3 Iterations to Roll Out KPIs Organisation-Wide

June 23, 2020 by Stacey Barr

Rolling out an organisation-wide KPI approach in one fell swoop won’t stick. It needs to grow organically to survive.

A spiral Aloe Vera cactus. Credit: https://www.istockphoto.com/au/portfolio/randydellinger

Since I wrote my second book, Prove It!, I’ve had quite a few conversations with leaders who want to roll out a KPI approach organisation-wide. They want to build a high-performance organisation. They want to get teams aligned to the strategic direction. They want everyone to shift from an activity-focus to a results-focus.

In each conversation, I’ve done my best to understand their unique culture, their current strategy, and their aspirations for what high-performance means to them. But each time, I seem to arrive at the same advice: building a high-performance culture through performance measurement has three necessary iterations. Each iteration builds on the previous.

It’s unwise to roll out an organisation-wide KPI approach, in one fell swoop.

We talk a lot about “rolling out” change throughout our organisations. And “rolling out” a KPI approach is often our default thinking. But I reckon it’s wrong. It’s wrong for at least two very unignorable reasons:

  • A new KPI approach requires a lot of unlearning (of deeply rooted bad KPI habits), which is too hard to do
    simultaneously with new learning and implementation.
  • There is a lot of inertia in many organisations’ KPI systems, weighed down by many bad experiences with measurement in the past and a strong resistance to trying yet another approach.

Introducing a new approach to measuring organisation performance is not plug-and-play. It’s not a change to the logical technical systems of the organisation; it’s at least half about the social systems of the organisation.

To integrate a new KPI approach organisation-wide, we need a more organic approach.

What I’ve seen work best is this three-iteration approach:

  1. With support from the senior leadership team, start with one part of the organisation, as a pilot.
  2. Lock it in with the senior leadership team, then let the other parts follow, when they’re ready.
  3. Formally sanction the approach and integrate it with the other performance management processes and systems.

Iteration 1: Start with one part of the organisation.

When we start with one part of the organisation, we’re basically doing a pilot, not a roll-out. One of the best ways to use a pilot as a foundation to building an organisation-wide KPI approach is to:

  1. Pick one strategic goal to focus on measuring.
  2. Form a Measures Team, including the senior leader who owns the chosen strategic goal, the strategy manager, and a few others who work in the part of the organisation that has a big impact on that strategic goal.
  3. Train the Measures Team in a KPI approach, like PuMP, and let them implement the pilot.
  4. Share the approach, the outputs, and the learning with the senior leadership team and anyone else who’s interested (like how we use the Measure Gallery in PuMP).
  5. Reflect on how meaningful the measures are, how engaged the Measures Team were, how much buy-in was created amongst people beyond the Measures Team. Decide on Iteration 2.

Mandy took a similar approach in her organisation, just starting with one team and making their process transparent to the rest of her organisation. Quickly, other teams became interested and wanted to do the same. That’s the signal you’re ready for Iteration 2.

Iteration 2: Let the other parts follow, when they’re ready.

The best and stickiest kind of buy-in to performance measurement is given willingly, not coerced. If it’s coerced, it’s temporary. If it’s given willingly, it’s permanent.

And that’s one of the indicators of success for Iteration 1 – the pilot has generated demand from others who want the same. This creates organic growth of the KPI approach across the organisation, at a pace and intensity that the social system (the culture) can absorb. It goes a bit like this:

  1. Implement the KPI approach with the senior leadership team, to have a clear set of measurable strategic goals and meaningful strategic measures ready to cascade to teams throughout the organisation.
  2. Identify all the teams who have volunteered to implement the KPI approach for themselves.
  3. Guide them to form their own Measures Teams, representing their business unit or division of the organisation.
  4. Arrange a way to train all the Measures Team members in the KPI approach, ideally together so you can begin a KPI Community of Practice.
  5. Use the KPI Community of Practice as a support hub as each Measures Team implements the KPI approach for their business unit or division.
  6. As more teams volunteer, go back to Step 1.

To increase the chances of success even further, consider training a few members from Iteration 1’s Measures Team in advanced KPI facilitation, to provide support to all the new Measures Teams. And when you have a critical mass of the organisation’s parts implementing the new KPI approach, you’re ready for Iteration 3.

Iteration 3: Integrate the KPI approach.

It’s not a performance measurement system alone that will align teams to the strategic direction, shift the focus from activity to results, and get strategy executed. These happen when performance measurement is used as a feedback loop to weave other systems together:

  • The performance measurement approach starts within the strategy design process, making the strategic direction measurable and easier to communicate and understand across the organisation.
  • The performance measurement approach then cascades the strategic direction into the functions and processes of the organisation, creating a tangible line-of-sight that helps every team get aligned to that strategic direction.
  • The performance measurement approach provides the information specifications to data and analytics teams, to build the right reports and dashboards to monitor strategy execution at all levels of the organisation.
  • The performance measurement approach links the monitoring of important performance results with the implementation of change projects or strategic initiatives, to ensure they deliver the intended results.

Formally linking the new KPI approach into all these other processes is the key to sustaining the energy and enthusiasm created through Iteration 2. And it’s going to make the journey to high-performance faster and easier.

It’s unwise to roll out an organisation-wide KPI approach, in one fell swoop. It needs to grow organically, on a foundation of buy-in.
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