Killing Performance Inadvertently
Do KPIs do more harm than good..?
“Man is the measure of all things: of things which are, that they are, and of things which are not, that they are not.” — Protagoras 1
In recent months I've participated in various conversations about sense making in the post-pandemic organisation.
Making sense of what’s going on has always been the first vital step in making good decisions and taking effective actions that are worthwhile for people and value creating for the organisation and wider society.
But making sense of things isn’t easy in an increasingly complex, world filled with unprecedented uncertainty and precious little predictability.
The world wasn’t always this way, and the seemingly enduring stability of yesteryear led to a lot of sense making becoming crystallised into key performance indicators (KPIs).
In the world of Human Resources, KPIs are king. However in the world of human beings, human performance is actually always assessed by other human beings.
And no matter how many digital dials you dish up on their dashboards, humans rely heavily on informal observations in assessing others: when they show up, when they go home, how visible they are in meetings, how much they rush around etc. etc. 2
Whenever there are people, there are people who want to make an impression on other people.
That’s why we all indulge in impression management - behaving in ways that we hope will ‘score’ well on the metrics we believe matter to the people we think matter. 3
Most human metrics offer plenty of scope for gaming:
Just because someone arrives and leaves at the ‘expected’ times it doesn’t mean they’re necessarily productive in between. People can and do "arrive & skive" and/or "bunk off until it’s time to clock off".
People can and do “contribute” to meetings in ways that get them noticed but don’t necessarily add much, if any, value: "So what you're saying is...." (then repeating back what was just said); "We need to focus if we're going to be efficient and effective" (when is that not true?); "I'm not sure I understand what you just said. Could you clarify?" (conveying the impression of being interested whilst hinting "you didn't explain to my satisfaction" and subtly signalling "I'm important and you haven't yet convinced me"…)
People can and do rush around doing 'busy work' to signal that they've got a lot on their plates. I've even met people whose career was built on their reputation as a firefighter – with most of their colleagues blissfully unaware that the fires were ones they’d started or at least failed to put out when they were too small to be noticed by the people they wanted to impress.
Despite the obvious scope for gaming them, I’m struck by how many people still seem to believe that ‘objective’ metrics are the way to solve the problem.
A surprising number of people remain in thrall to the received wisdom of “what gets measured gets done” and overlook the fact (and even get quite annoyed when it’s suggested) that more often it’s “what gets measured gets manipulated”.
When the UK National Health Service (NHS) introduced a target that 95% of patients should be seen within four hours of arrival at A&E (Accident & Emergency) departments, the targets were gamed by: 4
patients being held in ambulances outside hospitals to delay the ‘clock starting’;
rooms and even corridors being designated as acute observation units so that patients can be categorised as having “left A&E”;
patients being admitted at the four-hour point to hit the target, where admission could have been avoided if the patients had been properly assessed.
The fundamental problem with KPIs is that the main things that create long term value in organisations — such as commitment, cooperation, collaboration, etc — are too nuanced to be objectively measurable.
But that doesn’t stop people trying, and failing, by creating simple (simplistic) metrics that draw people’s focus away from actually creating value and onto scoring well on the metrics used to assess value creation instead.
How many of your own organisation’s KPIs kill performance inadvertently..?
When people find out that my degree is in engineering, they’re often surprised that I’m not a big fan of metrics.
Yes, engineering is a discipline in which accurate, objective measurement is vital to the design, build and operation of all sorts of structures, mechanisms and systems.
Lord Kelvin, President of the Royal Society (1890-1895) and three-time President of my professional body, The Institution of Engineering and Technology (IET), crisply captured this obsession with measurement:
“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind.”
However, neither the Royal Society nor the IET point out the fact that in 1896, just seven years before the Wright Brothers first achieved powered flight, Kelvin also said: “I have not the smallest molecule of faith in aerial navigation other than ballooning”.
Another couple of Kelvin corkers are: “X-rays will prove to be a hoax” and “Radio has no future”.
Of course we humans are all unreliable in our perceptions, and Lord Kelvin, as a distinguished and elderly scientist, was at especially elevated risk of falling foul of Clarke’s First Law.5
The organisational obsession with KPIs, and the soul-crushing performance management systems that rely on them, is a legacy from our industrial past where human beings were treated as resources to be exploited, measured and manipulated.
That past led senior executives to become accustomed to dominating decision making: dictating plans, processes and procedures that define the detailed actions to be taken by the ‘hands on the shop floor’, the ‘workers at the coalface’ and the ‘front line troops’.
But however understandably the split occurred between decision making at the top and action taking at the bottom the legacy attitudes and behaviours it spawned now plague organisations as a major impediment to sense making, decision making and action taking becoming well coupled, embedded and distributed throughout organisations.
If there’s one main metric that matters moving forward it’s how well senior executives escape the trap of seeing themselves as ‘decision makers’ and step up instead to the task of creating future-fit cultures.
The world desperately needs them to measure up.
Protagoras (c. 481 BC – c. 420 BC) was an ancient Greek pre-Socratic philosopher numbered amongst the sophists by Plato. The quote of from Theaetetus by Plato section 152a
This is why many managers found the pandemic lockdowns challenging. They no longer had access to these longstanding informal ‘presenteeism’ based indicators.
Impression Management is a term coined by sociologist and social scientist Erving Goffman in his seminal 1959 book The Presentation of Self in Everyday Life.