KPIs are essential to any company’s success. For front-line employees, they provide the guideposts that drive day-to-day work. For managers, they enable concrete tracking of performance against clear benchmarks. And for executives, they facilitate collection of broad trend data essential to reaching strategic targets.
Meaningful KPIs make a company’s goals manifest. When they are implemented consistently, everyone in an organization understands which critical daily tasks move them toward desired results. This also ensures that when priority conflicts arise, there is a useful internal “compass” to inform the use of time and resources.
Every member of your workforce should have 1-3 KPIs to focus on.
In an ideal world, KPIs serve as an invisible “motive force” that drives effort according to each individual’s job role. The clarity created by good KPIs stretches across the organization in an interconnected web that keeps employees’ attention focused on the most important activities throughout their whole tenure.
Building this framework is one of the most crucial tasks that falls to an executive team. As KPIs are defined and introduced, continuous process improvement has a compounding effect on more and more areas of a business.
With all of this in mind, development of new KPIs should be an ongoing concern.
KPI selection and definition are interconnected activities that may take weeks or months in any one instance. They require clarity of purpose and significant deliberation. The quality or absence of data may make this more difficult. However, a rigorous selection process aligned with desired future state will ultimately yield KPIs of value.
More organizations are giving KPI creation the consideration it deserves. Unfortunately, they do not always see the expected results from their KPIs, however well-formed those might be. The reason why is simple: They have neglected to communicate KPIs in a way that sparks buy-in.
Early Adopters And Passive Resistors: The Psychology Of KPI Introduction
Any time a KPI is introduced, it sparks fundamental change among a subset of the company workforce.
A new KPI may mean re-assessing work a person has done for months or years and using that perspective to inform a whole new approach. Combined with additional data entry that often accompanies a KPI, it can seem intimidating or even unnecessary. As a result, not all personnel embrace new work habits with the same gusto.
Tenured employees from any part of the business may feel some initial resistance, even resentment, to a fresh way of doing things. In a siloed company structure, the undocumented “way it has always been” can hold great sway – both because the old way seemed to provide adequate results and because it is familiar or convenient.
Depending on culture, some functions may be more change-averse than others. Fair or not, sales teams have a reputation for being especially tough to bring onboard. That said, there is no telling prima facie just how any employee will respond to a new KPI. Introducing one must be understood as an act of persuasion.
The idea that different constituencies will have markedly different responses to innovation comes to management science from communication studies, especially the work of Professor Everett Rogers. First published in 1962, Rogers’ Diffusion of innovations introduced the Rogers Diffusion Curve, depicting the range of responses available to individuals when presented with a novel idea, product, or process.
As described by Professor Henderson at the link above, the core conceit of Rogers’ work on diffusion is that innovation is a process realized through a social system. Change cannot in and of itself be imposed by fiat, and groups will respond to it in accordance with their innate level of openness to change.
In KPI introduction, as in change management as a whole, the greatest number of people will do their best to adjust to changing circumstances. KPI sponsors should be alert to those on the far ends of the spectrum, as their activities can have an outsized impact on the rest of their team or department.
In the business context, these extremes are represented by early adopters and passive resistors.
Who Is An Early Adopter?
In a business context, early adopters are often coterminous with high-potential employees. They feel a strong internal motivation to understand what aspects of the business are within their scope of influence. They may view new KPIs positively as a quantitative way to demonstrate performance improvement on their way to more responsibilities. In general, early adopters are found among your most engaged employees.
Who Is A Passive Resistor?
The opposite extreme to the early adopter is the passive resistor. Unlike in the conceptual model proposed by Rogers, this is not simply a “laggard” who will come around to innovation in his or her own time. Instead, the passive resistor undermines KPI adoption through lukewarm compliance against the spirit of the endeavor. He or she may actively complain about changes and attempt to incite resistance in others.
Six Steps To Introduce New KPIs Effectively
Any organization is sure to have a mix of different personalities all along the Rogers Curve. These best practices equip you to communicate across boundaries, respond to potential objections, and galvanize more support:
1. Clarify the “Why,” Not Just the “How”
The best KPIs have a robust connection to your mission and values. The communication plan for a new KPI roll-out should include its value proposition, a statement about how things will improve for teams and customers.
2. Name KPI Sponsors Early In The Process
A KPI sponsor is a leader who takes an active role as the “face” and “guiding hand” of a new KPI for the first few months. High-visibility senior leaders having strong EQ and fluency with performance data make good sponsors.
3. Roll Out KPIs Affecting Smaller Groups First
KPIs should be precise and relevant. Few or none apply to every employee. It is wise to start off by introducing KPIs with a relatively small footprint: Dozens, not hundreds. This provides lessons learned for larger roll-outs.
4. Open Channels For Regular Feedback
In any organization, employees appreciate feeling that their voice is heard. One useful role of a KPI sponsor is to solicit feedback. He or she can also brainstorm with employees to help them overcome KPI-related challenges.
5. Recruit Early Adopters As “Evangelists”
Early adopters who have enjoyed success with new KPIs are natural ambassadors within their team, division, or department. They can often provide useful information on the general sentiment around recent changes, too.
6. If Necessary, Remove Resistors
KPIs are bright-line signals about the future of a company’s culture. All employees should find their way to embrace necessary change, even if they have a rough start. If this proves impossible, terminate the employee.
By fostering clarity and reducing friction, your carefully crafted KPIs can enjoy enthusiastic adoption – contributing to a more engaged and productive company culture. When KPIs are central to culture, they fuel ongoing progress toward an organization’s best and most adaptive self.
To find out more about change management that makes a difference, contact us at Equal Parts today.