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5 Cures for KPI-tice

By Liz McBride

    Tue, Apr 21, 2015 @ 09:00 AM KPIs & Dashboards

    I’m at Rhythm Headquarters about to take my first sip of coffee when the alarm goes off. I rush to the control room to be debriefed. Nicole is standing in front of the monitor displaying an aerial view of Gautneau Alignment, an automotive parts manufacturer. Nicole reports: “Doctor, Gautneau Alignment employees are running around like chickens without heads, measuring everything that moves, pulling data from multiple sources, and disrupting the very behaviors and values that made them once a true contender in the marketplace. Take a look at the live feed.”

    • Nervous candidates are lining the foyer of Gautneau Alignment.
    • The head of HR is going down his list, calling candidates to make job offers and marking ‘hired’ on his spreadsheet.
    • Two employees are talking at an empty desk: “Who approved his training? This is the second training in a month and I need his help with the new design.”
    • The sales team is hurrying through phone calls and marking their spreadsheets for completed meetings.
    • One CMC mill operator is performing scheduled maintenance. Another is recalibrating her machine for jobs that are quicker to complete rather than the urgent jobs at hand.
    • The Plant Manager walks by the work that’s piling up to capture data from his operators on scheduled vs. unscheduled downtime and # of parts expected today.
    • The forklift driver is racing down the aisle, trying to find a missing pallet. “Oh well, this one’s close enough.” She scans it and takes it to shipping.
    • The Shipping Associates are hurriedly packing boxes and printing labels to get them on the truck. The Shipping Manager is urging them to go faster: “We have to make our on-time delivery numbers! Let’s go let’s go! Get ‘em in there!”
    • The QA inspector is collecting all of the returned products to mark on his spreadsheet.
    • The Safety Director has pulled the Metal Fabricators off the line for their weekly Safety training and marked it on his spreadsheet.
    • The Executive Assistant is running through the halls on a hunt for the CRM, ERP, and random Excel reports to compile all of the KPIs.

    “I’ve seen enough.” Nicole hands me my Rhythm prescription pad, throws me a towel to take care of the coffee stains and presses the transporter button.

    I appear in the lobby of Gautneau Alignment and weave through the nervous candidates to the receptionist. The receptionist is busily answering and transferring calls to customer service in between her trips to the printer. I ask for the CEO and am ushered through the doors. Before I’m escorted to his office, I’m awarded the fresh-off-of-the printer report, a tree’s worth of numbers.

    The CEO shakes my hand. “Thank you for coming so quickly, doctor. I see you have my prized possession in hand, my metrics report. You see, we started receiving customer complaints last year about our shipments, which led to some morale issues, you know, par for the course. We are hiring like mad in order to stay ahead of our customer’s needs and to keep our busy team’s sanity in check. I am watching things like a hawk. You’ll be very proud of the KPIs we’re monitoring. But unfortunately, we’re still not seeing the results we’d like, so I wanted your advice. I read Rhythm’s blog on ‘leading indicators’ so, now I’ve added those to the mix as well. As you can see on page 22, we are tracking on-time deliveries as that is our #1 complaint. We’ve added: # of parts completed, # of pallets scanned, # of boxes packed to our list.

    “As you can see, doctor, I’m doing all I know to track everything I can. What am I missing?”

    I drop the report on the table and pick up my prescription pad. “From what I’m seeing, your team is experiencing the side effects of KPI-tice, which includes:

    • Dry mouth and nervous behavior from running around compiling data.
    • Confusion on the right KPIs. For example, # of boxes packed may not get to the root cause of poor on-time deliveries. In fact, the customer calls I overheard were about the wrong order or items being out-of-stock. You want to help employee morale by adding new hires, but the strain on getting these new hires up to speed may lower morale even more. This is especially true if they are not top candidates. Rather than focus on adding new hires, you could track # of job scorecards created and # of A players hired.
    • Dizziness from poorly defined KPIs, for example, hurrying through sales calls rather than defining what a sales call means.
    • Nausea from adding more KPIs to the mix when action is what’s really needed. We should focus on what you’re going to do towards improving customer complaints and employee morale rather than depending on new things to measure.” 

    “Here’s your prescription for KPI-tice:

    1. Tell the KPIs who’s boss - Don’t let KPIs talk you into compiling them from multiple resources and making them look pretty. They do this to keep you busy and mesmerized by their beauty rather than allowing you time to take action turning them to green! Find out which KPIs will get your team talking and into action. Kick the others to the curb.
    2. Only invite a select few - If you’re measuring everything that moves, you’re not going to notice what to take action on. You may also find competing KPIs, which may cause your team to work in opposing directions. Whittle your list down to 8-12 KPIs you and your team want to improve.
    3. Don’t let them talk jargon - KPIs love to talk in generalities so you’re team is left to make assumptions in how to measure. When we’re left to make these assumptions, we tend to do so in our favor, which could leave others blindsided.
    4. Include some forward thinkers - Mix up results KPIs with leading indicators so you can recognize patterns and make adjustments before it’s too late.
    5. Don’t let them keep you idle - A trap people fall into as the KPI turns red is to only rely on adding leading indicators to measure rather than taking action! KPIs are things you MEASURE and priorities are things you DO. Make sure you have a healthy mix of both in order to turn your KPIs to green.”

    “Since your first step in getting better is to whittle your KPIs down to 8-12, use this infographic to help you decide which ones to keep, which ones to modify and which ones to toss. I’ll be back next week to check on your symptoms.”

    “Thank you, doc…” And just like that, I was transported back to Rhythm Headquarters.

    I’m not really a doctor, but I play one in this blog. Do you have a case of KPI-tice?

     

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