Getting people to use your KPI System
Many organisations find this is the most difficult part of the process, and for them it is undoubtedly true. Why is so?
The most common reasons are:
• Most KPI systems are designed from the top down, and imposed on the operators through a training process.
• Managers decide what the KPIs are, and specify the data sources needed to calculate the KPIs.
• The management system is a management prerogative, so managers specify the what and the how of the system. IT staff set up the system.
• Top management expects that their strategy will guide the selection of KPIs.
• Many employees have a deep and in some cases, justified mistrust of systems that can impose new layers of control.
• The way the system works is hidden behind layers of arcane technology.
No matter how many briefings, and training sessions on how to use the new system are conducted, there is a mental disconnect for many operators to overcome before they really trust the new system.
It does not need to be that way.
What happens if we reverse the whole process?
If your desired end result requires that people understand and use your KPI system it makes sense to start with the people who are going to use it.
After all performance improvement requires that people make better operating decisions day by day, because the quality of their decisions flows through to the accounting system in due course and eventually to the monthly reports that top management relies on.
The people making these decisions are first line managers and supervisors. These are also the people who have the most intimate knowledge of the range of decisions they deal with daily, and who have to deal with the consequences of getting it wrong. If you make them the bedrock of your KPI process you know that you are building on solid ground.
That means that the first step is to invite them to a KPI workshop. If you organization is large and complex that may mean that you have to run a few workshops.
Your workshop can cope with quite a large group because most of the work will be done in small groups that mirror the functional structure of your organization.
The next section provides guidelines for conducting the workshop that starts the process. (I am unable to upload the graphic that sets out the workshop sequence but you can get that from the link at the bottom of this article. The workshop takes two days, but you can space them a week apart. If you choose this option try to complete the first three steps on Day 1.
The final two steps are likely to be more time consuming than you may first think, and may not involve all the people who contributed to Day 1.
The Real Power of your KPI Model
Most organizations I have worked with find this approach to developing a KPI model transformational in generating understanding and performance .improvement. Here is a brief summary of the beneficial effects. I have used Peter Senge’s organizational learning model as described in The Fifth Discipline (1992, Random House, Sydney).
A KPI model is a complete model of the business system. By working as a group on this the whole management team develops their understanding of the interactions between all the parts of the system. This helps to break down the silo effect that all organizations seem to develop as they grow.
Individual members of the group can suddenly make the links between their personal efforts and the arcane mysteries of the accounting system. For many this is a revelation. Doing accounting courses teaches accounting, and many fail to learn; it does not teach the relationships that drive the whole system. The joy of learning something new is a wonder to behold.
The group will discover the hidden mental models, the assumptions that drive decision processes often causing conflict between functions. A KPI model is a mental model for the whole organization. Everyone who has contributed changes their personal map of how it works.
Building a shared vision
The process demands that people listen to each other and expand their understanding. This is the source of the shared vision of what is possible, captured in a new map of the organization. The KPI model is not the vision; what people can do with it changes their vision of the future.
Any time a team improves their shared understanding of each others’ contributions to productivity, their performance will improve. The KPI development process as described in this article is a team learning exercise. This process works in the same way as Quality Circles.
The KPI modeling process ticks all Peter Senges’ boxes.
Just do it.
Start with the way the organisation works now, then you can explore the alternative ways of doing the same things or building models of new strategies to achieve new goals. One of the most exciting things to see, and you will see it, is the “Eureka Moment”. They happen so often that it cannot be an accident.
If you are reading this at KPI Library, you will not be able to see the workshop sequence graphic. You can get the whole paper from http://bizlearn.biz/cms/bizlearnbiz-themes/free-kpi-modeling-resources/146-three-steps-to-make-kpi-management-work-better