Creating your own KPIs and performance indicators also means being careful in considering the types of behaviour you are going to create with the indicator. As the saying goes, you achieve what you measure. The act of measuring something means that we are placing focus on it and as a result we are pulled towards achieving it. It can be easy to put in a performance indicator thinking it will lead you to what you are trying to achieve but it might have a different effect.
For instance, let’s say that you are managing a call support centre for your organization. One of your strategic objectives is to improve the experience and satisfaction for those that call in and use your service. One of the tactical goals to support the strategic objectives of “improve the experience and satisfaction for those that call in” is to reduce the wait time before getting to a customer service representative (CSR). As such you put a performance indicator in that measures the number of calls that each CSR takes in a day, thinking that if each CSR takes more calls per day the current wait time will drop.
Sure enough, after implementing the performance indicator and holding people accountable to the performance indicator the number of calls per CSR increased and the wait times did drop. However, so did the satisfaction rating. What occurred was the CSRs were rushing calls so they could get to the next call and as a result the individuals calling in for assistance were not having their problems completely dealt with. The organization was getting what they were asking for, more calls per day per CSR but it was actually working against their strategic objective of improving the experience and satisfaction.
Performance indicators are powerful and assist in driving the behaviours in your organization in the direction that you want. However, they must be carefully thought out or they can do as much damage as good. In our example, the indicator of number of calls per day per CSR may have reduced the wait time of the caller but didn’t improve the satisfaction level. If we really examine the indicator that was created we would likely see it for what it is, an efficiency indicator for the staff. However, in this case it wasn’t driving effectiveness, which is what the manager was really after.
When we are building a new indicator to use in measuring our organization, we need to examine each potential indicator against what kind of behaviour it is going to generate. Is the type of behaviour that will be created the behaviour that we are looking for?
We also need to look at the performance indicator in context with the other indicators the company is using. The Manager may need to keep the Number of Calls per CSR per Day to watch for trends and to assist in identifying problem areas. However, it may be an internal indicator that isn’t widely published and it is used in conjunction with a satisfaction indicator, type of call, average call length or other indicators to ensure that the balance is achieved while driving towards the strategic objective of improving the experience and satisfaction.
With more information about the calls occurring, the data can be used to discover insights about what is going on and proper initiatives can be undertaken. Through the data discovery process the manager may have learned that 40% of the calls are looking for hours of operation and locations. Using features in the phone system and changes to a website might reduce the call volume, allowing for wait times to be reduced for those that need assistance.
This has just been one example of how performance indicators and KPIs can be leveraged to drive a strategic objective. The key is to create the indicators with the desired behaviour in mind and that we have to look at all of the related indicators. Measuring it will drive behaviour, so it is imperative that you are measuring the right things.