MODERN MANAGEMENT
The common traps to avoid
in designing performance
measures and KPIs
By Stacey Barr
W
hen we try to observe our
business performance
by walking around, our
observation is limited by how far
our eye can see, the snapshot
of time we are there, what our
eye happens to notice, what our
ear happens to listen to, what is
in plain sight. We miss what is
happening somewhere else, what
we don’t happen to notice, what
people are not saying, what isn’t
in plain sight. So in assessing
business performance, our past
experience and our intuition are not
illuminating lights. They are filters.
62 ModernBusiness
July 2016
But when we use performance
measures, or KPIs, they don’t
have these filters. They give us
a more objective picture of how
our business is really performing.
But the measures need to be
well-designed. And most are not,
because of a few common traps we
inadvertently fall into.
Trap #1: Not recognising an
immeasurable goal.
An immeasurable goal is an
outcome or result that we want
to measure, but it’s worded so
broadly or vaguely that we really
struggle to anchor it down in
the tangible world in which it’s
supposed to happen. We won’t
succeed to measure a goal until
we’ve made sure it’s measurable.
To be measurable, the words
that articulate it must make it
observable.
Trap #2: Letting the weasel in.
When we produce a list of draft
performance measures for our
goal, it is very easy to use weasel
words to describe those measures.
Efficiency Ratio. Staff Productivity.
Employee Engagement. Workforce