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Your customer doesn't care about your internal scorecard

KPIs: The Problem with Key Performance Indicators (and what to do instead)

by | Dec 12, 2012 | By Karin Hurt, Results & Execution |

Focus on the game, not the score: The Problem with KPIs

KPIs are excellent indicators of success. AND, they can be remarkably distracting. So many teams focus on moving the number rather than on the behaviors that will lead to long-term success. Yes, KPIs are a vital tool for keeping your team on track. And, be sure everyone understands what success looks like in terms of behaviors and actions.

Joe’s Story

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.

Your customer doesn’t care about your internal scorecard. Focus on 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.

Key Performance Indicators: 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?

More reading to improve your KPIs by focusing on what matters most

How to Provide More Meaningful Performance Feedback

How to Lead a Performance Conversation Without Losing Your Cool

Avoid These Infuriating Phrases When Giving End of Year Feedback

How to Hold a Better Performance Improvement Conversation

How to Establish Team Accountability if You Never Have Before

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  1. Eric Dingler (@EricDingler)

    We recently built a new home. We used a pretty large builder. As the process went along, it became obvious what the employees were all working for. Their KPI’s.

    The biggest “indicator” used by their main office to determine bonuses and continued employment rested primarily on one question I would be asked at the end of the build.

    The question…”Will you recommend our company to a friend to build their new home?”

    This approach is backfiring for this company, and they don’t know it. The construction manager flat out said (and I know of others that have done the same thing)….”my ability to feed my kids rest on your answer to this question.”

    He went on to explain, “I know you we had some problems along the way, and I know you are not happy with the design process over promising. But, that’s not something I can control. So, if you could help me out. That would be great.”

    This company isn’t learning how to improve. And, all their talk about meeting our needs as a customer was just window dressing. We of course will never use this company again nor recommend them. In fact, we’ve talked a couple people out of using them.

    But, at least their construction manager got his bonus.

    What you measure demonstrates what you value.

    • letsgrowleaders

      Eric, Thanks so much for sharing that fantastic story. Absolutely perfect example.

  2. Steve Borek

    Behaviors and motivators are critical for success. This is why my clients love my process called Job Benchmarking. We ask if the job could talk, what type of person would they want in that position? Once the benchmark is established, we assess candidates against it. I also use this process with people in existing jobs to show where they need to improve, based on what the job is asking for.

    Instead of asking the team to try harder, ask a question. “What are we doing as a team, when we’re delivering fantabulous customer service?” Then, listen to the responses from the team. Keep inquiring.

    The answer is always in the room.

  3. Anonymous

    KPIs are good to tell a story. You need to know where you’ve been, where you are and where you want to be. That’s the story KPIs help you tell. How you move the dial is understanding the potential skill or knowledge gap that may exist or if it’s not a training issue, check to see if it is a process issue. Analyzing these things are best done by first asking questions and second testing against duties and tasks of the role. Once you can see “the whole picture” you can begin to provide what is needed to move that dial to meet or exceed the KPIs.

  4. letsgrowleaders

    Steve,I really like that image… “if the job could talk.” That is a great way to think about the needed skills in a creative way…

  5. letsgrowleaders

    Agreed, KPIs are very useful in telling the story and showing where to dig deeper. Thanks so much for adding that.

  6. Loren Oakes

    I did a lot of research writing a paper for my AACEi Certification. Although, I agree with your points, you can’t overlook whether or not you have the right KPIs that reflect the real picture.

    • Karin Hurt

      Loren, Absolutely. KPIs are vital. We have them for our company and we review our scorecard every week. I’m not saying don’t have KPIs. What I do believe is also very important is to identify the behaviors that will move the needle and to coach to those. I see far to many managers rallying the team to the indicator instead of the behavior.


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Karin Hurt

Karin Hurt helps human-centered leaders find clarity in uncertainty, drive innovation, and achieve breakthrough results.  She’s the founder and CEO of Let’s Grow Leaders, an international leadership development and training firm known for practical tools and leadership development programs that stick. She’s the award-winning author of four books including Courageous Cultures: How to Build Teams of Micro-Innovators, Problem Solvers, and Customer Advocates and Powerful Phrases for Dealing with Workplace Conflict, and hosts the popular Asking For a Friend Vlog on LinkedIn. A former Verizon Wireless executive, Karin was named to Inc. Magazine’s list of great leadership speakers. Karin and her husband and business partner, David Dye, are committed to their philanthropic initiative, Winning Wells – building clean water wells for the people of Cambodia.

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