My thoughts on how KPIs should be applied inside an organisation from a leadership perspective. I believe that when it comes to leadership, theoretically ultimate models can be thrown overboard. Focus on what people care about and are able to keep in mind. And repeat.
9. “Whilst Performance Management
was aimed at altering policing
behaviour with a view to
increasing efficiency […] police
officers were employing unethical
practices designed to meet
targets”
Performance management, gaming and
police practice, Patrick Rodger, 2009
10. Closing rate
Sales budgets
Reducing data registered in CRM system
(prospects kept outside system until likely
to close to maximize closing rate)
Avoiding competitive situations (raising the
bar on when to send in tenders/take sales
calls)
Discounted (too low) offers to customers
towards end of month/quarter/year to fill
quota
Increased spending (if costs below budget)
towards end of period to avoid a reduced
budget next year
Cost vs budget
Customer satisfaction
A few random KPIs…
…and some gaming
examples
Manipulating answers (throwing away low
point questionnaires or ”forgetting” to give
them to certain customers)
Manipulating customers (”if you give me
anything less than full score they will think
you hated me”)
11. The truth is that every
KPI is a double edged
sword.
The good news is that
gaming is easy to spot.
If you dare to look for it.
12. #3. Look for a clear
connection between
effort and outcome
http://www.flickr.com/photos/timg_vancouver/756492323/
14. Try to minimize ”noise”, i.e.
factors outside the control
of those being measured.
15. #4 Focus on a
SMALL number
of numbers
http://www.styrbord.com
16. For the numbers to do
their part, people must
think about them. Often.
To think about them, they
must be able to
remember them.
17. ”We can store only 3 to 9
chunks of visual
information at a time in
short term memory”
Information Dashboard Design, Stephen
Few, 2006
Don’t expect to be
able to occupy all
of these seats. Go
for max 3!
19. In practice - some do’s
and dont’s…
Good ideas…
Positive angle (net promoter
score rather than number of
complaints)
Development focused
(progression, % of target)
Action oriented (focus areas
rather than problem areas)
Relative (% change since
yesterday)
Not so good ideas…
Subjective labels
(“unsatisfactory”, “inadequate”,
etc.)
Traffic light metaphors (avoid
yellow lights, things on track are
green and things off track are
red)
KPIs that signals acceptance of
what should not be (“budget
deficit”)
20. Note! Positive wording
does NOT mean that
problems should be swept
under the rug.
Problems will arise and
should be recognized
when they do.
21. Rationalize why a KPI is off-
target once and that KPIs is
forever a dead duck
23. “Students who thought they’d
receive rapid feedback
performed 22 percentile ranks
higher than students who
thought they wouldn’t
receive feedback for several
days...”
David DiSalvo (http://neuronarrative.wordpress.com) on an
article by Kettle, K., & Haubl, G. (2010). Motivation
by Anticipation: Expecting Rapid Feedback
Enhances Performance Psychological Science
25. So. To summarize...
#1 Look for numbers with a bit of
soul
#2 Beware of gaming
#3 Look for a clear connection
between effort and outcome
#4 Focus on a small number of
numbers (3)
#5 Use Positive Wording and
Visuals (but don’t rationalize)
#6 Update and Communicate your
KPIs all the time, everywhere
27. Always focus on what
matters the most!
Feedback?
Getting in touch?
My 6 (cheeky) thoughts on business
intelligence?
http://www.slideshare.net/KristofferFredriksso/business-intelligence-6-cheeky-thoughts