The problems with KPIs

The reason why we measure performance in organizations is often reduced to simple platitudes, such as, “you can’t manage anything unless you measure it” or “what gets measured gets done.” The three main reasons for measuring performance are:

1. To learn and improve
2. To report externally and demonstrate compliance
3. To control and monitor people.

The problems with KPIs

Why do we measure performance?

In practice, the term ‘KPI’ is overused, and often describes any form of measurement data and performance metrics that measure business performance. Instead of clearly identifying the information needs, and then carefully designing the most appropriate indicators to assess performance, we often observe what we have termed the ‘ICE’ approach:

• Identify everything that is easy to measure and count
• Collect and report the data on everything that is easy to measure and count
• End up scratching your head and thinking, “What the heck are we going to do with all this performance data stuff?”