Today’s guest post is from Bernie Smith. Bernie is a measurement specialist who has helped his clients deliver surprising levels of improvement across a wide range of industries over the past 15 years. His mission is to help clients with a repeatable, practical and jargon-free method for generating insightful and clear KPIs and management reports. He understands that most people don’t get excited by KPIs, but believes it’s a curable condition.
Most people seem to agree that measuring things is a crucial part of improvement. But this can all go horribly wrong very easily. Why? Because humans are clever and it’s easy to set up terrible measures. Here’s an example:
A favorite in the UK Financial services industry is “number of complaints”. This is encourage by the regulator, the FSA. This sounds like a reasonable measure, until you realise a complaint can be anything from “You used the wrong title on my bank statement” through to “You lost my life savings and made me go bankrupt”. Either of these would count as “a complaint”. What do bank complaints departments do? Of course they focus on the root cause of low-impact and easy to solve cases, at the expense of the difficult high-impact complaints. The raw “number of complaints” figures give no indication of the severity of the issue, so the banks focus on minimising the complaints count, not the impact on customers. What does this do to the reputation and popularity of banks? I think we already know the answer to that…
There are two things you can do to avoid this kind of trap:
1) Ask yourself, what is the stupidest thing a person could do to make this score go in the “right” direction?
2) Ask the people that you are measuring what problems they could see with the measure (and ask them question 1 while you are talking)?
If you take these two steps with any new measures you might just achieve the improvement you are looking for.