The 3 Signs To Say Goodbye to a KPI
by Stacey Barr |Hoarding is a disorder where people have incredible difficulty parting with possessions, or an incredible compulsion to acquire more possessions. They, and everyone close to them, drown in clutter. Are you a hoarder… of KPIs?
If you have too many measures or KPIs, and even a mild fear of letting them go in case you need them one day, then you might also be drowning in clutter: a clutter of data.
The problem with having too many KPIs is that you can’t really function with them all. It’s impossible to monitor them all, and too hard to know which are the priorities. You’re paralysed. You can’t make decisions.
Having too many KPIs is as bad as having none. It’s time to clean house. Here are three signs you can use to decide which KPIs to say goodbye to:
Sign #1: The KPI has reached its target and is staying there.
We measure specific results with KPIs because we want to improve those results. Now, while continuous improvement is certainly the philosophy that underpins good performance measurement, not everything should be improved forever.
If you have a KPI that has reached its target, and is now at a level of performance that isn’t a priority to keep improving (because there are other higher priorities to improve), it’s time to let it go. Otherwise, you’ll be wasting resources on gold plating that’s not needed.
Sign #2: Strategy has changed and the KPI no longer aligns.
If you do performance measurement well, then your KPIs will have a direct alignment to your strategic and operational goals. Some of those strategic or operational goals will change, as your organisation and its environment changes. So some of your KPIs will naturally change too.
Don’t be afraid to say goodbye to a KPI if it was designed for a goal that is no longer important. If you don’t, you’ll waste precious attention on results that don’t matter enough anymore.
Sign #3: The KPI turns out not to be as useful as expected.
We can master performance measurement but I don’t think we can perfect it. Consequently, we might design a KPI that sounded like a brilliant idea at the time, but later when we start using it, we realise it doesn’t have the power we hoped for.
Let that KPI go, so that it doesn’t mislead people. And if you need to, replace it with one that’s more useful.
What does saying “Goodbye, KPI” really mean?
I’m a believer in keeping historic data because it’s cheap enough to do it these days, and it can be a treasure trove for analysis in the future. Data doesn’t really take up space, like a KPI does in a performance report.
So, archive your KPIs, by retaining documentation of their definitions. You can do this in your corporate performance measure dictionary, marking the KPI as ‘archived’. Then take them out of your performance reports, and stop extracting the data to compute them.
TAKE ACTION:
Got KPI clutter? List your KPIs in a spreadsheet, create a column for each of the 3 signs, and start ticking off the KPIs that are candidates for letting go.
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Director: Stacey Barr
Hi Stacey,
Regarding Sign #1: If you eliminate this measure, how will you know if performance slips below target in the future? Won’t removing it increase the likelihood of this happening?
Thank you,
Elliot
Elliot, that’s a wise question. If you have a measure that has truly reached it’s target – and is proving to be stable at this new level of performance without constant trying – then it’s very unlikely it will fall below target if the solution you put in place becomes integrated into business as usual.
Sure, you might keep gathering the data, if it’s easy to do so, and have the ability to check the measure annually, say, if it is still a very mission-critical measure. Then you only surface the measure again in your routine performance reporting if it shifts away from target. But it takes a back seat to measures that are also very important AND have not yet reached target. The more mission critical the measure is – and the more sensitive it is to change – the more frequently you might check on it.
But you can imagine how, if we kept every measure we ever set a target for in our routine reporting, we’d have too many things to keep track of.
Elliot, I’d add that your second question, “Won’t removing it increase the likelihood of this happening?” implies that the measure is not being used to provide an indicator of performance but instead as a means of managing behavior. “If we don’t keep showing them the score, they’ll stop playing” – I’d say that’s a potential problem in itself. If you’re chasing a value (number) they’re not focusing on the goal or performance which the KPI is supposed to be measuring.
Hi Stacey,
Regarding sign #1: how about the mission critical KPIs? The ones that you do not so much need to improve, but you do need to know immediately if something goes wrong. For instance uptime of ICT systems or the number of items per status in your sales funnel. How do you deal with those and how do you decide whether a KPI should be in this category?
The short answer I have for you Patrick is that it’s a risk decision. How risky is it to take your eye off a high-performing measure? A little like the thoughts I shared with Elliot, below, depending on how big that risk is, the more frequently you might ‘check in’ on the measure.
I’d also add that in the case of the “mission critical KPIs” that they don’t have a “target” you’re hoping to reach and maintain…
Hi Stacey,
i agree with your sentiments – my outlook being aclaasic example of how hard it is to let things go (I have archived e-mails from 10 years ago).
The one thing I would add is that in the public service context we tend to also use and report measures for the purposes of assurance both to political and public audiences although this can lead to individuals choosing comfort measures over meaningful ones with the inherent dangers of the halo effect.
i think that there is a way though that you can use both forms of measurement i.e. for improvement and for assurance as long as you are clear about the purpose.
As you have said previously the real killer is using measures / data because they exist rather than as a catalyst for action on those measurable ares of operations that you wish to improve – and that’s where the difficult bit of differentiating between causation and correlation comes in.
Have a good day and keep those blogs coming,
Mike
Oh dear, Mike: I do that with emails too! I have no idea why… Maybe I’m a data hoarder :-\
I see that a lot, the confusion between performance measures for improvement versus measures for assurance. The latter I frame as a product for a stakeholder that just so happens to be measures. But too many people lump these in with ‘performance measures’. Perhaps one day the two sets of measures should be the same, but not until there is greater maturity in being transparent without fear of blame (the agency) or the need to blame (the stakeholders).
I’d add another. If the KPI is defined using a root question (the purpose for creating that measure) – when that root question is either answered or no longer a query for your organization, chances are you can remove the measure. Say one of your questions was if you are serving the customer fast enough – and your process improvement removed you from the workflow so that not only aren’t you a factor in the speed but you aren’t even in the process…you can remove the measure.