Throughout Government, KPIs are used extensively by outcomes, reporting and policy professionals. Departments have KPIs, policies have KPIs, staff have KPIs, teams have KPIs, but where is the line between valuable metric of success and numbers for the sake of numbers?
As Performance Management Specialist Mark Hocknell observes, “We use methodologies for most of what we do at work and in business, such as methods for project management or strategy development. But for some strange reason the development of methods for KPIs have been left behind.”
We tend to base this management tool on previous experience or what we have learned from others. ‘John says his team has to have a minimum of two hours of phone time every day, that should be applied to my team too.’
Hocknell says there are four main issues with how we use KPIs:
- “Using gut-feel to determine what our key indicators are.” We need to clearly define the outcome we’re trying to achieve and use this to determine our KPIs.
- “KPIs do not signal the focus area or priority we are trying to improve or get the most traction on.” When you allocate KPIs, you place emphasis on the task or process they measure. This results in disproportionate effort being placed on relatively menial tasks.
- “KPIs are used as targets to ‘manage or reward performance’.” While this can be a genuine method of productivity, it’s equally likely for employees to skew datasets or manipulate them in such a way that they appear successful. (Some of the workers in John’s team probably called their friends to make their numbers look better).
- “KPIs are mixed up with BAU and areas targeted for improvement.” This makes it harder to identify actual focus areas for the business and allocate resources accordingly.
There are, however, eight criteria for a KPI methodology that works, as defined by PUMP Methodology founder Stacey Barr and summarised by Mark Hocknell.
The KPIs should be:
- Necessary, where each part is chosen and designed to replace poor KPI practices that don’t work.
- Founded, where each part has a consistent rationale, philosophy, or set of principles, about what good KPIs are, what purpose they serve, and how they should be used.
- Proven, where the methodology reliably produces KPIs that help achieve goals sooner and with less effort, no matter who uses the methods or in what context they use them.
- Comprehensive, where the methodology assists each step or stage in KPI development, from selection, through implementation, to use.
- Non-prescriptive, where the methodology does not prescribe the KPIs to use, but rather facilitates the user to create the KPIs appropriate to their situation.
- Useful, where the methodology improves people’s experience of creating and implementing and using KPIs.
- Practical, that is, the methodology can be learned, then resourced, and performed as part of the routine work of strategy development, performance monitoring and improvement.
- Transparent. This means that the limitations of the methodology or weaknesses in producing KPIs are known, openly admitted, and continually improved upon.
The measurement of new and existing policies and programs is an important component of delivering positive outcomes for citizens. It’s time for government agencies to transform their thinking and, instead of measuring outputs, become outcomes focused.
The Measuring Outcomes Based Approaches in Government Masterclass is your opportunity to enhance the outcomes you’re delivering to citizens by understanding what needs to be achieved. Led by Mark Hocknell, this masterclass will share strategies to develop indicators that demonstrate progress towards outcomes, engage teams to integrate outcomes into program and policy, and produce strategies to measure progress.
Running in Melbourne from 27 – 28 April, Canberra from 29 – 30 April, Sydney from 11 – 12 May and Perth from 14 – 15 May, secure your seat and come prepared to develop practical performance indicators using proven methodologies that measure outcomes.