How To Get From 50 to 5 KPIsby Stacey Barr
With three powerful questions, you can get from 50 to 5 KPIs, and end your KPI clutter once and for all.
You might think that you have too many KPIs for one or more of the following reasons:
- we have a lot of priorities
- we have a lot of data
- we are told to measure a lot of things
- we have to measure as much as possible, because we have to know what’s happening
- we have a very complex business and a lot matters
These aren’t reasons. They’re excuses. We can be much more deliberate in our choice of KPIs, and end the clutter that those excuses create for us.
To be more deliberate, we can quickly cull the KPIs that aren’t really KPIs. But we can also nip the problem at its cause, when we set the goals and outcomes to measure. Too many goals and outcomes aren’t worth measuring, and we need to filter them out as early as possible.
This filter is a combination of three tremendously liberating questions.
Question 1: Should we improve this, now?
KPIs measure results, and results are often in the form of a goal or outcome. So, for each of your goals or outcomes, ask “should we improve this, now?”
Improving a result means that you’re going to change something to make that result better. And improving it now means within your current planning horizon (which might be a quarter or a year or a couple of years).
You can answer “no” to this question for a result that sometime in the future the answer will be “yes”. It’s about what should be improved now, as a priority above all other things that, ultimately, should be improved.
Question 2: Can we improve this?
Sometimes when we set up KPIs, we measure what’s interesting and not necessarily useful. A KPI should measure a result that we can do something about. If you can’t improve a result, because it’s not really a result impacted by your process or system or team, then measuring it won’t be very useful.
On the flipside, a lot of people think they need 100% control over a result before they can improve it. Not so. You just need to have a good amount of influence over that result. When you know that your decisions and actions can change something and make a result improve, your answer to this question is a “yes”.
Question 3: Will we improve this?
It’s one thing to say you’ll improve a result, and it’s another thing entirely to actually do the improving. All kinds of things can stop us from improving a goal or reaching a target: not enough time, not enough resources, not enough skill or know-how. It’s not worth measuring a result unless we know we will improve it.
This means that we have allocated time and resources and skilled people to make the changes that will improve the result. It means we know we have the capacity to take it on. The answer to this question, will we improve this?, has to be a definite “yes”. “Maybe” is a “no”.
You must answer “yes” to all three questions before you measure.
If you have a result that got a “no” to one of these three questions, don’t measure it. Not yet. Maybe in the future the answer will be “yes” to all three questions. Measure it then. Not now.
And if you have a KPI that is already measuring a result that got a “no” to any of these three questions, put that KPI on the backburner. Stop reporting it, stop arguing about it, stop setting targets for it, stop trying to improve it. It doesn’t matter right now.
These three questions are part of a PuMP technique called the Measurability Tests (a synopsis is here). They are a filter between our goal setting and our measure selection, to make sure that bad goal setting habits aren’t the culprit of our KPI clutter.
Ditch KPIs that aren’t a YES to these 3 questions: Should you improve it? Can you improve it? Will you improve it?
Do you have any examples of goals or outcomes that aren’t a “yes” to all three of these questions?
So then, if a corporately important variable (such as yield) is being “monitored” to detect out of statistical control situations, it’s not a KPI?
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