Performance Indicators - Missing the Key

As the saying goes, "what gets measured, gets done", we have instutionalized a number of measuremens and mechanism to keep track on stuffs with the business operations. Good, but beware that we might loose sight of the real purpose.

In a breakfast with a colleague manager of mine a few days ago, he was appreciative about how much lot of data that we have been collecting in day-to-day operations. People do follow procedures to get the data and information expected from them. Yet, he complained, how little analysis that our guys are doing with those data. If they managed to spend some time doing some analysis, there could be a lot of improvements with many activities be done differently with more effictive and efficient.

As we measure things, we would like to track those contributing to the "success factors". Stemming out from organizations' Vision-Mission, Stretegic Goals, and Objectives comes CSF - critical success factor. It then is further quantified into KPI - Key Performance Indicators, supposed to be the selected few that we shall focus on for a prticular business domain to breed expected success. In practice, I often found that it's too many details to measure and review in a given time that business leader could be distracted, lacking the information focus. The key is lost deep in the the ocean of oprational information metrics.

One of our guys was struggling to collect data and figure out KPI for the IT shop that he should submit to a regulatory body. It consists of 10 category of the so-called KPI with each containing 3-4 items to measure. Overall, it deals with 30 to 40 metrics that we called key performance indicators! And there are more than 10 completely-different companies (and at corporation level, be comptetitot to each other), oil and gas, that the IT shop shall submit this KPI to the IT dept of a regulatory execution body that monitor oil and gas companies. While the idea is 'noble' to have a meaningful collection of metrics to compare and benchmark, the number of KPI is too much to a non operating body to challenge the information for any strategic decision making.

To stay on top, to possibly make any necessary strategic direction, I suppose that 3 (three) top categories are enough to start with: Cost Performance, Value Creation and Realization, and Synergy and Collaboration. With 2-3 items for each category, the energy can be directed to the focus of guiding the proper IT investment and leveraging it across for the benfeit of all. As such, it would not interfere with details of business operation of each competing company. Still, the regulatory body, repressenting the host government as the major stake holders, could still stay on control.

Unfortunately (fortunately ?), I was somehow get involved in the process - although a bit late coming into the game. It was too late to re-direct the whole things. or probably, it's just better the stay the course. Just make sure that we do not just collect all data possible without a clear path forward to act on them. The end in mind shall be then - "compare and decide", not just "review and store".

A similar reminder from an articel in HBR (Harvard Business Review), Stop Making Plans, Start Making Decisions. Debate and Decide, instead of just Review and Approve. And remembering Pareto, get focus to the vital few, as not to miss the key in trivial many.