Key Performance Indicators are meant to achieve one thing, sharpen our focus. They help translate our strategies into focused execution. The KPIs help us understand the things that are most important in achieving our goals. They serve to align the organization around these critical goals and activities.
They give everyone involved in executing the strategies a common focus around the things that matter most.
But we’ve become enamored with KPIs, every program, every part of the organization, every project has it’s own set of KPIs. Each role within the organization has their KPIs. Where they were intended to drive clarity, they now drive confusion and lack of focus. We have metrics, measuring everything we do—some overlapping, some contradicting each other.
Instead of focusing on the things that are most important, they overwhelm. People don’t know what matters most, because everything matters. Instead, people start gaming the metrics, choosing those that are easiest to optimize. It’s easy to make outbound activity goal, even if achieving those don’t drive high impact meetings. It’s easy to make pipeline coverage goals, when we stop focusing on pipeline quality.
Clarity turns in to confusion, focus becomes fragmentation, alignment shifts to ambiguity.
And ultimately, people are overwhelmed and metrics cease to matter. They tend to keep their heads down, just doing what they can, but without any real focus or direction.
We can learn a lot about metrics from physics. The Heisenberg Uncertainty principle tells us the mere act of measuring impacts what we are measuring–as a result we never get a completely accurate set of measures. For example, if we try to accurately measure the position of a sub atomic particle, we impact its momentum.
We see it at play in selling, when we measure call volume, call quality declines. When we measure time to resolution, real resolution is often sacrificed. When we measure pipeline coverage, pipeline quality may plummet.
Sometimes, I think our obsession with metrics is just laziness. We don’t take the time to really understand what matters, so it’s far easier to measure everything.
What do we do? How do we figure this out? How many metrics are the “right” number?
Some thoughts:
- At an organizational level, 3-5 KPIs are probably sufficient to understand performance. These need to be mapped to the strategic priorities (which raises the question, do we have too many strategic priorities. I like the concept introduced in OKRs, which tend to focus on the top three key objectives and the key results expected.
- At a team level, probably 3-5 KPIs. We should be able to connect these to our contributions to the organizational KPIs.
- At an individual level, again, probably 3-5 KPIs. They may be the individual versions of the team KPIs, but the need to be tied directly to those KPIs.
Our performance dashboards become simpler. At each level, we should no them, without having to refer to endless reports. When we start missing those, we can drill down to understand what’s causing the problem, and focus on fixing them.
KPIs are not the problem. They are critical to understanding performance. They become more impactful when we are forced to make hard choices, when we are forced to figure out what really matters.
Afterword: Here is the AI generated discussion of this post. It’s outstanding, enjoy!
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