Splitting goal design from KPI design seems like a simple division of labour — until the KPIs miss the mark. Here’s why context and ownership can’t be handed off separately, and who should really be at the table.
It’s not uncommon, in larger organisations particularly, for the senior leaders to write the strategic goals, then delegate the design of the KPIs for those goals to the strategy and performance people. And the result is a lot of wasted time for a set of KPIs no-one really owns.
Of all the strategy and performance people I’ve seen put in this position, more than 90% end up guessing or giving up somewhere along the way. Even when they have the skill to design great measures, they struggle because they’re being asked to translate a goal they never had a hand in shaping.
The fix for this isn’t complicated, but it does mean rethinking who needs a seat at the table when KPIs get designed.
Three problems create the strategic goal-KPI gap
Here’s what actually goes wrong when goal-design and KPI-design get split apart.
Firstly, context doesn’t travel through a handoff.
When goals are set in one room and handed to another room for KPI design, whatever shaped the thinking behind that goal — the real intentions, the subtle nuances, the hard trade-offs — doesn’t travel with it.
“Build the capability of our people” sounds quite familiar; most organisations have a strategic goal like this. But in an automotive sales company that has failed to attract and develop its workforce to meet even the basic role requirements, the context of such a goal is very different compared to a defence agency that must prepare its workforce to meet a new era of national security threats.
Secondly, even well-intentioned goals can be obscured with weasel words.
‘Capability’ is a weasel word. Its definition is the ability or power to do something, but in business it’s used to mean any or all of ‘the right people with the right skills in the right place with the right resources doing the right things in the right way’. There are too many potential performance results in weasel words like this for any single goal to carry.
That’s what makes a word weasely: it has more than one meaning, and the intended meaning is hidden — usually not on purpose, just because that’s how we talk about strategy at altitude.
Thirdly, trust in a KPI comes from having helped build it.
Nobody — leader or practitioner — fully trusts a measure they didn’t watch take shape. Those who own the goal but delegated the KPI design don’t hear the struggle to understand and translate the goal, don’t hear the exploration of potential KPIs, don’t hear the rationale for rejecting or accepting each one.
Just as the KPI designers don’t have the context for the goal, the goal owners won’t have the reasoning trail behind the KPI when it lands back on their desk. We can only own what we’ve had a hand in creating.
Four ways to close the goal-KPI gap
When leaders are ready to set strategic KPIs — or when any owner of a goal is ready to measure it — these four solutions will help to ensure the KPIs are the right ones:
- Solution 1: Include the strategy and performance people as ‘flies on the wall‘ during the strategy design sessions, so they pick up the context and meaning behind the goals first-hand.
- Solution 2: Leaders (or those who own the goal) make themselves available throughout the KPI design process, to answer questions and add detail as it’s needed.
- Solution 3: Leaders write clearer goals, with more description around them, so they’re easier for others to understand.
- Solution 4: Leaders design their own strategic KPIs, with their strategy and performance people alongside them as thinking partners.
Solution 3 should happen anyway, when you think about it. If the strategy and performance people can’t understand a goal, how could the rest of the organisation possibly understand it? But for the purpose of designing great KPIs, hands-down, I prefer that last solution.
The only way I’ve seen KPIs come to life and create real performance improvements is when the owners of those KPIs had a genuine hand in designing them. PuMP Partner Paul Frith goes deeper on this in how to select a team that will build the best KPIs — worth a read if you’re putting that group together.
Our organisations need evidence-based leaders who are deeply committed to their strategic goals, who have a crystal clear vision of how those goals will become manifest in the real world, who can easily help others see that vision just as clearly, and who routinely monitor those goals and prove it as they become reality.
Whichever seat you’re in — leader or practitioner — has this pattern shown up in your organisation? If it’s been a problem, how might you now try to better navigate it?