In KPI, K stands for Key


Summary : Any project must have KPIs. At first sight, defining indicators is an easy things but observation shows that it’s the contrary, most of all when it’s about a new field that is still being explored. But the problem with wrong KPIs is that, in addition to measuring the wrong things, may bring the project off the road, make success look like failure and failure like success. If anyone can find lots of indicator, the common misunderstanding is about their “Key” nature. An indicator is not key because of the importance of the project, the ego of the project manager or even because it’s an indicator. It’s key because it’s linked to the corporate project, because it makes and gives sense and because it proves an actual progress.

One can’t manage what one can’t measure and once one has invested anything in something it’s logical to try to know what came in return. Considering these wise words, organization add KPIs to all projects. Social and 2.0 ones are not exceptions. I know that many people says that, in this field, believing is enough but if faith can be helpful to start things it seldom helps to find one’s way along the path.

At first sight there’s nothing easier than setting indicators, most of all when organizations have the habit of measuring everything that’s measurable and build dashboards that look like we can be found in a plane cockpit. The result is  known ; no one understands them. Setting relevant indicators in a new field, where experience often lacks is a real challenge.

So let’s consider each point of the question, the one after the other.

• Indicator : everybody knows what an indicator. Anything that can be measured, evaluated, assessed is an indicator.

• Performance indicator : knowing that measuring everything causes nothing but confusion, it’s logical to select indicators that focus on performance. Should it be about the overall performance of the performance of the project ? I think the right choice is the second one, because of what follows.

• Key Performance Indicator : there’s a lot to say here. There’s few consensus and understanding on what ky means, what can lead to horrendous mistakes.First, there are people for whom “KPI” is so a part of the common language that they don’t see any difference between I, PI, and KPI. So they often end up with 25 KPIs that mean nothing.

The same result can also be obtained by another way : when people think any indicator is key. The previous case is caused by a vocabulary mistake, this one by misunderstanding. Measuring anything because it’s measurable should not pull the wool over our eyes. That’s because something is key that it should become an indicator, indicators not being key for the only reason they exist.

Before going deeper into this point, let’s mention the third situation : linking the “key” nature to the person (even if it’s not the most common situation). I happened to ear “what I do is always key because I’m the boss. My projects and their indicators are key too because it comes from me and is more important than anything else”.

In fact the “key” nature est the consequence of the direct link with the corporate strategic plan. It shows the contribution of the project being measured to something bigger that is supposed to make sense for anybody. There should not be any need for explaining why a Key indicator is key : it should be obvious. If not, it means either the indicator is not key, the project does not contribute to the corporate plan or the plan in not understood by employees. In some ways a key indicator does not measure the project but its contribution to the corporate plan.

So, it’s logical to have lots of I, some PIs and only a few KPIs.

Now, let’s figure what it means in a common and concrete situation.

Imagine a classical “2.0” project, let’s say an innovation community. Let’s find out what KPIs, PIs and Is could be.

• KPI : the number of ideas provided by the community and being executed, number of ideas actually implemented, the money made or saved because of these ideas could be KPI. I say “could” because if innovation is not a part of the corporate plan, if its contribution to business is not clear or if it’s project launched under the radar, we’ll need to find other KPIs…if they exist. It may also make people realize that the lack of link between the project and the corporate plan will make it hard to find anything key.

• PI : the number of ideas could be a good indicator. It shows that the system works without saying it contributes to anything. It’s an intermediate indicator that tells how effective the project is.

• I : the number of discussions, members, comments, votes…are basic internal indicators that shows the system is alive without promising anything more.

Of course, the three kinds of indicators matter, but each one at a given level, for given people. If Is show poor results, few chances KPIs will make one smile.

It reminds me of a person telling me how uncomfortable he was with the KPIs of internal projects that were submitted to him. In fact, these projects having nothing to do with the corporate plan he was only given PIs, not KPIs.

Last point. That’s not because a project has no KPI that it should be shut down. For instance, pilots projects, experimentations. The ambition can be limited for the time being necessary to show “things can work”, and the mechanisms that make business make the most of the social activity could be postponed. In this situation, having good PIs is great. Once the promise verified, it will be time to add the K. The only risk is that the lack of link with the bigger corporate picture, of sense, limits motivation and the ability to reach a critical mass. In this case, the project will only rely on conviced and passionate people. That’s not a problem if these elements of context are taken into account when it will be time to debrief and draw conclusions, positive or not.

You may also be interested by reading what I once wrote on measuring social networking platforms.