Thursday 1 July 2010

Performance Management - Just fight crime, Theresa May tells police


With huge pressure expected on police budgets, Theresa May the Home Secretary has announced that the last of the previous targets will be dropped to let the police get on with the job.

That’s great, but how can this be reconciled with “If you don’t measure it you can’t manage it”? That’s an important question. Should every business and organization in the land follow suit and drop their KPIs (Key Performance Indicators)?

It would make a mockery of the concept of KPIs. So are KPIs good or evil?

Well it depends how they are implemented:
  1. There are two types of KPIs – KRMs and KPDs (results and drivers respectively). It’s important to understand which, and have a balanced set
  2. Key means key. Just a few KPIs that make a difference to the business at each level of management, and in each area.
  3. Use them appropriately. For example “public” league tables tend to polarize participants into getting better and getting worse, which is rarely what’s required. Just publicly announcing this week’s “winner” would be a better motivator, and discuss other performances privately.
  4. Watch out for fractions where reducing the denominator at the bottom has a bigger influence than actually doing a better job (e.g. artificially reduce reported crimes to improve % of reported crimes solved)
  5. Make sure data collection is practical. The key problem with the police is too much time has been spent doing paperwork. In any organisation there has to be a better way to be able to collect data needed for KPIs.
When KPIs are well implemented they can transform a business or organization to concentrate on what’s important, and produce the results that matter. Cultural issues and change management are as important as designing the KPIs.

There’s also the matter of how KPIs are communicated. Gauges in dashboards are becoming increasingly popular, and here’s an example of putting speedometer dials into Excel to compare actual against target performance.

What’s your view?

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