Key Performance Insecurity
In a recent Exec workshop
Does this change our KPIs?
Yes
Oh, OK
What do you think they were talking about? As well as lacking clarity, there was unspoken, unaddressed anxiety in the exchange. I’ve traced multiple deep communication difficulties up, down, across and between organisations to this simple root. The acronym ‘KPI’ has been extended and repeated so far as to be functionally meaningless at best, confusing at worst.
The many meanings I've found fall into three categories:
Personal
What I must achieve to pass my performance review (’sales increase by 20%’)
A task I have been set (’The CEO has tasked me to rewrite the policy’)
Organisational
An aspirational strategic goal (’we will raise $10M’)
A quantifiable target (’retention rises to 90%’)
External
An obligation to funders or auditors (’The audit letter contains three KPIs’)
A partnership commitment (’together, we will advocate for better health information’)
But performance measures, tasks, goals, targets, obligations and commitments are not KPIs. A KPI is a measurement that tells us about progress - an indicator, not a destination. That flashing light on my car means ‘I am about to turn right’, not ‘I’m visiting my mother’.
Three questions beneath the question
Back to that exec meeting. We were re-sequencing five major strategic initiatives across two years, to report to the board how and when they would be done, and what adjustments were necessary.
When that exec asked ‘Does this change our KPIs?’, they might have been asking three different things:
Is our corporate direction now different?
Is my team’s work now different?
Is my work now different?
The difference between objective and KPI matters here. If we change ‘get to Sydney by sundown’ to ‘get to Adelaide by sundown’, we must make fundamental changes to our activity. But if the objective remains ‘get to Sydney by sundown’ and only the KPI changes - from ‘be halfway there by 12pm’ to ‘be halfway there by 3pm’ - we continue but adjust our pace. One is a change of destination. The other is a change of speed.
In this case, the answer to all three questions was ‘yes’. But that wasn’t made explicit.
The anxiety beneath the question
The third question matters most. That exec may have been asking about their own work, within a context of annual performance management. Usually, staff are set objectives for the year and judged on whether they achieved them in time and to quality. These objectives then get labelled ‘KPI’, but they aren’t.
So when someone asks ‘does this change our KPIs?’ at a workshop halfway through the year, they may really be asking:
How will I know I’m doing a great job?
Is my work so far this year not valued?
Will I be treated fairly at year end?
Will I get credit for work that’s now deemed unnecessary?
How do I lead my team through this change?
How do I assess my team at the end of the year, given this change?
These are legitimate concerns and they deserve a direct answer; something like
The HR records will be amended to show this change of direction, so that at year end the change is understood and on the record. We understand there will be a lag as you spin up this new direction, and that will be taken into account.’
This is usually never said. I think it should be.
Clarify the term - or retire it?
KPI has been stretched so far that it now obscures more than it reveals. We should say what we mean: objective, target, task, measure, obligation.
And we must be alert that a question including the acronym ‘KPI’ might be carrying ambiguity, and therefore anxiety, and address it directly. Clarity is kindness. Kindness is effectiveness.
First published in Strategy, Applied.
