstrate the ‘here
and now’ performance to
drive immediate actions.
Lagging KPIs
show the performance
over a longer period of
time, and are the outcome
of leading KPIs.
A fi nal thought to consider is that
‘Measures drive behaviours’ – both good
and bad ones. It’s vital to select KPIs that
support and encourage positive working
and collaboration between employees
and diff erent departments in the
business. Find KPIs that unify all parts
of the company and don’t ‘drive wedges’
between them.
HAVE YOUR SAY: Do you agree with our expert? How have you decided what KPIs are important to your business?
Send us your views and you could appear here next month. Email: chris.beck@markallengroup.com
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