I was asked recently by a company as part of their first-round hiring process a question very similar to this:<\/p>\n
How would you establish measurement of the departments under you in such a way that you would have an indication that they are operating well? \u00a0What would these things mean? \u00a0How would you go about setting them up?<\/p>\n
Well, first off: \u00a0I was surprised. \u00a0Not at the nature of the question, but that I was being asked it at all. \u00a0It’s the first time in over 10 years that someone has broached the topic of Key Performance Indicators (notoriously known as KPIs in business-speak) and actually understood what they meant. \u00a0Most companies understand that there are metrics one can use to establish the overall health of a company or department – and that they are wildly different from department to department to company.<\/p>\n
Some just don’t get it at all. \u00a0As an example, at the company I am in the process of leaving, our MD thinks that a KPI is a to-do list. \u00a0Yes, he’s that far away from knowing how to run a business. \u00a0Which might be one of the reasons why it went down… but that’s another story.<\/p>\n
First, it deserves note – why do KPIs matter? \u00a0The whole point in measuring a KPI is to identify critical factors in your business or department and watch them with the intent of fixing them when they show times of trouble, or improving them to better your unit’s output. \u00a0Distilling this concept: \u00a0KPIs provide\u00a0visibility<\/em> into the heartbeat of the business unit. \u00a0Many people (myself included) don’t look at a spreadsheet and say “Oh, I see, got it” right off the bat (in my defense, it takes a few minutes \ud83d\ude42 ). \u00a0But if you can show someone a graph with bars or lines on it? \u00a0Click. \u00a0They get it. \u00a0This is\u00a0especially\u00a0<\/strong><\/em><\/strong>important for board members or executive meetings – not because they won’t “get” the excel sheet (most will, but some wont), but because they don’t have time to dick around pretending they care about the nitty-gritty details of who made what sale or which developer is pumping out the most code with fewest bugs. \u00a0They are being paid to handle a much broader picture, and wasting their time means wasting company money (and it also means probably pissing them off, which will result in first their asking for your excel slide to be removed from the deck, and later probably asking for you to follow your excel slide).<\/p>\n I’m going to hit up a few different sides of the KPI angle, aimed at different departments within IT – and will probably do an overview of one at a company-level as well, in what is to become my first series article here. \u00a0Before I begin though, it deserves a little definition of what a KPI really, truly\u00a0is.<\/em><\/strong><\/em><\/p>\n Let’s start by breaking down its name: \u00a0KPI, is Key Performance Indicator.<\/p>\n KEY<\/strong><\/em>: \u00a0the item, whatever it is, represents a\u00a0key<\/em> portion of your business. \u00a0Without it, things don’t work. \u00a0It’s like your car – if you don’t have the key, you’re screwed. \u00a0You can get by on three wheels, or no seats, or broken windows, for a little while and still get where you’re going. \u00a0But if you don’t have the key, you aren’t going anywhere (notwithstanding the smart-ass “hot-wiring” comment that will no doubt follow, stretching my metaphor too far).<\/p>\n PERFORMANCE<\/strong><\/em>: \u00a0performance represents accomplishment. \u00a0Miles per gallon for your car. \u00a0Consistent placement of a round from a pistol or rifle. \u00a0The oven produces good heat per unit of gas or electricity given to it.<\/p>\n INDICATOR<\/strong><\/em>:<\/strong><\/em> \u00a0a metric used to measure something. \u00a0An indicator light on the dashboard of your car, the CPU meter on some of your screens right now, the thermometer outside your window. \u00a0These are all examples of indicators.<\/p>\n So…when you put it all together, you get an indicator, a measuring stick, of the performance of an item that your department or business can’t succeed without.<\/p>\n There will only be a few items that are “Key” – not everything can be key, because when everything is critical, nothing is. \u00a0Same thing goes for problems and bugs and features (as some readers from past companies will remember me saying this), and it’s worth making an axiom out of. \u00a0In fact, I’m quite certain other people have said it already, but it bears being made into a T-Shirt:<\/p>\n WHEN EVERYTHING IS A CRITICAL EMERGENCY, THEN NOTHING IS.