Chapter 20
The Ten Biggest KPI Mistakes to Avoid
In This Chapter
Measuring everything
Linking KPIs to incentives
Failing to act on KPIs
The use of KPIs is one of the business topics that has been so widely written about and discussed in management and leadership circles that most people think ‘They have it covered’. And yet like most familiar things this familiarity can breed contempt. Below are the ten biggest mistakes people make when instituting a KPI methodology or framework. Avoid them at all costs!
Measure Everything That is Easy to Measure
This is by far the biggest mistake that people make with KPIs – they work out what is easy to measure and measure everything that is easy to measure regardless of its relevance to the business.
Senior executive teams will often brainstorm KPIs and what they could measure. Usually the indicators they end up with will be the ones they have heard of, read about in a management journal or indicators they are already measuring. Obviously this is not the best way to develop KPIs because the resulting list is very often overwhelmingly long, the indicators are not relevant to the strategy of the business and do not answer the most critical questions. ...
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