Use the KPI Don’t CHange The KPI
Organisations invest a considerable amount of effort in developing their measures and KPIs, and rightly so. When designed and used correctly good KPIs and Measures have a number of clear benefits.
They can:
provide clarity on key areas of focus and performance in those areas.
be used to link and engage the workforce with an organisation’s goals.
be used for benchmarking.
highlight areas of underperformance where intervention may be required
When designed badly the ability for KPIs to deliver these benefits can be seriously undermined. This has led many organisations down a dangerous path of trying to design the perfect KPI instead of focussing on improving performance.
Assuming there is no legislative reason, before any changes are made to existing KPIs, the business should ask the following questions:
Has the KPI been in place for less than 2 year?
Can an increase in performance be delivered without changing the KPI?
Can any essential additional insight required be easily obtained from a knowledgeable person in the business without changing the KPI?
Would education in the existing KPI remove the need to change it?
If the answer to any of these questions is “yes” then any change to the existing KPI should only be made with considerable justification.
A KPI in isolation will never give a full explanation of what it is indicating. There is no such thing as a perfect KPI. KPIs and measures are there to provide an information framework to allow performance to be displayed, understood and improved. Unless existing measures and KPIs are flawed beyond use changing them only serves to delay improvement in the underlying performance like watching your house burn down as you search for the perfect smoke detector.