Lean Tip
#3241 – Make Sure Your Goals are Measurable Before You Develop Performance Measures.
Have you noticed
that most KPI conversation start with someone asking a question like this: “So,
what could we measure?” Wrong question. It leads us down a rabbit-hole as we
rush to quick-fix KPIs. We end up creating the wrong KPIs for the goals we
have. Or we end up with very trivial measures that don’t help us make better
decisions.
Meaningful
performance measures start with measurable goals. This means that your goal
needs to be worded clearly enough and specifically enough that you can imagine
how you’ll recognize when it becomes real. So you might first want to check if
your current goals are measurable.
Lean Tip
#3242 – Build Buy-in Among the People Who You Need to Support the KPIs.
You know
what happens to KPIs that are developed by very small teams or consultants, in
private meetings and with no documentation of the rationale for choosing them?
They get ignored. No-one will buy in to something they don’t understand,
weren’t involved with, and see no relevance in. And don’t think that asking
people for their sign-off will work either. KPIs work with buy-in, not
sign-off.
You only
have meaningful KPIs and measures when they are brought to life and used to
improve performance. But they won’t be brought to life if the people who
collect the data, analysis the data, report the measures and use the measures
don’t buy in. Here are three powerful tactics to make sure you build the buy-in
from the start:
·
Use a Measures Team that includes the people
who know the process or function, the data, the customers and the current
problems of the area you want to measure.
·
Document your thinking as you design the KPIs,
so others can understand and critique it.
·
Create an open space for people to see,
explore, discuss and give feedback on the draft KPI work.
Lean Tip
#3243 – Define the Questions you Need Answers To
Linking
your KPIs to your strategy will immediately sharpen your focus and make the
relevant KPIs more obvious. Identifying the questions you need answers to will
further narrow your focus, because questions give the indicators context.
That’s
why, as well as KPIs, I always advise companies to think about KPQs: Key
Performance Questions. These will help you work out what data you need to
gather, and, therefore, which KPIs you’ll find most useful. For example, if you
plan on executing a simple strategy to increase your income by focusing on the
most profitable areas of your business, you could ask “Where are we making
profit and which processes are most costly compared to the returns we receive?”
Once you
are clear on the questions you need to answer, you can make sure that every
indicator you subsequently choose or design is relevant not only to your
strategy, but also provides the answers to very specific questions that will
guide your strategy and inform your decision making.
Lean Tip
#3244 – Determine the Right Measurement Methodology and Frequency
Knowing
what you need is one thing, working out how to access and measure that
information is another. Finding the right measurement methodology is critical.
Therefore, once you know what information you need to collect, you need to find
the right measurement methodology to get it. This is especially true if you
have to develop new KPIs or tweak existing ones.
It’s
always preferable to align measurement frequency with how and when the data is
used in the organization, because all data has a “shelf life”. This means
measurement frequency must be in line with the reporting frequency. If it’s
not, the data may lose impact and/or relevance. For example, if you collect
customer satisfaction data via survey in the summer and report on the findings
in the winter, then the findings are already six months out of date.
Lean Tip
#3245 – Assign Ownership for Your KPIs
Effective
KPIs require two types of ownership. The first is the ownership of the KPI in
terms of its meaning and interpretation. Someone needs to be in charge of
looking at the KPI, interpreting its meaning, monitoring how it’s changing and
deciding what that means for the business.
The other
ownership refers to the data collection. Sometimes you can automate the process
but, more often than not, data collection will require some human interaction.
Perhaps certain personnel are involved in transferring data from one database
to another, or they have to collect it manually. Again, this ownership needs to
be clearly set out and followed through.
Lean Tip
#3246 – Ensure KPIs are Understood by People Within Your Organization
It’s
essential that everyone in your business is aware of what you’re trying to
achieve, and how you’re measuring progress towards those achievements. This is
especially important for those who are charged with ownership of the KPIs, but
it’s also important for people right across the business, at any level. KPIs
should form part of the decision-making process for every employee, and
everyone should be able to answer the question, “How will what I am doing today
affect our KPIs?”
You
therefore need to ensure everybody understands how the metrics you are
gathering are linked to your strategic priorities. This will increase “buy in”
– how personally involved and enthusiastic your staff feel about your
priorities – and ensure that constant review and improvement are at the heart
of everything your people do. If you simply tell everyone that they have to
collect a whole heap of extra data from now on without explaining why, you are
likely to end up with a very cynical and disengaged workforce!
Lean Tip
#3247 – Find the Best Way to Communicate Your KPIs
It’s
always wise to think about how best to communicate your KPIs so their insights
are obvious, engaging and apparent to all. So many KPIs are reported in long
reports full of numbers or tables, perhaps with a traffic light graphic to
indicate urgency. This is not good enough. There is absolutely no point hiding
important insights in excessively long reports that no one ever reads.
