Amidst the availability of an unrivalled quantity of data, there’s a sense that it is ever more challenging for organisations to stay focused on measuring, tracking and acting on the right things.
To understand this challenge in more depth, the Evolve team recently engaged with our clients to share and discuss Key Performance Indicators and the measures that matter.
Here’s what we discovered.
What are we measuring today and why?
Within the organisations represented by the clients we spoke with, the traditional metrics prevail.
Top measures in use
The top KPIs measured and reported to SLTs and Boards today are:
Reasons supporting the use of current measures
Not surprisingly, the main reasons organisations employ these common KPIs are consistent:
- They are widely used, providing more ability to benchmark
- They are well-established, giving them credibility – especially with senior execs
- They’ve been proven to link directly with commercial outcomes
- When connected to verbatim feedback they give insight to inform decision making
- They are embedded – ultimately they are what has always been tracked and this carries its own momentum
What do we need to improve?
There are also consistent themes in what insights professionals see as improvement opportunities within the current measurement frameworks used.
Limitations to address
Many popular KPIs are designed to be universal and do not always accurately reflect what organisations stand for or are trying to achieve
If KPI measures are not supported with verbatim feedback and advanced text analytics it can be challenging to understand what truly drives results
Many KPIs in use are focused around customer feedback meaning important operational measures – and performance – can be overlooked
Some measures are harder to communicate and understand impacting buy in – especially ones involving more complex calculations
Topline measures don’t always align with team measures, resulting in a lack of engagement and resistance to use
Some measures can feel too hard to influence, especially when overall interaction performance is measured but it is more challenging to link to individual’s efforts
Promoting greater engagement
Many clients we spoke with agreed there is always more work to do on engaging the wider business with KPIs.
Although not the norm, some have seen instances of:
As conditions become tougher and it gets harder to move the dial on results, people are becoming disengaged seeing the same metrics year-on-year with little movement
Where KPIs are determined at the top of the organisation and pushed down with no consultation and little engagement, meaning they are often ignored
Encouragingly, our clients largely report that while measures may not always be completely understood, they are respected as the means for understanding the health of organisations.
The challenge now for many insights professionals is continuing to work with stakeholders across their organisations to promote better understanding, focusing on:
how individual areas within the business contribute to results
what changes mean
what they need to do as a result of changes
Are we ready to change the metrics that matter?
While there is certainly an appetite for change, the clients we spoke with have enhancement, not transformation, on the horizon.
Many of the metrics that currently matter are well embedded in organisations and supported by a vast amount of historical data.
Instead, the immediate focus is towards more creative use of the measures at their disposal.
Initiatives in considerations include:
• Supplementing existing KPI verbatim feedback with more sophisticated text analytics that help dive deeper into the results to understand drivers and effects
• Compiling an index of KPIs measures to focus organisations on one number
• Considering new data capture techniques to bring more ‘in the moment’ behavioural insights into KPI frameworks
And many are already focusing on fusing market, customer and employee metrics to complete the service profit chain equation.
Overall, we can see that the cadence of KPIs is changing from annual review towards continuous review and an expectation that the business should understand itself well enough and have sufficient control of its delivery to proceed from measurement to result driving action as part of BAU. This is incredibly ambitious but is a reflection of many aspects of life in this day and age – immediacy and urgency in all aspects of business.
So what does it all mean?
Ultimately, it seems we all agree on one critical point:
It really doesn’t matter what you use as ‘the metric that matters’ – it just matters that you have a key measure that everyone in your organisation fully understands, completely believes in and feels empowered to improve. There are myriad options for your metric that matters – for success it needs to be linked to action.
Source: Synthesised output from discussions with Evolve clients in June, 2018.
What are your thoughts on the topic? Join the conversation by leaving a comment below.