What Gets Measured Gets Done: The Double-Edged Sword of KPIs

One of my first bosses would often trot out a mantra of “what gets measured gets done” when deciding which Key Performance Indicators (KPIs) we should use. This saying reflects a fundamental truth in management: the metrics we choose to focus on can significantly influence the behaviours and outcomes within an organisation. While this approach is essential for tracking business health and performance, it is crucial to consider the unintended behaviours and outcomes that certain KPIs may generate, which could lead to suboptimal results.

During my tenure as Finance Director of the UK’s largest estate agency chain, I spent considerable time contemplating the implications of driving estate agents towards specific KPIs. In a sector where financial rewards are often tied to performance metrics, it became evident that a singular focus on certain KPIs could lead to unintended consequences. For instance, if we incentivised agents based solely on the number of properties sold, it could result in a range of undesirable behaviours. Agents might prioritise quick sales over long-term relationships with clients or may even resort to unethical practices to meet their targets.

While these discussions often took on a light-hearted tone, it was clear that the implications were serious. The world of real estate is built on trust, and if agents compromise their integrity to achieve a KPI, it could damage the reputation of the agency and erode client relationships. This situation illustrates the importance of having a balanced set of KPIs that not only drive performance but also align with the organisation’s core values and long-term objectives.

Recently, I encountered a situation that underscored this principle in a more alarming light. An organisation I observed was relentlessly pursuing a specific KPI a political measure that, while seemingly innocuous, was steering decision-making in a potentially dangerous direction. Operational management recognised the corrective actions necessary to mitigate risks associated with this KPI and advised leadership accordingly. However, the persistent drive to meet the political measure overshadowed these warnings, creating a situation where the consequences could prove tragic.

This scenario serves as a powerful reminder of the potential pitfalls of a KPI-centric approach. When organisations become fixated on achieving specific metrics, they may overlook the broader context in which those metrics operate. It is essential to ask critical questions eg. what behaviours are we incentivising? Are we promoting a culture of transparency and ethical decision-making, or are we fostering an environment where short-term gains take precedence over long-term sustainability?

Moreover, the pursuit of KPIs can lead to a phenomenon known as “ticking the box.” In this scenario, employees focus solely on meeting the metric rather than understanding the underlying purpose of the KPI. This can result in superficial compliance rather than genuine performance times, they may rush through calls to meet the metric, ultimately sacrificing the quality of service. Instead of fostering a customer-centric approach, the KPI inadvertently encourages a transactional mindset.

To combat these challenges, organisations should consider implementing a more holistic approach to performance measurement. This involves selecting KPIs that not only reflect financial outcomes but also incorporate qualitative assessments of performance. By including measures that evaluate client satisfaction, employee engagement, and ethical conduct, organisations can create a more comprehensive view of success.

Additionally, it is worth investing time in contemplating the unintended outcomes of the KPIs we choose. Engaging in discussions with stakeholders across the organisation can provide valuable insights into potential blind spots. By fostering a culture of open dialogue, organisations can collectively identify measures that align with their mission and values, ultimately leading to more sustainable success.

In conclusion, while the mantra “what gets measured gets done” holds merit, it is essential to approach KPIs with caution and foresight. By recognising the potential for unintended consequences and striving for a balanced set of metrics, organisations can enhance their decision-making processes and promote a culture of ethical performance. As we continue to navigate the complexities of business, let us remain vigilant in our pursuit of meaningful measures that drive not only results but also integrity and trust.