Now Is Not the Time for the Key Performance Indicator

Written by CultureCon Guest Blogger Stephen Kohler

I am sure that I just heard some executive jaws drop. Or was that a sigh of relief? 

This is controversial, I know, and as a former Director of Strategy, MBA, and Executive Leadership Coach certified in Balanced Scorecard techniques, I love the “what gets measured gets done” attitude. 

But I also reflect on Mark Twain’s quote about statistics, especially at a time like now. He said,

“Most people use statistics the way a drunkard uses a lamp post, more for support than illumination.” – Mark Twain

KPI’s are ultimately answers to questions we’ve posed regarding the direction and traction of our business based on the past.  Covid-19 has arguably proven that the questions we’ve posed – and activities we’ve been measuring through KPIs – may no longer be valid.  And what we need right now is illumination.

I have spent the past three months talking to leaders about how to manage through these trying times. Some managers are struggling with communicating with teams who are working from home. Others are dealing with how to respond to seismic changes in their industries. And still more are wondering if this pandemic is a death blow to business as they know it. A multitude of new problems – big and small – are challenging employees up and down the chain.

When changes of this magnitude happen, we all naturally seek out some way to measure our success. Invariably, we focus on those things we can quantify – like the mighty KPI – a stalwart in the way we determine whether an employee or organization is doing what they are supposed to.

But what is your team or organization supposed to be doing? 

Before we delve into this further, let’s look at three reasons why your old KPIs may not be right for your organization or team at this time. Let’s consider these key questions:

1. Are your current KPIs lagging or leading indicators? Put simply, how much is past performance informing the present goals? I suspect, a lot. And if your reality today is appreciably different for your business due to COVID-19, then it is unlikely your past metrics are going to be a reasonable expectation for future performance. Furthermore, it is tempting to believe that KPIs are, in and of themselves, purely objective. Avoid the mental trap of thinking that data and KPIs are devoid of the assumptions which are pre-baked into them.

2. Are your KPIs helping or hurting your ability to be agile as things change? I like to make music analogies to help people wrap their minds around more abstract concepts like this one. Imagine being a conductor of an orchestra and giving sheet music to a musician and telling her to master it note-for-note. You are the director and she is the employee, so she will try to faithfully execute it, as you requested. Her pay and even her livelihood depend on it. Now let’s take that same musician and throw her into a jazz ensemble with the same marching orders and sheet music. In jazz, improvisation is not just prized, but required. How well do you think she will do? Will she have the skills, mindset, or the permission to be successful in this new environment?

3. Do your KPIs motivate and connect your team? Some people may face bigger impacts compared to others during this crisis – kids at home, underlying health conditions, or even a requirement for people in certain functions to completely re-work and adapt all of their plans and maybe even their own skillsets. In order to weather these personal and professional challenges, leaders need to balance accountability with empathy. If your KPIs are getting in the way of that, I promise you that you will not enjoy employees that go the extra mile and pull that rabbit out of the hat, as it is so desperately needed right now.

Instead of the KPI that you will die on the sword for, I recommend that we replace it with two other tools to keep your team aligned, agile, and motivated. Roger Lowenstein, author of Buffett: The Making of an American Capitalist, said that “Buffett found it 'extraordinary' that academics studied such things. They studied what was measurable, rather than what was meaningful.” But how do you know what is meaningful?

1. Revisit your mission and vision. It is time to dust these off and perform a review. This doesn’t need to be a big corporate year-long strategy activity, but taking a look at the big picture to see if things have changed is critical. For example, if you are a company in the event industry, and your mission is to create “in-person educational and networking experiences,” your overall mission may not have changed, but how you execute them will need to adapt. Reminding yourself and your team what you are about at the core is key to picking a starting point for creatively adapting as needed.

2. Re-commit to your values. During times of stress, our values get tested. Values are the foundational blocks guiding how you lead. You may need to make some tough decisions, but make sure they conform to your values. Your team will remember it well into the future, and it will affect how much they are willing to follow you.

3. Develop Leading Performance Indicators (LPIs). – I still believe measurement is critical. Data can help guide us as we figure out what adaptations are working. I just want to make sure leaders realize it can be a cudgel to creativity and the permission to think outside the box. It can also be very de-motivating if they are presented as a failing grade. So, while I encourage measurement, make sure your team knows that your LPIs are guideposts. Review their feasibility and whether these measures are appropriate more often than you might have pre-pandemic, and adjust them when needed, in collaboration with your team. This way, you will make sure that your metrics keep your team focused on the overall mission, not just the b-flat in measure 3. You will also reinforce that you are truly all in it together.

“Not everything that can be counted counts, and not everything that counts can be counted...” - Albert Einstein

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About the author:

Stephen Kohler, Audira’s intuitive founder and CEO isn’t your ordinary executive coach or strategic thinker. He is a University of Chicago MBA-trained executive with P&L experience who led global marketing and strategy departments for several blue chip and industry-leading brands such as Weber, Kraft, and Shure. Seeking to focus his career more on the people side of business, where the true power of every organization resides, Stephen founded Audira to help people find clarity, direction and purpose in their work.

On top of an accomplished business background and an immense network of functional and industry professionals, Kohler holds a BA in philosophy from Northwestern and is a passionate musician. The common thread here, which is woven into the fabric of Audira, is a desire to see people work authentically and in concert to achieve a meaningful goal. Stephen knows what magic can happen when people are all listening to each other and contributing.

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