How to Recognise and Avoid Bad KPI Adviceby Stacey Barr
If you’re searching for KPI advice, here’s how to recognise the good from the bad. Because there’s plenty of bad KPI advice still out there!
Performance measurement has been treated as an afterthought in strategy execution and organisational management for a long time. And it’s also treated as a fairly trivial exercise. These two reasons, I believe, are why so many people go searching for quick advice on how to develop performance measures for their organisation.
But you and I both know that the struggles with setting, implementing, and using meaningful performance measures continue. The quick advice that people find is not solving those struggles. In fact, that quick advice often exacerbates them. And here’s why:
- The advice is thin, and lacks depth and detail for practical implementation.
- The advice is prescriptive, and assumes your organisation is like every other organisation in your sector or industry.
- The advice is incomplete, leaving out vitally important steps in the process to select, implement or use performance measures.
- The advice is manipulative, driving you to purchase an app or product that promises to solve your performance measure challenges.
- The advice is outdated, drawing on old paradigms or frameworks that haven’t stood the test of time.
Let’s dig into each of these reasons, enough so that you can recognise them and avoid them in your search for advice on how to meaningfully measure performance. And just so you’re aware, the examples I provide are the result of my own searches for KPI advice, using Google.
#1 Is the advice thin?
Thin advice sounds more like a cliché or phrase you’ve heard a thousand times already. It contains no clear or practical instruction, and no insights to overcome the struggles that we typically face with measuring performance.
For example, an instruction like “how are you going to measure progress?” is bad advice because it’s too thin. Deciding how to measure progress is the very challenge people have! Good advice would be detailed instruction in how to build quantitative measures from direct evidence of their goals.
If you aren’t sure exactly what action to take, or what to do differently, from the KPI advice you’ve found, then it’s not advice you should pay any further attention to.
#2 Is the advice prescriptive?
Prescriptive advice will subtly (or not so subtly) lead you to a collection of KPIs or performance measures that are (apparently) ready-made for your organisation. This assumption that your organisation is like every other organisation in your sector or industry will ensure that those KPIs won’t align to your organisation’s unique strategy.
For example, offering you a KPI Generator is bad advice because it’s prescriptive. Performance measure professionals realise that most problems come from the inability to resist the temptation to adopt a set of KPIs. Even if they are provided “as examples only”.
The only time to look to KPI or performance measure collections or libraries is after you have drafted the evidence that your measures should quantify. Then you treat those ready-made KPIs as potential measures, to be evaluated alongside other measures you design from that evidence.
#3 Is the advice incomplete?
Incomplete advice helps you only with part of the measurement process. It might tell you to select your KPIs and align them to goals. But gives no instruction on how to implement the KPIs, find the right data, get ownership and engagement, or interpret them validly.
For example, just providing a list of KPI qualities to strive for is bad advice because it’s very incomplete. Often the qualities aren’t comprehensive and don’t relate to all the important aspects of selecting, implementing, and using meaningful measures. Most of the KPI advice I found in my searches was limited to almost randomly gathered tips, with the holistic process of implementing and using KPIs being ignored.
Start your search for KPI advice with a complete framework of the measurement process, so that you can align the advice to the appropriate step, and find advice for each and every step in that process.
#4 Is the advice manipulative?
Manipulative advice steers you in the direction of what the vendor wants you to buy from them. It can be a set of KPI definitions, a dashboard app, or a performance management system.
For example, giving lists of KPIs to quickly start building your dashboard is bad advice because it’s manipulative. Many dashboard vendors ignore the thinking process of what performance information really matters, to get their customers to see their solution as the answer to measurement. Their customers soon discover the dashboard was a mistake, and stop using it.
Make sure you have an approach to performance measurement that will help you get the right measures – now and in the future – for your organisation, before you decide the best app or system to invest in to bring your measures to life.
#5 Is the advice outdated?
Outdated advice is usually offered by vendors wanting to make a quick buck and take a free ride on what’s easy to find and duplicate.
For example, making your measures SMART is bad advice because it’s outdated. SMART is an old framework for goal setting, but SMART has long been misused for setting performance measures. At least half of the KPI advice I found in my searches recommended using SMART.
Always do some research on the frameworks or methods someone has advised you to use to develop your performance measures. Just like how journalists should fact-check their source’s information.
Selecting, implementing, and using KPIs is not a trivial exercise!
With tens of thousands of people around the world sharing their KPI struggles with me over the last 20 years, and having written over 600 articles about overcoming these struggles, how could anyone say that performance measurement is trivial?
It doesn’t have to be hard or complex, but we do need to give time and focus to a deliberate thinking approach if we are ever going to meaningfully measure what matters.
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