“But They Worked Hard” – Reasons to Analyze Your KPIs in January (and Every Month)
First, let’s define KPIs. Key Performance Indicators, or “KPIs” are, by definition, the metrics and measurables a business examines to determine how effectively a company is achieving business objectives. At the department level, it is how the department evaluates its success at reaching targets.
All too often, company and department goals are set – perhaps, annually or quarterly – but no thought is given to the real way in which to analyze performance against those goals. Oddly, many use the term “KPIs” – from project managers through department managers, through executives, board members and analysts. But, did they simply select a measurable unit, without really stopping to determine if the unit itself is a true indicator of how the company is doing in meeting its objectives?
So, my fellow managers, I challenge you: don’t blindly agree to measure your department/division/team based on pre-defined metrics. Read each measurable unit. Ask yourself, “does meeting this goal drive business targets?”, and “do I know the true business objectives as they pertain to these numbers?”
OK, let’s start with a simple example – call center KPIs. If you are the call center manager, did you – on behalf of your department—agree to spend less than 60 seconds on all Level 1 calls or something similar? If so, then each week, you log into the phone or ticketing system, and run a simple report showing success or failure against this metric, right?
Now, this may be fine. But, keep in mind what you are measuring. You have agreed that a good indicator of the level of service your team is providing is the number of calls handled, and/or the speed by which calls are handled. When it comes time for your team members’ reviews, this is when managers try to argue that “my team handled some really important issues this quarter”, or perhaps, “we got 4 customer reviews commending us for excellence.” Or maybe even, “we stayed on calls longer, which enabled the Level 2 team to spend their time on more complex issues.”
But again, you agreed to measure time spent on calls, and by doing so (perhaps inadvertently) agreed that this – and not quality of call, not complexity of calls, not level of service given – was important to the business achieving its goals. Conversely, let’s say this is the most important criteria, and that there is a business objective that requires speed of call handling, above all else. Well then, you as manager do not really have the right to change the rules and argue for a different measurement. If your department goal was to reduce time on calls, then it is your job as manager to hit that mark.
All of this is really to say that it is your job as a manager to know what is being measured, understand the business aims for the specific performance goals, and to educate your team on the same. The time to suggest that a different item is more important to the business and should be measured to determine department success, is when that change occurs. It is not a hindsight test, and will not bode well when the “but they did do well in this other area” argument is made, come raise/bonus time.