chuck out your KPIs and measure real performance
Something that crops up constantly in the line of business that I am in is measurement of performance; often it is as simple as “Did we get what we ordered?” not least in terms of my clients being satisfied with me, but it is also about service contracts where delivery can get harder to pin down. I am in the process of writing a short eBook on the subject, so let me share some of my thinking here.
One of the problems that I see regularly are where people, whilst happy enough to have used an output specification, then use input KPIs; “We’d like you do clean the place please, anyway you like as long as it is clean when we come in in the morning, but then we will measure you on how you do it”.
Folks can get very prescriptive about KPIs, and I can remember one with 277 measurements, all reported on every month and discussed in full at the monthly client-supplier meeting. Apart from anything else how much does all of this sort of thing cost? I bet no-one is measuring that, because if they were it would soon stop, but no, the client will waste time and resource on it and expect the supplier to do the same whilst also, no doubt, nagging constantly about reducing costs.
Now don’t think here that I just have my supply side hat on because I don’t. This is a crucial issue for both client and supplier to resolve. I am firmly of the belief that if we were to stop measuring most of what we dress up as KPIs we would see an improvement in performance and certainly a reduction in cost. Why? Well a lot of what we measure is largely out of date or irrelevant anyway.
Out of date? Yes, because unless you are looking at real time reporting all of the information is out of date, and if we then go to the monthly meeting armed with last month’s figures… It may be good enough for trend analysis and all that fine stuff, but it is history. And when were the targets for those KPIs set? Well they should have been in the tender so that suppliers could see what they were supposed to be pricing against, and that tender was drawn up, what, three to six months before the contract was let, and how long has the contract been running for?
Now how has your business changed over the time since those KPIs were drafted? Are you truly measuring what you now really need or are you in that farcical situation of trying to make your supplier perform to a standard that you no longer want? Client pushing suppliers to deliver what is no longer relevant is something that I have come across with monotonous regularity for many years now.
The basic issue for the client is surely a simple one; is this service supporting my business needs or not? If you get down to this sort of base level you can come away from the nonsense that we see in most KPIs. Freed of the constraints of all the minutiae that bogs us down we can really start to manage what is important to us as a client and truly engage with the supplier to use their expertise to devise ways that they can support our business goals best.
So at your next monthly supplier meeting, don’t waste time talking about history; use the time to come up with something useful instead. All of a sudden you should find things are getting better.