Over the years I’ve had many conversations with organizations around KPIs – what they are, and equally as important, why they are. When I’ve asked why people measure what they do, I have received several different answers, ranging from:
So that I can manage – many feel that if they measure, then by osmosis, they are managing
I have to hand in my reports – with no idea at to what happens with the reports
My annual raise depends on it – what gets recognized gets done!
Our company is heavily into KPIs – and when asked where do they get the KPIs – the internet!
Not sure- it was started before I got here – so obviously the person who started them is no longer with the company.
I’d like to offer a different view of why we should measure,
“The purpose of measuring is to gather relevant information to enable managers to make more informed decisions and drive continuous improvement in support of corporate goals”
If we accept that definition, then it surely follows that we need to understand the strategic objectives of the organization and then the part that our plant plays in achieving those goals which lead to deciding what the maintenance and reliability department needs to accomplish to help the plant succeed. Once we have that information, we can go about identifying those things that are KEY to us succeeding and develop PERFORMANCE measures that INDICATE if we are heading in the right direction. The measures should clearly cascade from one level to the next, with obvious connectivity.
The consequence of measuring should be change. A change in procedure, a change in knowledge, a change in expectations and most importantly a change in behavior.
The consequence of managing should be that the change is in the right direction.
Sometimes we find that we have to reconfigure data to get the information we need but as these are KEY measures they need to be easily and readily accessible to all – and, due to the cascading nature of the measures, the impact of the PERFORMANCE should be obvious to everyone in the organization.
As long as we stick to the principle of determining the measures in this fashion, we will move away from,
‘Emotional’ measures where someone’s pet peeve becomes a KPI
Generic KPIs that are published on the internet and have no relevance in our operating context
Static measures – in the global economy our organizations are faced with changes and challenges – a very dynamic environment – why wouldn’t our measures be equally dynamic.
The last point I’d like to make is that KPIs are a great way of creating the culture you want – why do I say that? – because to me, culture is nothing more than an agglomeration of behaviors and the one truism about KPIs is that they WILL drive behaviors.