BY JAY PERRY
There is a great deal of emphasis on key performance indicators (KPIs) these days, and with good reason. These numbers tell a story—but that’s where they can become very confusing and start us down a road that can take us away from our goals. Before we get any farther into this conversation, I want to make clear I am a big believer in numbers, just not in the way many seem to approach them.
What has been done to great detriment to efficiency and morale is to focus on specifics to try to influence the numbers—to improve a certain metrics within the entire framework of what numbers can truly help us with.
Once the focus is on the number, the eye is taken off the real game; behaviours. At the root, that’s what numbers do—tell us the results of our behaviours.
Take, for example, a customer service index (CSI), which is a direct measure of satisfaction with the service/product provided to the customer. You can easily see that if you are leading a company with a customer-focus then it stands to reason this number will be better than average.
If a company doesn’t pay attention to what the customer expectations are—such as not keeping them informed of order progress with updates, being treated in a courteous, professional manner and so on—then the company will receive a much lower ranking. The number is then a measure of the behaviours the customer sees.
All KPI numbers are measuring behaviours. Take sales, profit, throughput, cycle-time, anything you can find on your P&L, and you have a measure of a behaviour.
Let’s discuss profit. This boils down to your effort in orchestrating your team’s effort and that’s what drives the numbers to the desired KPI goals.
At the root, that’s what numbers do—tell us the results of our behaviours.
THIS IS THE HIERARCHY OF WHERE YOU SHOULD PLACE THE BEHAVIOURAL EFFORT:
1. Organization 2. Communication 3. Buy-In (engagement) of our team members 4. Cooperation among our team embers 5. Evaluation of performance 6. Adjustment of focus on tasks (behaviours)
When you put the effort into these things in the order presented, you are smoothing out operations, creating cooperation and collegiality, improving morale and culture and as a result of that effort, the numbers improve.
You can use the numbers to solve labor challenges such as being down one person on a 5-person team means that we can still have 100% output if we add 20% overtime from the team members. So, the effort must be put into creating a highly cooperative, customer-focused team that understand the importance of their behaviours on the ability to have job security, raises and bonuses as well as the quality of the work environment.
Ratios can be deceptive and hurt overall performance when they take centerstage. When we do what’s right, the ratios come into the correct balance.
To try to tip the scale to try to please some theory is a fool’s errand. Do the right thing. That’s how you stay the one who’s driving!
