What is a KPI Owner Accountable For?by Stacey Barr |
If you think performance will improve by holding people accountable for hitting targets, you’re wrong.
Performance measures and accountability have an uncomfortable relationship. People don’t like to own measures or KPIs because of the fear of what they’ll be held accountable for.
But can performance ever be expected to improve if no-one is accountable?
Why don’t people want to be accountable for performance?
Traditionally, a measure’s owner is held accountable for whether or not performance hits target:
- If the company profit doesn’t meet target, the Board holds the CEO accountable.
- If the percentage of customer problems that are solved in the first call is too low, the Customer Service Manager is held accountable.
- If the percentage of help desk calls that are answered within three rings is too low, the Help Desk operator is held accountable.
We know from experience the kind of behaviour this type of accountability drives. It’s often called ‘gaming’, where quick and easy actions are taken to show quick progress in the KPI:
- The CEO will cut costs across the board, inspiring everyone to work smarter.
- The Customer Service Manager will change the definition of “solved” to get a better first-call resolution rate.
- The Help Desk operator will rush through the call she’s on to answer more within three rings.
And what happens in all cases is the measure might improve in the short term, but there are consequences, such as long term performance worsening and other measures being sabotaged:
- Cutting costs means corners are cut and quality goes down, along with customer satisfaction and brand loyalty.
- Changing the definition of ‘solved’ means problems come back into the pipeline again and cause even bigger bottlenecks.
- Rushing customers to end calls sooner makes them frustrated and dissatisfied, likely to tell their friends of the bad experience.
When accountability is explicitly or implicitly defined as hitting targets, people feel threatened and judged. They know this is unfair, and naturally need to defend themselves. They will do whatever it takes to hit the target, as a higher priority over fundamental performance improvement.
Accountability itself isn’t the problem.
The problem is what we hold people accountable for. Particularly when it comes to performance measures. Holding a person accountable for hitting a target assumes that person has full control over everything that is needed to hit that target. And that’s true almost never.
The ability for a target to be hit is the product of many things beyond a single person’s actions:
- the design of business processes and systems
- the requirement to comply with regulations or policies
- the availability of (or competition for) limited resources, like time and money and other people
- the level of skill and knowledge people have, or are able to get access to
- competitive, political and legislative forces in the organisation’s business environment
Everyone has to work within the constraints of the business system and its environment. W. Edwards Deming had much to say about this, pointing to the overwhelming observation that most of the constraints on performance are in the business’s processes, not the people.
It’s unfair to hold any individual person accountable for a performance result that is constrained by the business system. Accountability needs to be framed in a more constructive way.
We need a constructive definition of accountability for performance measures.
A constructive definition of accountability drives the right behaviour. The behaviour is right when it results in a net positive change for the organisation as a whole. A net positive change is when targeted areas of performance improve, with no unintended reduction in other areas of performance.
A constructive definition of accountability has three parts to it:
- Monitoring the important results with meaningful performance measures
- Interpreting the performance measures to identify performance gaps
- Initiating action, if and when action is needed
Part 1: Monitoring the important results with meaningful performance measures
When someone is responsible for a specific business result, like problem resolution, or accuracy of advice, or eliminating rework, they can be accountable for routinely monitoring that result with a performance measure.
When that same someone is involved in designing the performance measure they are to be accountable for, their ownership of it will make Part 1 of accountability very easy. They will believe in the measure, and why it matters.
This drives the behaviour of people focusing on the results that matter.
Part 2: Interpreting the performance measures to identify performance gaps
When someone is responsible for monitoring a performance measure, they can be accountable for interpreting what that measure is telling them about the business result it measures.
And when they are also involved in setting improvement targets for the measure, the gaps between current performance and the target can be motivational for them.
This drives the behaviour of people seeking feedback about how the results are actually tracking.
Part 3: Initiating action, if and when action is needed
When someone is responsible for interpreting a performance measure, they can be accountable for deciding what kind of action is needed, if at all.
If they are also involved in analysing the causes of their measure’s performance gap, and choosing the actions to fix those causes, their commitment to continuous improvement keeps getting stronger.
This drives the behaviour of people to work on their processes, and not just in them.
If we want performance to truly improve overall and over the longer term, we need to carefully define what KPI accountability means. Leaving it undefined, or implicitly defined as hitting targets, will drive behaviour to hit targets, not improve performance.
Instead, if we define accountability as monitoring, interpreting and acting on what our KPIs or performance measures tell us, then it will drive the behaviour we want: continuous performance improvement.
What does accountability for KPIs or performance measures actually mean in your organisation? How do people feel about it? What behaviours does it drive? [tweet this]
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