LinkedIn 'Top Voice' in Technology & Innovation | Group Director @ Meta [Facebook, Instagram, WhatsApp, Threads, Messenger, Quest, and more...]
I find it fascinating how many businesses obsess about poorly designed KPIs. It’s easy to have too many… instead of ruthlessly prioritising those that really matter. It’s easy to make them too complex… ending up with metrics no one fully understands. It’s easy to focus too much on output… and not enough on controllable inputs. The last point is arguably the most important. One of the most valuable lessons I’ve learned in my career is that performance has surprisingly little to do with the top-line goals we set... and far more to do with the controllable inputs we choose to obsess about. James Clear summarised this insight well in his 2018 bestseller ‘Atomic Habits’: “You don’t rise to the levels of your goals. You fall to the levels of your systems.” That doesn't mean goals aren't important. They’re a powerful way to drive alignment and commitment across an organisation… but we often forget that failing businesses have roughly the same goals as those succeeding. Revenue, profitability, growth etc… Instead, the difference is in how we approach our controllable inputs; the tasks, mechanisms and processes that will help deliver our goals. It sounds so simple... yet very few business do this well. If you want to improve performance, focus less on your output goals and more on your controllable inputs to deliver them.
Related to the quote in the post, if you haven’t yet read Atomic Habits by James Clear, I can’t recommend it enough. It really changes how you think about performance - in business and in life. Truly excellent read!
The overemphasis on KPIs are often what I call the Credit Strategy. How can I get credit for my work? There are too many leaders who do not understand the mechanics, but also need to justify their positions and salaries so they feel that quantifying (anything) helps to strengthen that position. “Look numbers went up in my tenure.” I find that fewer leaders are staying in roles for longer periods so often policies and measurements are short-term because they honestly don’t see beyond their tenure. Few companies truly build strategically because they are beholden to short-term numbers requirements by executive management or shareholders, or boards. Everyone wants fast and clear so numbers (even vanity metrics) allow people to feel safe in their short-term strategies.
Why everyone needs to read https://commoncog.com/the-amazon-weekly-business-review/ But most people won’t do it, because it’s non-trivial
In the public sector we have the opposite problem: Obsessive focus on the inputs (to prevent corruption) and nominal interest in the outcomes.
Spot on! It's the day-to-day operational excellence, customer service quality, and strategic marketing efforts ect. that truly shape our outcomes. KPIs are important, but they are milestones on the path paved by these controllable factors.
Agree, input metrics are a critical part of driving BAU and project launches - at the same time, input metrics have similar KPI tracking pitfalls as output metrics. - Output metric pitfall: traffic is important, keep increasing CTR, ignoring customer quality/journey. - Input metric pitfall: traffic is important, keep increasing the number of new SEO articles per month, ignoring article quality. Due to their nature, input metrics require smart management of human capital and opportunity costs (e.g. is that last 20% worth the additional 80% of effort). Otherwise, something like your SEO content becomes all AI driven junk as the team tries to hit higher and higher input metric KPIs.
Too many companies/teams fail to identify their Critical Success Factors (CSFs) and therefore they tend to measure everything!!
One approach could be 'measurements by exception'. When the process works as expected and shows zero discrepancies, the dashboard should report only the percentage of abnormalities. A process should have a maximum of three KPIs or SLAs; more than that becomes complex. Cluster processes in end-to-end (E2E) so you can analyze value or results. Use ITIL v3 if your maturity level is low, and consider ITIL 4 if you have a medium to high level of maturity. ---------- 🔍 Follow The ITSM Practice Podcast on LinkedIn for daily insights on ITSM and IT Security. 🎧 Check out The ITSM Practice Podcast on Spotify: podcasters.spotify.com/pod/show/theitsmpractice #itil #itsecurity
Your insights on KPIs are spot on. Businesses often get lost in the complexity and volume of KPIs, missing the essence of what drives performance. Simplifying and prioritizing KPIs is crucial, but as you rightly point out, the focus on controllable inputs is what truly matters. It's these daily actions and processes that shape outcomes. Have you noticed how this principle not only applies to businesses but also personal productivity and habit formation? #KPIRevolution #PerformanceOptimization #AtomicHabits
LinkedIn 'Top Voice' in Technology & Innovation | Group Director @ Meta [Facebook, Instagram, WhatsApp, Threads, Messenger, Quest, and more...]
1wI first learned about this approach when I joined Amazon many years ago. I was fascinated by how little we talked about financial metrics in our internal meetings. It’s was so different to other businesses. Interestingly, Bezos once described this unusual approach in an open letter to shareholders: “Senior leaders that are new to Amazon are often surprised by how little time we spend discussing actual financial results or debating projected financial outputs. To be clear, we take these financial outputs seriously, but we believe that focusing our energy on the controllable inputs to our business is the most effective way to maximize financial outputs over time.” If you’re interested, I wrote more about this approach below. 👇