Balancing Your Targets

Key Performance Indicators or KPIs; love them or hate them, they are the reality of modern organisational life. There is even a free-to-join, online KPI library (www.kpilibrary.com) searchable by keyword to help you design or improve your own KPIs. Often dismissed as 'bean-counting', KPIs fulfil an important function: they help an organisation define what constitutes success and then measure to what extent it has achieved that success.

However, it is often easy to view KPIs negatively. For example, there may be too many targets or targets that focus on the wrong issues. It can also be difficult to monitor progress; for example, staff empowerment is difficult to quantify. Furthermore, once a KPI is set, the organisation can be reluctant to change it because then performance cannot be compared to that of previous years. Likewise, if you want to benchmark your performance against your competitors then you need to have the same KPIs. But enough of the problems. How do we start to think positively about KPIs? How do you find your way through the tangled priorities?

The way in which your organisation measures and discusses its KPIs may give some clues as to their relative importance. Which KPIs are regularly mentioned in e-mails, presentations and conferences? If the top management team appears to focus on certain KPIs then in practical terms, so should you. Sometimes, the KPI with the worst performance against target will become, temporarily, the most important to achieve. As a manager or executive you can anticipate such trends by monitoring all of your targets that contribute towards KPIs and manage a balanced performance by your team(s).

"Balanced" is a key word. In 1996, Kaplan and Norton launched their Balanced Scorecard, a method of categorising your KPIs and ensuring that all aspects of the business receive appropriate attention. If you type "balanced scorecard" into amazon.com today, there are 6,601 books available on the subject! The Balanced Scorecard places KPIs and targets under four headings: financial performance, customer knowledge, internal processes and learning & growth.

When was the last time you considered these four factors for your team? The day-to-day pressures of business mean that most managers focus on just one or two. Customers are easily focused upon - sales, marketing, this is the income generating work that is of clear importance. Learning is by now a familiar priority, not least because of national standards such as Investors in People, although how often does training take a backseat when targets are suffering? Financial Performance is easier to measure, but it is tempting to leave the financial stability and growth of the organisation to others (unless you are the Finance Director!) How does your team contribute? How well is your budget spent and managed? As for Internal Processes, this is an issue that can be ignored by people saying, "We've always done it this way." and "If it ain't broke, don't fix it." But there is always a better way to perform and a manager with focus can point the way to finding it.

KPIs and targets are such familiar terms that they often form part of the 'corporate wallpaper', vanishing into the background as more pressing daily priorities take your attention. Why not think positive and give yourself a KPI 'assessment'? How aligned to the organisation's goals are you? You may be surprised at what you find.