Based on my blog statistics, one of the most popular performance management articles I’ve ever written is Dirty KPIs: an article is about the challenges of using a metric based on activity rather than outcome. During one of my workshops, I recommended that an attendee use the outcome measure ‘% reduction in complaints about street cleanliness‘ instead of the outcome one ‘# of miles of streets cleaned‘. My rationale for the change was as follows: if the organization is reaching its target for the street miles cleaned but not its target for the number of complaints, it’s probably tracking the wrong activity and unlikely to meet its citizen satisfaction objective.
Not long afterwards, a column entitled “San Jose street sweepers miss mark” appeared in a local newspaper. In it, three separate readers complained about the local street sweepers. While three is a relatively small number, it reinforces that tracking complaints might be critical to improving citizen satisfaction.
Even more telling is that two of the readers claim the street cleaners don’t actually clean the streets. This shows another flaw in using output metrics like ‘# of miles of streets cleaned‘. Sure, the street sweeping machine drove over many miles of streets. However, if citizen don’t believe the result is cleaner streets, it didn’t really achieve any tangible outcome. And, without a tangible outcome, there is no impact. In this case, increasing the number of miles of streets cleaned is unlikely to improve citizen satisfaction. It’s the wrong KPI.
There’s another flaw in the design of this KPI. It considers street sweeping from an internal process point of view (another popular blog of mine). The number of miles of streets cleaned represents a measure of our own activity. However, citizens – representing the customer point of view – don’t care about how hard we worked. They just want their streets to be free of debris.
Many performance management initiatives obsess about efficiency and removing waste from existing processes. However, no matter how efficient processes are, if the customer isn’t satisfied with the result, it wasn’t very effective and therefore should get a poor grade on performance.
Acknowledge effort but reward impact and results.