Measuring what matters - how to use KPIs

We got used to being measured against some goals in early childhood, first in school, then university, and finally at the workplace - either through quarterly performance reviews or our personal business success. 

However, don't just measure but measure what actually really matters. Then, metrics and KPIs will bring you guidance and help achieve the company's, business unit's, and your team's goals.

Rūta Albrektienė, who works with idialogue partners Intrum GBS together to enable operational excellence through shared services, says that:

I used to work with a team and had close to none KPIs and just a few metrics. Sometimes, when I mention it, I get a question "How is that possible"? Well, at that time, I didn't know, that I didn't know. So we worked. We worked hard, and we worked long hours. As a result - we were tired. 

What is measured - gets done

Having smart KPIs would have definitely helped Rūta because what is measured - gets done. As an example Rūta shares that:

Once I got some free time on my hands, I started reading more, and once I started reading more, I raised a goal of reading 60 books a year - that was my personal KPI. Having a goal made me prioritize reading even when I had little time to do that. That was also one of the reasons why on the last day of the year, I was “stealing” some time to myself to finish the book and meet my goal. That is how measuring part of performance (or activity) influences the majority of people.

How to use KPIs

When one starts using metrics and KPIs, they may feel empowered but they also may fall into the trap of "I need that metric as well". Having metrics for the sake of measuring may bring a lot of work, but little value. 

When introducing metrics and KPIs to your team, here's a bunch of questions to ask:

• Why do I need this metric/KPI?
• What do I do with it?
• Do I use it myself, do I report it?
• If I report it - who uses it and for what purpose?
• What value does a metric or a KPI bring?
• What's the difference between a metric and a KPI?

Let’s say that we decide to make email response time our KPI. Target is – 24 hours.

Why do I need this metric/KPI - what value will it bring?

I will understand what is the actual time that a customer needs to wait for the response. I will understand what percent of all responses are sent later than within 24 hours of email receipt.

What do I want to see with this metric?

How many responses are sent after 24 hours of email receipt. How many responses are sent after 48 hours of email receipt.

What will it help me achieve?

Having the information will enable me to do more analysis on the reasons why the responses to emails are delayed.

What do I do with it?

When the desired 24 hour SLA is breached, I bring it up in the daily / weekly meeting and discuss it with the team members. Then, we make action plans on how to avoid that in the future.

Do I use it myself, do I report it?

I use it myself on a daily basis and I report it to my management on a monthly basis.

If I report it - who uses it and for what purpose?

My manager is raising questions about the reasons for delayed responses. They use this metric to understand what influences customer satisfaction. 

What value does a metric or a KPI bring?

It brings visibility on what the desired state is and how far we are from it. It makes everyone focus on a specific task and helps the team to raise improvement ideas.

What's the difference between a metric and a KPI?

A metric is a measurement that doesn’t have a target. A KPI is a measurement that best defines how to achieve a company's strategic goal(s) and always has a target.

If you are looking for inspiration on this subject - John Doerr deep dives into the OKR (Objectives, Key Results) concept. He gives a number of really interesting examples of when OKRs may bring the opposite value than we expect.

If you want to contact Rūta for mentorship you can find her contacts here. If you are looking to learn more about the global business services industry - meet our partners Intrum GBS.