The KPI’s and how they work - Sometimes in peculiar ways.

January 12, 2016

It is no secret that IFAK aims to point to important issues, when it comes to clever choices for companies, wanting to improve performance. KPIs are often discussed as a tool.

One thing that made us speculate is when a “high performance advisor” consultant presents advice on building KPI’s. We believe, he will claim, they drive performance and make the individual seek to fulfill the personal KPI’s. He will claim that each KPI must be “owned” by the person. That “making it personal” will help a person focus on what is most important for him/her and hence for the company. That motivation should be high when KPIs are fulfilled and lower whenever not. So that any other “altruistic” agenda becomes less important. Often he will also suggest that variable pay can be a supporting tool for increased focus.

 

Right so far?

 

Now, if this is true (and it is) it can be assumed that the consultant has his own KPI’s in the company he works for. ‘Cos if he hasn’t, he and his company will be a lot less credible with the advice they market.

 

We assume that the company has asked the consultant to come along since they don’t know how to find the optimal set up of KPIs themselves. So they trust or they should look for at different advisor. Let us also assume that the consultant has a budget to fulfill and that “monthly index 100” is a KPI. That, perhaps, he has a bonus for over scoring. Few consultants have “customer satisfaction” as a personal KPI. Because it is very complicated to measure.

 

This makes it easy to see that it must be difficult to have the customer’s success as 1st priority. Only priority will be given enough to make customers willing to recommend or at least to pay the invoice. Especially in a situation where things do not go as initially planned or if there is a possibility to sell things a little faster or slower than the customer would actually benefit from. This will, more often than not, be the case. Because a consultant cannot know every single company culture in detail. He knows his own KPI more than the context in which he operates. IF he doesn’t, his KPI is badly implemented. He will have to stick to this fact or it means that KPI’s DO NOT drive performance efficiently and pointing to altruistic goals, (the wellbeing of others etc.), is a better method for driving performance.

 

A catch 22 as you can see. Choice is like this: Care less about customers timing and agenda or less about own KPI. There can only be one priority 1. Of course.

 

So perhaps it’s a better idea for a company to grow skills in how to build a KPI and do the job internally?

This cannot always be a solution, but many times, it will remove a lot of trouble. It will also. If done skillfully, strengthen ownership and sense of urgency. It may take longer time. However if it does, it’s because it included the cure to “Invisible” and undetected blockers that the eager consultant may have difficulties in seeing. Due to own KPI’s as well as lack of customer's DNA.

 

For a teacher the goal is to make the company aware about KPI’s and how to set them up. For a consultant the goal is to make the company satisfied with a KPI set up done in the way the consultant suggests.

Mission is completed for a teacher, when people, on top of the KPIs themselves, have acquired the knowledge about KPIs and are able to set up such and able to work with these for the future.

 

If adjustment is needed the consultant will be happy to assist. Because it is good for his KPI fulfillment. For a teacher it would be embarrassing, if the company cannot do it themselves.

 

It should be clearly stated that we have met more than one honest and skillful consultant here and there. We do not think all consultants are bad. We only want to point to the risk above and we will leave it up to the consultants industry to solve this riddle. Perhaps by using the IFAK approach.

 

 

 

 

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