Wherever we work, whatever we do, we are at some level measured, evaluated and judged for our performance. In some organisations, that evaluation is clearly defined by metrics and goals.
In others it is more vague and subjective. The idea of being constantly measured by metrics may bring feelings of stress or pressure, but I’d like to argue that intelligent use of KPI can give transparency, focus and ultimately a more enjoyable and successful working environment.
The key is the intelligent use, and all too often organisations fall short in setting and using goals effectively. I’d like to share some of the common pitfalls associated with metrics and how we can avoid them.
The KPI you use need to be aligned with your overall personal and organisational goals. Start with the end result in mind and work back through the process to the beginning.
If you are in a sales role, and that goal is a signed contract, then you can set KPI throughout the sales process based on the typical conversions from a prospect to an engaged client to a detailed proposal and so on.
But what if that goal is not a signed contract, but a customer who buys from you for the next decade or more? What actions do you need to take to ensure you are setting up your sales processes not for a short-term win but a genuinely successful partnership?
Everything changes. Ask yourself if your KPI genuinely encourage the behaviours you want to see in yourself or your team, and if not, act to change them.
2: The KPI becomes the task
Some KPI are direct activities. Make a phone call. Meet a client. Close a deal. The issue with these is they are tasks in isolation, with no measure of quality or output.
And when the pressure is on, it is too easy to simply chase that short-term task with no consideration of how that activity impacts the overall result.
More effective are metrics which couple the activity with a measure of quality. Phone calls that result in a client meeting. Client meetings that lead to an RFP.
Deals with repeat business. Consider whether the goals you set encourage output as well as action.
3: Too many metrics
When you measure everything, you measure nothing. It’s tempting to pick apart every aspect of the role or the organisation and put a number on everything.
It goes without saying this leads to confusion, lack of focus and ultimately under-performance. Keep it simple and avoid the temptation to add more and more numbers to the equation. Look at your bright spots, the top performers in the organisation.
What was the leading indicator of their success? Maybe that one number is all you need.
4: Taking numbers at face value
KPI are just indicators – it’s in the name. The best performers are deeply curious about the data and the story it tells them.
Why did I underachieve? Why did I overachieve? Why did my colleague do better than I did?
Taking a PDCA approach to your data will reveal where you can improve and what you should change.
Seeing the KPI as black-and-white numbers to hit and then forget about is a recipe not only for underperformance but a great deal of stress and confusion.
These are my 4 top pointers to using KPI effectively for yourself and in your organisation. Take the time to consider carefully the metrics you track and it will set you up for success in your role and beyond.
Commercial Excellence Director
Simon is the Director of the Commercial Excellence division at en world, covering training, data analysis, process improvement and sales shared services, with the goal of allowing our consultants to deliver the highest service to our customers. Prior to this role he spent over 7 years recruiting for the IT space at en world, coming from a background in training and engineering.