Kpi’s are not targets, targets are not kpi’s

If you read my last rant you will know how the wrong use of words gets me going (well, I’ve lived long enough to have earned the right to be grumpy)! Having clarified the difference between equal and the same I now move on to explain why not understanding the difference between targets and kpi’s is downright dangerous.

We live in a target-driven society. Government ministers love targets; they don’t understand them but they love to invent them, move them and change them. They symbolise assertiveness; it is a very useful ploy, setting ill-conceived targets creates so much confusion and waste that they can distract attention from what really matters until it is time to blame someone else for the mess. (Oh dear, there goes Mr Grumpy again). Seriously though, it is a real pity when organisations don’t get it right; it gives the whole subject of setting targets and kpi’s a negative image, it makes setting out to do it right so much more difficult.

So, what is the difference between a target and a kpi, and what does it take to make them valid and useful? The answer is simple, I’ll explain with a simple analogy.

Imagine you are going to the south of France, you are going on holiday and you will be driving; (I do it a lot – imagining that is). It stands to reason that you will know exactly where you are heading, when you plan to get there, how you will recognise when you’ve arrived; these are your TARGETS. From the outset they are agreed, concise and understood by everyone. (No wise cracks here, Mrs Navigator could read this at any time)! Of course you have similarly defined, communicated, understood and shared targets in your organisation; don’t you?

Before you set out you will have planned the route; the way points that let you know you are heading in the right direction, the stop-overs. You will have also worked out a budget for fuel, meals, hotels; you will monitor these throughout the journey so that you maintain your schedule and keep within budget. If there is any deviation from the plan you will spot it and take corrective action in time to ensure that you meet your targets; these way points and measures are your KPI’s. Again, you will have similar indicators in your business, ones that help you monitor progress, spot deviations and take timely corrective actions en-route to your targets; what are they telling you?

With any luck you will have shared the responsibilities; who will drive when, who is responsible for planning fuel stops, who is watching the route, who’s keeping the kids quiet; (I prefer to drive). In other words there will be delegated responsibilities; the success of the journey will be ensured by everyone understanding the targets and their role and doing their bit. Just like your business then!

Of course, you will not change your destination when you’re half way there (unless there is an unavoidable external event), you will not change the route so that you can no longer arrive on time, and you will not introduce other objectives that distract you from getting there. (Are you taking note, Minister)?

The principle really is that simple. You can’t set valid kpi’s unless you already have clearly defined targets; those targets must relate to a clearly understood and communicated objective. Kpi’s are simply indications along the way that tell you if you are en-route to achieving your targets; their usefulness is not in reporting status but in enabling you to identify deviations and to take corrective actions promptly so that you don’t miss your targets completely.

And you don’t introduce new targets as a knee jerk reaction or unless there is a significant change that is outside your control.

Now Minister, where would you like to be taken today???

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