KPIs: Getting the right behaviour from all of your people
Information for the front line is intended to produce action to improve processes. But this improvement will not happen unless the right reviewing and problem solving activity is established and run well formally and regularly.
In an earlier article on ‘Key Performance Indicators…Questions and Answers’ I listed a number of common problems experienced during the implementation of KPIs. These problems can easily kill the implementation and proper use of KPIs in an organisation which lacks strong commitment. The earlier articles dealt with ‘picking the right KPIs’and ‘getting the information out’. This one deals with ‘getting the right behaviours’. This is the most difficult area because it involves people.
There is genuinely remarkable potential for business performance improvement in KPIs if you apply them in a positive constructive manner. Problems can be solved, processes can be improved, people can be motivated and united in a team and competitive advantage can be built by a really good philosophy towards KPIs. This article gives a list of ten of the most important guidelines to success with behaviours and attitudes.
First, though, what are the most common problems in practice? When we fail, why do we fail to implement? These are the most common problems and they come up virtually every time.
- Management is focused too much on operations, doing the job and improving piecemeal and reactively instead of setting the time aside for a formal process.
- There is no process for learning how to do better, no Plan Do Check Act cycle. This is an attitude thing.
- There is no rhythm in the culture i.e. meetings are irregular or even non-existent. This reduces the potential for successful actions.
- They do not understand how overwhelmingly beneficial KPIs are. In fact there is a dark suspicion of what are viewed as personal yardsticks to be used by top management in a negative manner to appraise managers.
Here are my top ten guidelines on philosophy and behaviour
Involve front line people in all stages from mapping processes to primary recording of performance, reviewing, setting targets, and then generation and implementation of improvement actions. The trick is to do this efficiently, I am not advocating hours and hours in meetings with lots of people.
2. Understand the processes in the business
Map the key ones simply and with a full overview using the people in the process. This creates the potential for teamwork and ‘all one team’ breaking down departmental barriers.
Don’t think of Key Performance Indicators as primarily a means of measuring individuals’ performance but as a way of identifying potential for business improvement, i.e. completely positive, looking at what’s wrong not who’s wrong. In truth certain measures of performance and of errors and waste may point to people who have not been doing their job well, but at that time you must approach this with the question, ‘how can we make sure this is done better?’ If front line people aren’t working right it is management’s responsibility to support and train them. In turn managers often feel threatened by impending KPIs in certain circumstances and it is true that weaknesses can be uncovered during implementation. A manager who does not plan, does not have the overview and does not know how well his part of the process is performing can usually be described as ‘short of the mark’ but the KPI and review process is THE best model to help a manager to succeed. In an organisation where there are differing standards of management, it is essential to endorse and support the best methods and to make it clear to underperforming managers that they must do all of the right things. You have to give them permission to get their heads out of the machinery and do their job as a manager, to see the wood for the trees. In this way KPIs will improve the weaker managers’ performance as individuals.
4. KPIs as motivation
People are turned on by results. We all (deep inside) get a real kick out of being part of a winning tem, and the right KPIs are the best way of demonstrating to ourselves that we are winning, gaining ground, solving problems and identifying further potential. Make them known to all and recognize genuine improvements by giving a pat on the back. Good people expect to be told the truth, the upside and the downside, so there is no negative in this. Psychologists will say that we need to focus all of our energy on positive actions and get control of things. For that reason this philosophy has to include the people in the front line. It is often they who we need to do things differently.
5. Plan, Do, Check Act
Don’t leave this methodology to chance. Create a definite regular process, so that improvement happens all of the time and not just when the wheel comes off. The process is Plan > Do > Check > Act. This means that we plan to do the (operational day’s work) job, we do it, we measure how well it has been done and if necessary we tweak the process until it operates acceptably for us. Thousands of business processes miss out the Check > Act. This means they are not learning, not locked into improvement and often not even recognizing potential for improvement until it hits them in the face as a problem. You could say this is ‘Plan > Do > Do > Do > Do …. and if the wheel comes off Firefight!’ Not leaving things to chance means having regular reviews of KPIs with the front line people and looking for improvement actions. It is vital therefore to produce figures which identify potential.
6. Two types of KPIs
Show the results of the process but also what will make it work better. Point numbers (1) and (2) above refer to simple overview mapping of processes avoiding too much detail. When people can see a whole process on a (large) piece of paper, they can get their minds to work and can see the need to measure not only outputs but cause/effect relationships. It is vital to measure not only the results but the dozens of factors and thousands of measures behind the results.
7. Look for the leaks
Measurement of errors and waste of all kinds are particularly useful, because the ‘avoidables’ can usually be described as shooting ourselves in the foot, either by poor procedures or lack of care and attention. Really they should be easily corrected and therefore represent an easy win.
Recognise the need for two different types of meeting to make this process work. To keep your eye on KPIs with the people in the process and to agree actions and follow up on actions agreed or introduced at previous meetings, you need a regular review meeting, which I would describe as an Action Review Meeting. This must be weekly (probably) and therefore must be very slick and short. It focuses on the KPIs and actions but does not try to solve problems other than ones which take two minutes. This will keep it short, will allow time and opportunity for pats on the back, and will give the sensation of improvement and positive focus. It will also give you a good chance to fight the worst sickness of the lot which is not doing the actions we agreed at the previous meeting. You cannot solve more complex and important problems at this meeting. This is because you are not properly prepared to do so, do not have the right people at the meeting and you will lengthen the meeting. The second type of meeting is a Problem Solving Meeting (although, remember you don’t have to have a problem to have such a meeting, it could be an opportunity meeting). This picks up those problems and solves them one at a time. You should involve the right people, give a week’s notice, and focus the right information on the issue, then stick with it for one, two three or more meetings until you have got and tested a solution. A problem solving meeting would last typically for three hours and usually involve some type of mapping or analysis process. Again facts and figures are essential at some stage during problem solving. The most important point here is to get the problems solved in the correct priorities. A tip…. the most important and rewarding problem solving is that which relates to a process crossing several functions of the business. These processes are the hardest ones to solve because of politics, but often have a fundamental effect on business performance.
9. Train managers
Train them to run one or both of these two types of meetings, to encourage, to understand figures, to lead people, to innovate and create solutions and to understand and promote the philosophy of ‘working constantly on the gap between what is and what could be’.
10. Set targets
When you start to identify and measure and to see the errors and waste or the differing levels of performance achieved by different departments or people, you will have a much clearer picture of where the scope is for improvement. Targets set at this time will put the seal on the need to be proactive and improve continuously. They create reasons for innovation and change in practice. Remember a target without a method is a nonsense, so you do need to know the ‘model’ of the process in question, so that you can see where the improvements can be made. If the particular ‘one point’ problem has arisen from the review of KPIs at the Action review Meeting, it follows that you will already have the commitment of key people and good knowledge of the problem and its cause and importance.
These are my top ten points on the subject of behaviours. On a very positive note, I believe that if top management understands the philosophy and its benefits well and is committed, they will not fail to implement. It is well worth taking time to understand KPIs.