The Problem with Key Performance Indicators (KPIs)

Joe (not his real name) began the team meeting by covering the team’s scorecard and Key Performance Indicators (KPIs).

“Great work on your sales KPIs, we’re in the top-tier across the board. We are so close to beating Sharon’s district. If everyone just sold one more today, I think we can do it!
Also, we seem to be struggling in the customer service KPIs. We have a downward trend and there are 4 districts ahead of us. I need more focus there across the board. Janet, you are doing the best so whatever you’re doing keep it up. Everyone else, I need you to try a bit harder. Awesome. Thanks everyone, now let’s go make it a great day. Remember, fantastic customer service!”

If that sounds like a team huddle you’ve ever been in, you know why I have a love/hate relationship with KPIs. Joe’s team may understand the KPIs, but they don’t have a clue what they are supposed to do when they leave that meeting.

What should they DO to sell one more?

How DO they improve the customer experience?

KPIs Are Indicators, Not Action

Scorecards and KPIs provide wonderful directional indicators. Good trends point to actions worth replicating. Bad trends shine a spotlight on what must change. A hard look at the data can help you to identify best practices. Comparative scorecards will also help you identify outliers who need more support.

KPIs are important.

One of the biggest mistakes I see team leaders make is talking about the KPIs instead of the behaviors needed to achieve them.

KPIs are a terrible topic of conversation.

People don’t change scorecards, they change behaviors.

A focus on KPIs versus behaviors can lead to useless, if not stupid actions.

Almost any behavior applied with enough focus will create a short-term lift in results.

Micromanagement can get you there for a hot minute. Fear and intimidation will work for a while. Heavy incentives and hoopla will create a short-term lift. Ice cream and pizza can’t hurt either.

Upward trends in KPIs without an underlying change in behaviors, can lead to a false sense of security.

When the fear goes away or the sugar wears off, the results go back down.

The Behaviors That Matter

The only way to build sustained results is to improve the underlying behaviors. Don’t ask a sales rep to be more courteous. Ask her to open the door for the customer, use the customer’s name, and walk around the counter with the bag. Talking about the frequency of those behaviors will do more good than talking about her customer service survey percentages.

So what are the right behaviors? Why not ask the team?

What tools and techniques have you used to ensure the conversation focuses on behaviors?
How have you avoided the distraction of numbers and KPIs?