Dominic Gourley, Relationship Manager, Human Synergistics Australia
What gets measured get done. But it might not be getting done the way you want.
I used to work company that was very driven by Key Performance Indicators (KPIs). We had measures for every part of the process because we believed that gave us control. But when you measure like that and reward/punish the results – you might be unwittingly driving the wrong behaviour.
We had measures for every part of the process because we believed that gave us control. But when you measure like that and reward/punish the results – you might be unwittingly driving the wrong behaviour.
I was working in a process team in Customer Service. One of the (many) KPIs we had was to turn bookings within 2 hours. The point of the KPI was well-intentioned: we should deliver good service to customers by getting back to their requests within a reasonable time.
Every week, headquarters would host a call and would rank each office's performance. All the offices I supported in East China were failing to meet the 95% target (hitting around 80%)... well, all but one office. This one office was turning 99.7% of booking within two hours – it was amazing.
Every week, headquarters would heap praise on them and chastise the others. I was feeling the pressure to improve the performance of the other offices so I decided to go get some 'best practice' I could share it with the others.
So what did I find? If they got a booking they couldn't confirm within 2 hours, they would just cancel it. Once they knew they could confirm the booking, they would tell the customer to go in and make a new one. I was stunned. Customers were having to do a whole lot of extra work and encountering a lot of frustration in order for us to look good on our internal KPI. The purpose of this KPI was to deliver a good level of service to customers... but it was having completely the opposite result.
They were smashing the KPI and they were getting tons of praise for it. That is one of the really dangerous things about KPIs and Culture. KPIs and what we reward/punish in an organisation sends messages to people about how they should behave. In this case it was all about meeting the number, not the objective.
It's vital that the messages we send within our organisation go to supporting the KP'WHY' and not just rewarding and punishing the performance of the KPI.
It's vital that the messages we send within our organisation go to supporting the KP'WHY' and not just rewarding and punishing the performance of the KPI. Otherwise you might end up with great looking metrics... but terrible outcomes.
What is your experience with KPIs? Have you seen cases where the KP'WHY' has been completely missed? I'd love to hear your experiences in the comments.
About the Author:
Dominic works for Human Synergistics Australia
– a leading firm in Leadership and Culture Diagnostics and Consulting.