“We Have The Right KPIs And Our People Know What To Do, Therefore Our Performance Should Continuously Improve” (Myth 3)

On the surface, your frontline leaders and specialists may seem to be committed and will most probably express that they understand an improvement action, as a result of a KPI, even when they don’t fully know what they are meant to be doing or why.

They may agree to undertake a task without realistically considering whether it can be done. In the end, nothing gets done. It’s not because they are lazy; it’s because they haven’t fully understood what is required of them.

People need to know the bigger picture if they are going to be truly engaged. If people are not involved, then they have no buy-in. There needs to be a system for monitoring progress in order to ensure your people can be accountable for results.

It’s also a question of priorities. Think of it this way: Supposing you had a large jar representing your week, and your task is to fit four different materials, pebbles, sand, rocks, and water, into the jar. These represent your projects and tasks, categorised by importance and urgency. What order do you put everything into the jar? How do you ensure that everything fits in your week? This is what your people need to know.

CASE STUDY: Missed Opportunities

A government office had a KPI dashboard that had been in place for nine years. The dashboard had never been changed. When the KPIs were created nine years previously, they were relevant to the needs and requirements of the state and federal governments at that time.

The dashboard was reported to senior management and elected officials on a monthly basis, as a matter of routine. Actions were generated from the senior management team but somehow failed to cascade down to the next three levels of people, all of whom were closer to the process.

There was a good measuring and reporting system, and an adequate “actions routine” set up at the senior level. However, these systems did not exist in the divisions, departments, and teams to which they applied.

KPIs were defined at the highest level: expenditure versus budget, community experience and service levels, staff retention, capital expenditure completion, health and safety; but KPIs at the two or three lower levels in the organisation were not defined.

The high-level KPIs were too difficult for most employees at lower levels to measure themselves against, but they were still expected to follow the high-level KPIs defined on the dashboard.

As there was a top-down “management by KPIs,” performance was expected to improve across all units, actions were meant to be implemented by team members, and engagement from employees was expected to be high. However, progress was very slow.

Over time, more than half of the senior leaders have been replaced, and now come from a corporate background.

The new leaders have introduced a more succinct KPI dashboard: a KPI tree was developed which defined and connected how the “lowest” levels in the organisation could make a difference to the overall organisation goals.

A customer service operator, for example, now has a KPI that they are measured against, which is community survey contacts, so they can clearly see and understand that the more phone calls they make, the better.

Each division, unit and team throughout the organisation now has a weekly routine of visually monitoring and reporting their relevant KPIs. They also have a strong focus on leading indicators, which comprise about half of their total KPIs.

Going back to the example of the customer service operator and the community survey contacts, the higher the number achieved, the higher the likelihood that there has been a better customer experience, as the customer service operator would be more likely to know the specific needs and requirements of their customer. This then links to the organisation’s KPI related to customer experience and service levels.

Through the weekly stand-up routine, a very visual list of all actions is kept, which ensures accountability and ownership is delegated and spread across the team.

KEY MESSAGES

  • Focussing on the right KPIs, with the right people, in the right area, and at the right time will drive your results.
  • By focussing on both lag and lead indicators, depending on your role in the organisation, you can create, assign, and agree the right actions, set a routine in managing all actions and ensure accountability from all action owners, and manage your priorities and time well.
  • You need to be able to fit all your important tasks into your week—”the jar.” You must always put in the big rocks first, then the pebbles, then the sand, and the water goes in last.