<\/strong><\/em><\/p>\n Some time I’ll go over to Cafe Press and put some shirts together.<\/p>\n I’ve worked at two firms (it could count as three, but I went to work for one of them twice) where I came in the door to a fire-fighting culture that viewed every single issue as a critical make-or-break. \u00a0The situations were each different, but bore resemblance to one another in that they were each driven by some form of “Oh my god, we’ve got a bug, if the customer doesn’t get a fix by five pee-emm then the sky is going to rain\u00a0menstrual\u00a0blood all over us!!” and of course the development staff was tied up doing nothing but fix-fix-fix, and every fix for one customer was considered inconsequential or a nuisance to others, where later it would become yet another hellfire-and-brimstone case.<\/p>\n In their defense, it’s very easy to end up with a bad case of tunnel-vision when that happens. \u00a0As an outsider coming in, I could see very clearly that they weren’t prioritizing and identifying what was good for their product. \u00a0But inside? \u00a0They were so caught up in the day-to-day (and at least one person in each case had made a career out of creating the spaghetti solutions which added more fuel to the fear-mongering fire – which that person used as job security), they couldn’t see an end to the tunnel. Breaking out of that long enough to see how to fix it is\u00a0hard<\/em>. \u00a0Which is why the firefighting culture is often fatal for a company.<\/p>\n So KPIs are a very few things that actually are<\/strong> critical. \u00a0For example, if a company doesn’t sell anything and makes no money, it will die (because eventually investors are going to tell the company to go screw itself). \u00a0So revenue generation would be a good target to choose for a company KPI.<\/p>\n They’re also\u00a0indicators<\/em>. \u00a0As such, they must be measurable. \u00a0That’s not an option. \u00a0I repeat: \u00a0they\u00a0must\u00a0<\/strong><\/em>be measurable. If you can’t measure it, it’s not an indicator, and it’s out the window.<\/p>\n And they measure\u00a0performance<\/em>. \u00a0Performance can be tuned. \u00a0That’s also important – if you’re measuring something you have no control over, it’s not a KPI. \u00a0That doesn’t mean it isn’t worth measuring – many factors over which we have no control exert influence over our businesses. \u00a0It just means it’s not a KPI.<\/p>\n Let’s sum that up now:<\/p>\n A KPI is a measuring stick used to monitor one of a few critical aspects of the health of your business unit with the intent of proactively identifying problems or aiding in the improvement of your unit.<\/em><\/strong><\/p>\n I’ll crank out another article on this in a day or five, I’ll hit up measurement of KPIs as they apply to a Tech Support department. \u00a0I’ll probably add a few items that it will have in common with other call-center type environments as well.<\/p>\n Update:<\/span> \u00a0I forgot to mention something that KPIs are\u00a0not<\/em>: \u00a0immediate. \u00a0The time frame over which KPIs show change is not daily. \u00a0It is at best monthly – and more likely quarterly. \u00a0Most data used by KPIs is strategic – this is not a tactical tool. \u00a0You may observe a shift over a one-week span, but at the rate of weeks, such shifts are indistinguishable from normal noise. \u00a0If you see a shift that looks alarming, by all means pay close attention to the situation, but unless it repeats or worsens over coming weeks it should not be taken as an impactor of the KPI.<\/p>\n Use of a KPI should produce a trending line, which is what gives you something to bring action to. \u00a0Spikes and troughs in the data are to be expected, and can usually be explained by occurrences that have specific causes and durations (i.e., “Call wait time spiked there because we had two members of the team resign while three more were on holiday – so we were temporarily understaffed.”)<\/p>\n Update:<\/span> part II can be found here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" I was asked recently by a company as part of their first-round hiring process a question very similar to this: How would you establish measurement of the departments under you in such a way that you would have an indication … Continue reading