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.

1. NUMBERS
THAT COUNT
6 (cheeky) thoughts on KPIs
as a management tool

2. Ever felt that your people
did not care about those
numbers of yours?

3. If so, you’re missing out
on a powerful
leadership tool!

4. “Leadership is the art of
getting someone else to
do something you want
done because he wants
to do it”.
General Dwight Eisenhower

5. Here are my 6 thoughts on
KPIs as a leadership tool
http://www.flickr.com/photos/boklm/486677337/sizes/m/in/photostream/

6. http://www.flickr.com/photos/foradoeixo/8239441790/in/photostream/

7. Consider…
Customer
LifeTime
Value
Net
Promoter
Score
A pile of cash A human being

8. #2 Beware of

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/

13. Consider…
Sales
Market
share
Going slow Leading the field

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!

18. #5 Use Positive Wording
and Visuals

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

22. #6. Update and
Communicate your KPIs.
All the time. Everywhere.

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

24. Continous feedback
means completing feed
back loops all the time
instead of once a week,
once a month or once a
quarter…

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

26. Or simpler put…

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