Finding Good (A story of KPI’s)

Over the last few weeks, we’ve discussed the idea that your KPI’s will fundamentally drive behaviours and that the challenge faced by a business is to set their KPI’s to support their Data Culture by driving the behaviours that support and encourage the growth of your business rather than rewarding toxicity.

What is more subtle is understanding that concepts like “Good” and “Bad” do not exist. Humans will adapt behaviours that give them the best chance of survival in an environment. An example mentioned in the video is of the “On-Time shipped %”. As a business, it would be possible to assign Red, Amber, Green bands to the range from 0 – 100% (I am deliberately not going to suggest some here). So if the shipped on time % is Green, what behaviour should we expect? I hope we could all agree that when it’s Green, we can be happy that the teams are working the way they should be working and the Warehouse teams are supported in doing their role. Now let us consider a time when the performance is bad and in the Red? Again, I would expect we can all agree that clear process improvement plans are needed at this point, and you should present improvement progress to management. So what happens when they are Amber? Clearly, the behaviours of Green are inappropriate, but then are the behaviours of Red? What happens when we do the standard Corporate thing and tie bonuses to a KPI around “Warehouse On-time Shipping %”? Does everything stay the same?

%d bloggers like this: