When KPIs stagnate – Don’t PANIC!
HAVE YOUR CORPORATE KPIs PLATEAUED? WOULD YOU LIKE YOUR CORPORATE KPIs TO BE HIGHER?
You and your team have spent precious time and effort developing and implementing KPIs, and then, after a while you find that, despite your best effort, some KPIs stagnate in the middle range. Why is this happening? What does it mean and what are you to do? How to change this situation?
TRACKING CORPORATE KPIS IS ONE THING – MAXIMISING THEM IS ANOTHER!
Well, one thing you could do is accept that a stagnating KPI is one that is intrinsically very difficult to raise and be satisfied with the score in the middle range, while at the same time making sure that it does not get any lower. Of course this has two major drawbacks
The KPI stays in the middle range which is not very satisfactory, and
It leaves a feeling that something is not understood as it should be and not managed in the best possible way.
The second point is particularly troubling from a management viewpoint. After all managing is about controlling outputs and outcomes, and making them reproducible in an effective manner. Also, presumably there are good business reasons why the target was set at the level it was. And there are good reasons, a priori, that the target should be achievable. So the scores staying in the middle range puts the above considerations into question without offering any explanations or ways out of the conundrum. In most cases, KPIs can go higher or much higher!
THE IMPORTANCE OF CAPABILITY OR FITNESS FOR PURPOSE
To understand how KPIs can be stuck in the middle range and how to raise them, one has to look at capability and fitness for purpose. Capability determines how effective an organisation can be. High organisational capability enables staff to contribute their max; that is, the work environment leverages their effort to create the maximum desirable effect. So capability relates to the quality of the work environment. And as long as the work environment does not leverage effort in a way that creates maximum desirable effect, then the organisation operates below its optimal level!
SO… LET’S WORK ON MEASURING, MANAGING AND IMPROVING CAPABILITY!
If you have any thoughts about this topic, we’d love to hear from you.
Paul Founder, Capability Institute