Are your KPIs really all that key?

Aug. 8, 2011

The industrial maintenance profession is familiar with the idea of metrics. After all, having good metrics is a good way to quantify our successes and prove to upper management that we deserve the funds we now request to pursue other additional equally useful initiatives.

The industrial maintenance profession is familiar with the idea of metrics. After all, having good metrics is a good way to quantify our successes and prove to upper management that we deserve the funds we now request to pursue other additional equally useful initiatives.

Which data should be captured? The answer typically is availability, downtime, MTBF, utilization, total cost of ownership, service level, supply chain data – the list can go on for more space than we have here.

Then, there’s the question of what information should be reported in what format to each stakeholder group. Those outsiders are, in a manner of speaking, your customers. Finally, the ultimate goal is to find a way to best translate the information contained in those metrics into management decisions.

Not all metrics are equally useful. It makes no sense to measure anything for which there’s no practical use or interest in knowing. Some metrics, by virtue of some convoluted calculational method or assumption base (SWAG), are erroneous and can lead you astray.

Don’t panic if you question your own long-standing metrics. Help is at hand in the form of “The 7 Deadly Sins of Performance Measurement (and How to Avoid Them),” by Michael Hammer.

This 12-page document alerts you to the seven common mistakes that you might make when developing or evaluating performance metrics. What seems to be the most important class of metric mistakes is the effect they have on human behavior. You’ve heard to old saying about you get what you measure. This article makes that case in spades.

Hammer gives the two keys that tell you your KPIs focus on the right variables and he gives the four steps to identifying rational, meaningful, truly useful metrics.

Believe me, this one is worth your time.

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