Really
effective visualizations clearly illustrate trends and variations in data, and
engage the reader. Try to find the right picture for your KPIs and create an
explanation of the insights so that the nuggets of wisdom extracted from the
data are clear, unambiguous, accessible and, most importantly, actionable.
Lean Tip
#3248 – Describe the Intended Results
Once
you’ve identified your primary goals, you’ll need to figure out what success
looks like. For example, let’s say you want to increase profit by X%. In this
case, it’s a good idea to look at the end goal and work backward.
Ask
yourself: what steps are necessary to achieve this goal? Who will perform these
tasks? Do you have enough staffing and resources to support these tasks? The
answers to these questions will help you identify the concrete steps to achieve
your goals—this, in turn, informs which key performance indicators you’ll focus
on.
Lean Tip
#3249 – Do Not Set the Goal Too High. It is More Motivating to Over-Perform Than
Struggle.
In my
experience, managers will often make the mistake of believing that ambitious
goals will, in them self, motivate and encourage the team to work hard. But the
goal for the KPI's should be realistic, since it is much more motivating
working towards goal that you actually can achieve, rather than struggle trying
to reach an unrealistic goal.
What then
defines a realistic goal? It's difficult to generalize but looking at
historical data and comparing it to other factors like budget/time/resources
etc. will hopefully enable you to determine if the goal is realistic or not.
Lean Tip
#3250 – Not Everything That Counts Can Be Counted, And Not Everything That Can Be
Counted Counts.
William
Bruce Cameron (or was it Albert Einstein?) said this famous quote many years
ago, but it is still relevant today. Not everything can be easily tracked, but
it doesn't mean that it is less important. A concept like Brand Perception is
difficult to measure in quantitative tests, but it might still be very relevant
for your business. You might not be able to set up a dashboard which is
automatically updated with the Brand Perception every hour, but it might still
be worth investigating through surveys/interviews?
Also
remember that KPI's are not a business goal in themselves - they simply
represent them. So if you know that an activity works and has a positive impact
on the organization, but you have a hard time measuring the effect, you should
of course still do it - but simply recognize that not everything that matters
for your business can be measured or defined as a KPI.
Lean Tip
#3251 – Foster a Creative Environment.
Allow
team members to brainstorm in an open, non-judgmental framework that embraces
the team’s purpose and direction. Employees need to feel secure enough to take
risks, both individually and as a team, and to be willing to suggest daring
ideas. After all, creativity is just as important as innovation, and both are
essential to the longevity of a business.
Lean Tip
#3252 – Build Team Cohesion.
Create a
means of communication that allows for easy workflow, establishes a distinct
set of priorities, and makes all colleagues feel included. Solicit feedback
from staff members and listen to employee input to make them feel heard. Ensure
everyone is operating from the same playbook so team members can focus and
flourish.
Highlight
the different ways employees contribute to the business and build teams around
common impacts. Forming smaller teams can help group and guide employees at a
more manageable size, fostering productivity and accountability. This also
gives employees the chance to develop stronger professional relationships, as
workers will want to know they can depend on each other to achieve their goals.
Lean Tip
#3253 – Learn Visualize Ideas.
Give team
members the opportunity to use visuals to share and clarify their ideas at the
simplest level. You can do this with anything from rough sketches to full-scale
presentations. Most people learn better and retain more information when it’s
presented visually, and a collaborative whiteboard, whether physical or
virtual, is a great tool.
One
benefit of transforming ideas from spoken concepts to visual aids is it can
help people digest information easier. It’s one thing to rattle off numbers or
statistics, but a visual representation can further everyone’s understanding
and comprehension.
Lean Tip
#3254 – Empower Your Employees
Delegating
power to your employees can help improve teamwork, increase its effectiveness,
as well as improve morale and productivity. As an employer, empower your
workers with the ability to make decisions which will essentially boost their
confidence, give them autonomy, and reinforce their roles and responsibilities
within the organization and their respective teams.
Empowered
employees are more likely to work collectively as a whole-team when given the
opportunity to communicate their versions of a goal, as this allows them to
feel heard and work towards a shared objective as a team. Effective delegation
of decision-making is important to facilitate teamwork- rather than fixating on
a person’s working ability, one should help them share work responsible for
team tasks.
Lean Tip
#3255 – Clearly Define Roles and Rewards for Each Team Member
Rewarding
team members for meeting early goals and/or making significant progress helps
your team members stay motivated and on track for the project's completion.
Employee recognition can also help your fellow team members remember the
importance of their role in the project and increase morale.
Both team
leaders and individual contributors can give positive feedback by noting
exceptional work or praising a valuable idea. Recognizing your coworkers as you
work toward a common goal can help motivate the entire team.
