#88 Are your KPIs just a “TO DO LIST”?

March 6, 2012 by Stacey Barr

by Mariko Mishiro and Stacey Barr

Needless to say, “Action Plans” are very important for every organization. However, when it comes to setting KPIs, “Action without a Clear Goal” is equal to “doing NOTHING” or even wasting your time and resources before you notice.

things to do list

Reduce CO2 emissions by 25% in 5 years, increase the number of patents to 20 by next year, provide 8 training courses per employee per year. These goals are all actions i.e. they a “To Do List”. The performance measures (or KPIs) you might use to track them could be termed “Action KPIs”. However, doing and becoming are two different things, and understanding the difference is paramount to performance excellence. Here’s why…

List your goals that are written with action language.

These are the goals that state things you are going to do, as opposed to changes you are going to create. Whether you come up with them by spending a lot of time or little time, if your goals are written only with action language, it might be possible that means become ends. Your KPIs are at risk of focusing too much on measuring what you’re doing, rather than measuring the change you’re creating. The “Action KPIs” are important, but not sufficient. You also need “Result KPIs”.

What are “Result KPIs”?

Result KPIs differ from Action KPIs in that they are not focused on activity. Rather, they are expressed as evidence of what you want to achieve in the end, as a result of that activity. Just as successful people always focus on the change they want to create as a result of the things they do, Result KPIs are focused on clear goals that describe changes in performance as a result of the Action KPIs.

A book called “MY GOAL?” written by Richard H. Morita and Ken Shelton introduced a case for Oprah Winfrey, a famous talk show host, about how important it is to have a clear goal to achieve the real objective.

Oprah’s life has always been a struggle with her weight. She had decided to lose weight when she found out that she weighed in at 218 pounds and that was the same as Mike Tyson, former heavyweight champion when she was watching a boxing game.

It was not easy. She tried everything. She exercised but with no plan and she even gained weight more.

She was introduced to Bob Green a personal trainer and spent a lot of time talking about why how much she weighs is important for her. Bob gave her the right information about the mechanism of how the body works and why people rebound. Also he recommended her not to scale her weight but try to focus on a healthy life. She felt relieved and gained confidence.

The biggest change she herself found out was not her body but her mental side. She found out that the most important thing was not to lose weight but to treat herself right. She has no doubt about spending a good life herself now.

From performance measurement perspective, what we can learn from this story is the importance of finding out the real goal as well as the danger of focusing measurement when you don’t have a clear goal. Once you have a clear goal, you would know the right measurement and in the above case, it was not definitely to measure the weight by a set of scales.

Oprah successfully made a “TO BE LIST” which is “To love herself and to love others”. To lose weight was just one of the things that she thought she has “to do” to achieve the goal. Her weight was an Action KPI but not the ultimate performance measurement.

“TO BE LIST” then, “TO DO LIST”

When you start with a “TO BE LIST” first, before you think about your “TO DO LIST”, you can set much more meaning Result KPIs. Then, if appropriate, you can set the Action KPIs that will tie to those Result KPIs. They are both types of performance measures, and as for all performance measures, there are a few tips to keep in mind:

  • Create a relationship map that makes the cause-effect relationships between Result KPIs and Action KPIs clear.
  • Project managers could be the best people to manage the Action KPIs, and performance managers could be the best people to manage the Result KPIs – and of course they would collaborate each other.
  • If you have any Action KPIs that don’t link strongly to a Result KPI, then those could be just a pain for you. Consider deleting them, or they’ll waste precious time and resources.

TAKE ACTION: List your goals and decide which ones are means goals and which ones are end goals. Then map the cause-effect links between the means goals and the appropriate end goals. Make sure your goals tell a sensible story of actions and results before you decide what your Result KPIs and Action KPIs will be.

Mariko Mishiro is the founder of RIDEAL, a consultancy specializing in corporate disclosure and helping clients to set appropriate KPIs for better communication and value creation. The “RIDEAL” concept is “REAL steps, IDEAL pursuit”. Learn more at www.rideal.org

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