I know. This blog title is a little more cryptic than usual, but hear me out. Twice in the last two months I saw a post about KPIs on LinkedIn. In both cases the person posting was bragging about their comprehensive list of Key Performance Indicators (KPIs). The last one I saw had over 300! Evidently there is an organization called the KPI Institute that promotes this madness. This is problematic for two reasons. First, these aren’t really KPIs. By definition, they can’t be “key” if there are so many. Since they really were measuring something, I have to admit that they could be considered metrics. But this is excessive, even for metrics. So, the second reason is just the sheer number. I don’t believe for a second that this many metrics are actually useful.
OK, so where do the ants come in? Well, while reading the post I came up with an analogy. Let’s say I have an ant problem. Specifically, there is a bit of an infestation in my back yard and ants are invading my home. I hired an exterminator to assist, and I want to come up with some KPIs to determine if the problem is effectively “managed”. What would those be? If I follow the lead of “300 KPI” crowd, I could certainly come up with a bunch of things to measure such as: 1) number of ants seen in the kitchen at noon each day 2) number of live ants seen in the kitchen at noon each day 3) number of dead ants found in kitchen each day 4) the ratio of live/dead ants each day 5) the number anthills in the back yard 6) the number of exterminator visits 7) the amount of poison used by the exterminator 8) the cost per gram of poison applied 9) the monthly number of ants killed 10) the cost per month for the exterminator 11) the cost per month per ant killed. I don’t know if I could come up with 300, but I could continue for a while in this manner. The person that posted about 300 KPIs used the old quote “what gets measured gets managed” to support this approach. That quote doesn’t mean that EVERYTHING needs to be measured and managed to the nth degree! It is better to identify the few things that have impact and measure and manage those. Focus. Simplify. In the case of the ants, I would suggest the following three KPIs to determine effectiveness of the exterminator. 1) Number of anthills at the end of the month 2) Average diameter of anthills at the end of the month 3) Monthly exterminator cost. By determining if these 3 are trending up/down, I will have a pretty good idea if the ant problem is being managed well and is cost effective. Sure, there are (many) other things I could measure, but these three alone are enough to make decisions about how to proceed. The actual number of ants becomes irrelevant.
KPIs are about simplification. The whole point is to have just a few measures to determine if the organization is on track. The minutiae detract from this and prevent management from focusing on the few issues that really matter.
Don’t count the ants,
Dave