Can Executives Accurately Assess Their Own KPI Maturity?

June 26, 2018 by Stacey Barr

Research into KPI maturity in organisations is often based on self-assessment surveys. But how can executives in organisations with low KPI maturity accurately assess their KPI maturity?

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MIT Sloan management Review and Google researched 3225 executives about how they use KPIs to manage and lead their organisations. They used a suite of six questions to populate a KPI Alignment Index:

“Our study measured the role of KPIs in aligning an organization toward its objectives. Three categories emerged: Measurement Leaders, Measurement Capable, and Measurement Challenged.”

The trouble with the questions is that they measure self-assessments. Executives express how they feel or what they believe about these six things:

  1. how KPIs drive how they lead
  2. how well KPIs are aligned to their organisation’s goals
  3. how empowered they feel about their KPIs
  4. how much they are involved in setting their function’s KPIs
  5. how satisfied they are with how well the KPIs inform decision-making
  6. how much they trust the accuracy of their KPIs

The trouble is, I rarely see in reality executives that can accurately assess their organisation’s KPI maturity. I have seen on way too many occasions executives who believe they have great KPIs and yet they utterly fail to align to strategy or result in fundamental business improvement.

Just for kicks, I did a little research project to explore how many published strategic plans contain good KPIs. The scope was mostly the Australian public sector. My research suggests that only 6% of organisations have meaningful KPIs for their strategy.

So most of the executives in this sector allowed their strategic plan to be published publicly with very poor or no KPIs. Many of these executives have very outdated or uneducated ideas about what a KPI really is, what the qualities of a good KPI are, what methods work to create good KPIs, and what role KPIs should take in decision-making.

How could these executives be capable of accurately assessing their KPI maturity? Would a doctor accept and treat the self-diagnosis of her patients? Of course not.

The best option is to hire an expert in KPIs to help you evaluate your KPI maturity, and how best to improve it. But if that’s not an option, then use an objective and validated tool to evaluate your KPI maturity, not just an opinion survey. An example of an objective and validated tool to assess your organsation’s KPI maturity is the PuMP Diagnostic.

How can executives in organisations with low KPI maturity accurately assess their KPI maturity? They can’t.
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DISCUSSION:

What other frameworks do you know of that objectively evaluate KPI maturity in organisations? In what ways have they helped your organisation improve its KPI maturity?

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  1. Bob McGlynn says:

    I think this is related to the “good driver” syndrome. Most people believe that they are good, if not excellent, car drivers. Executives have the confidence to think they understand what is actually driving improvement in the organization – isn’t that part of their job? And like driving, bright assumptions are made that obscure reality in the glaring light from our own halos.
    Now, are the ‘excellent’ drivers actually awful? No, and odds are in their favor, so their habits don’t end up as accidents, at least most of the time. So too, in business; your canvased public sector organizations aren’t outright failing in their mission. Their “good driver” attitude just prevents them from being better drivers…of results.

  2. Joscelyn Haggarty says:

    Interestingly I recently pulled out your PuMP Diagnostic tool to determine if there were any questions I could use to help get a baseline on how our branch conducts quarterly performance reviews. While looking through the questions I realized that our branch first needs to agree on what a mature planning and performance management process would look like. Our branch has decided to use the Plan, Do, Check, Adjust (PDCA) model for their planning. I was thinking of adjusting the PuMP Diagnostic questions to align under PDCA, once we have determined what a “good” PDCA model looks like that incorporates “good” performance measurement habits. Your thoughts?

    • Stacey Barr says:

      Interesting thought, Joscelyn. I’m not sure that the PuMP Diagnostic criteria would align cleanly with the PDCA cycle. In my mind, good performance measures are what informs the implementation of PDCA. You can’t do PDCA without good measures of the results you’re trying to improve. I’m certainly open to a new perspective, but right now I don’t see a one-to-one alignment between the Diagnostic criteria and PDCA. If you come up with something, let me know.

  3. George Knight says:

    What a wonderful piece of work, and away to think of your companies need to focus, there are always a motive to drive your force to have a clear understanding of your KPI’s l will be taking to our teams to have a drive and insensitive to do better and reconistion for their hard word.

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