The KPI industry
What is not defined cannot be measured. What is not measured cannot be improved
So…pretty clear isn’t it? KPIs is a huge thing when trying to track evolution of whatever needs to be improved. Something we believe as a “mantra” and probably it’s true, but sometimes, when applied in large organisations, can have unexpected consequences.
Defining the “right” KPIs
The statement around the KPI, the metrics and the objectives, if not defined carefully, could result in an output very far from the goal of the KPI itself.
Here is a real example. In an effort to increase developer productivity in a software shop, the CTO of a large multinational retailer decided to measure, AND INCENTIVISE, a KPI called “number of features developed”. Sounds decent right? Who wouldn’t want to improve this metric?
As a result “productivity” skyrocketed in a few months in order to comply with the bosses wishes. Lots of code pouring from developer machines, as fast as possible to deliver on the KPI but also on the millions of features business gurus have thought “carefully” before writing two lines on a post-in note. But, like any action there is a reaction, production incidents increased in the same violent way. Agility without enforcing the necessary code quality, resulted in a dramatic reliability and security period for the company… you get the idea.
Be careful with the KPI definition…people will achieve it
False sensation of control
Another relevant point around KPIs is that provide a false sensation of control, especially to the top management. Having tons of KPIs it’s usually what managers do when they don’t understand the process under their responsibility. We have been taught since high-school that measuring things is good, but how many times about the importance of spending time with the teams, walking the halls, talking to people an actually making your own mind about how things are going?
These managers believe that having hundreds of KPIs will result in a “I have everything under control” state of mind. KPIs should be the result of a deep understanding of the manager responsibility, not the other way around. Think about how many hours a pilot needs to learn about his plane before trusting the instruments…
The mindset should be:
1.- Understand my scope of responsibility, mission and goals
2.- Full understanding of the processes that support those goals
3.- Identify the “things that need to happen” (a.k.a. what good looks like)
4.- Create KPIs
5.- Measure, repeat, adapt
Usually number 2 and 3 do not happen, especially in managers that are assuming roles that don’t fit their previous expertise and think that creating KPIs would give them the appropriate control within their function.
A racing car needs a good engine but also… breaks
The KPIs industry
Another undesired result of obsessing about KPIs is the army of people needed in order to track them at scale. Dashboards with hundreds of numbers need to be gathered and processed, rarely KPIs are as easy as going to a system and reading some number, sometimes they require dedicated people, talking to other people, making calculations, interpretations, it’s consuming.
So…next step is to create an organisational structure with the only objective to do so. Of course this team doesn’t even understand what the KPI shows or the behaviour is trying to introduce. Their only goal is to chase people doing actual work to fill some nice coloured dashboards and fill their bosses with the sensation of control. This is also why PMOs have such a bad reputation, with hordes of consultants chasing people without actually being involved in the delivery and the understanding of the root causes for success.
Ham and eggs, the pig commits while the chicken gets “involved”
We have seen crazy examples of organisations where doing this at scale while also dealing with committees, audits, offsites, team meetings, traveling, coffee chats and more, ends up becoming the ACTUAL JOB. What percentage of your job are those?
End result… after months of frustration with this culture human nature starts calling and you start thinking… how can I hack this KPI?
If you can’t defeat the enemy, join him… or simply get another job
What I have seen along the years is that most KPIs are defined just to comply with the Quality Certification bodies, in other words, something to cover the minimum required aspect tied to certification and surveillance audits. What I mean is that a real KPI that really works is not very often defined, this creating sterile work in many instances. This has to do with the lack of knowledge about processes, as the article indicates and also with the difficulty in defining a really good KPI, which may be complicated if the process is complicated as well.