Why most measures don’t improve performance during strategy execution

Strategy execution can too often feel like one “knee jerk reaction” after another; an almost involuntary response where we react in a readily predictable way. We believe we are driving change simply because we have acted, or simply because we have a measure. But could your approach to KPIs be sabotaging your strategy execution?

Here are seven poor habits that could be the culprits to your organization’s lack of performance improvement.

Culprit #1: Using measures for judging rather than learning

We forget sometimes that measures are used by humans and most humans hate “being measured”. We feel that measures judge us as good or bad, right or wrong.  If we don’t take care of this social side of measurement and shift how we use our measures, people will miss powerful opportunities to use KPIs for learning about your organization’s performance and how to improve it.

Culprit #2: Choosing actions before measures

Action is fundamentally important to closing organizational performance gaps; but choosing initiatives and projects before we have a measure, is like getting on a plane before you have a destination – you may not like where you end up.  A meaningful measure linked to a clear statement of what you want to achieve is where you need to start your strategy execution.

Culprit #3: Setting targets before you have a measure

Frameworks like SMART (Specific, Measurable, Achievable, Relevant and Timebound) are not “wrong”, but they too often drive the wrong behaviour. People believe that when they formulate a goal, they also must set a target to be SMART.  They select a goal, take an action, set a target, then (often much later) select a measure. Huh? It completely lacks logic, and the unintended consequences of inserting guesstimate targets are profound. 

Culprit #4: Analysis and insights from data are wrong, wrong, wrong!

It is ridiculously common how often leaders and teams are assessing performance through the lens of two points of data (eg. this month compared to last month, or same time last year).  Unfortunately, two points of data do not produce trustworthy insights, causing your decision-making to produce loads of wasted money and effort, sometimes even making performance decline. Whatever made last month something worth comparing to?  Leaders, it is time to stop demanding dashboards and start requesting insights you can trust from statistically sound visualizations that truly answer the question “What is performance doing?”

Culprit #5: Mistaking excuses for reasons why performance is not improving

It is easy to blame the economy, regulations, the market, lack of funding, and all things external as the reasons why performance isn’t improving.  But these are deflections that keep us from focusing on and measuring what we can control and influence. If we can influence it, we change and improve it. Innovation is an inside job!

Culprit #6: Assuming people are the main cause of performance gaps

People are important but looking at their performance out of context of the process can be damaging to workplace morale and improvement.  They could be great people stuck in a bad process and telling them to work harder or giving more incentives will not fix the problem. Try instead to apply process thinking that improves process capability by reducing rework, removing redundancy, preventing errors, and innovating through automation.

Culprit #7: No routine forum to discuss performance and apply statistical thinking

Simply having measures is not enough to improve performance; they must be used for decision-making. Yet, too often, there are no formal review approaches that put measures on the agenda and leaders miss the opportunity to discuss these critical questions: What is performance doing? Why is it doing that? What are we going to do about it?  Most reports lack this purpose and instead confuse, overwhelm, and mislead decision-makers.

How we design and use our KPIs has a great bearing on our success in improving our organizational performance. Great measures put our attention on the right things and encourage us down the path of cause analysis and testing the impact of our proposed solutions. But great measures don’t just happen. Sometimes we must slow down to speed up.

The PuMP® Performance Measure Blueprint was created by Australia’s performance measure specialist Stacey Barr. Louise Watson of Adura Strategy is North America’s Official Partner and Licensed PuMP® Blueprint consultant.