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The Institute Way Blog

Tuesday, November 25, 2014

The 3 Signs To Say Goodbye to a KPI

By: Stacey Barr

Hoarding is a disorder where people have incredible difficulty parting with possessions, or an incredible compulsion to acquire more possessions. They, and everyone close to them, drown in clutter. Are you a hoarder… of KPIs?

If you have too many measures or KPIs, and even a mild fear of letting them go in case you need them one day, then you might also be drowning in clutter: a clutter of data.

The problem with having too many KPIs is that you can’t really function with them all. It’s impossible to monitor them all, and too hard to know which are the priorities. You’re paralysed. You can’t make decisions.

Having too many KPIs is as bad as having none. It’s time to clean house. Here are three signs you can use to decide which KPIs to say goodbye to:

Sign #1: The KPI has reached its target and is staying there.

We measure specific results with KPIs because we want to improve those results. Now, while continuous improvement is certainly the philosophy that underpins good performance measurement, not everything should be improved forever.

If you have a KPI that has reached its target, and is now at a level of performance that isn’t a priority to keep improving (because there are other higher priorities to improve), it’s time to let it go. Otherwise, you’ll be wasting resources on gold plating that’s not needed.

Sign #2: Strategy has changed and the KPI no longer aligns.

If you do performance measurement well, then your KPIs will have a direct alignment to your strategic and operational goals. Some of those strategic or operational goals will change, as your organisation and its environment changes. So some of your KPIs will naturally change too.

Don’t be afraid to say goodbye to a KPI if it was designed for a goal that is no longer important. If you don’t, you’ll waste precious attention on results that don’t matter enough anymore.

Sign #3: The KPI turns out not to be as useful as expected.

We can master performance measurement but I don’t think we can perfect it. Consequently, we might design a KPI that sounded like a brilliant idea at the time, but later when we start using it, we realise it doesn’t have the power we hoped for.

Let that KPI go, so that it doesn’t mislead people. And if you need to, replace it with one that’s more useful.

What does saying “Goodbye, KPI” really mean?

I’m a believer in keeping historic data because it’s cheap enough to do it these days, and it can be a treasure trove for analysis in the future. Data doesn’t really take up space, like a KPI does in a performance report.

So, archive your KPIs, by retaining documentation of their definitions. You can do this in your corporate performance measure dictionary, marking the KPI as ‘archived’. Then take them out of your performance reports, and stop extracting the data to compute them.

Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Learn about the bad habits that cause these struggles, and how to stop them, by taking Stacey’s free online course “The 10 Secrets to KPI Success” at www.staceybarr.com/the10secretstokpisuccess.
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Author: Stacey Barr
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Categories: BlogNumber of views: 420

Tags: performance management KPI / performance measurement

Stacey Barr

Stacey BarrStacey Barr

Stacey Barr is a specialist in organizational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures.

Other posts by Stacey Barr

Contact author Full biography

Full biography

Stacey Barr is a specialist in organizational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Since the mid 1990′s Stacey has been developing and improving this methodology into the practical approach that thousands of people around the world are using today. Her long-term vision is that deliberate performance measurement, based on a methodology like PuMP, is as much a part of normal business management as financial management is.

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