Why KPI fail?

“If you can’t measure it, you can’t manage it.” so you and your team came out with Key Performance Indicators (KPIs) to measure all parts of the business. But what happened?

For many years, KPI is the buzzword in corporate when it comes to performance management. But instead of getting the desired improved performance, most company found that they got the opposite, lower performance, undesired performance, increase office politics and conflicts, depression, etc. There are many reasons why KPI fails to achieve the desired result, some of them include:

  • measuring too much or too little
  • measuring what everyone else is measuring
  • hardwiring KPIs to incentives
  • not getting the buying-in from stakeholders
  • ….

the list can goes on and on and you can find many more in google. But here I just want to highlight one fundamental mistakes that most people made. KPI, or whatever other indicators in measuring performance, is just an indicator. Nothing more than the indicator shown in the thermometer that measure your temperature. It’s a number that shown the status of the item it measured. It doesn’t tell why and how it get there. The number is an outcome of combination of many factors that happened prior to the measurement. These factors may be internal (within your control) or external (beyond your control), but the only way, I repeat, the only way to change is to change the factors that contribute to the outcome. Sadly, many organization spend far more time and effort looking into measurements rather than actual works and behaviors that matter to the business outcomes.

Published by Freeman Tan

Managing Director, aspire360

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