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Performance measurement isn’t a post mortem, it’s a health plan. To make our organisations healthier, KPIs are useful only when they monitor the journey, through time, to better health. Not just the destination.

Too many KPIs or performance measures are set to tell us whether or not something happened. Imagine if we only used measures about our health to tell us whether or not our blood pressure is out of control, or our bad cholesterol is dangerously high, or a hormone is off the charts. We’d know something, but it would be too late. We’re already unhealthy.

It’s much more useful in health to measure important health indicators regularly, to give us the opportunity to intervene before things get out of hand, to learn about what works best for us, and to enjoy the confidence that comes from seeing even small steps of improvement in the right direction.

How’s it any different in monitoring the health of business? Don’t we need KPIs to tell us where things are heading, before they’ve gone too far the wrong way?

Performance means a perpetual process of improvement.

We monitor performance in business because we want to be sure that our decisions are making things better. These decisions are about things like allocation of resources, improvement of skills, redesign of processes, investment in new technology, and so on. If we make bad decisions, we know that the organisation won’t perform well.

But business is complex. Both the internal and external environments have so many working parts that it’s impossible to control anything in pursuit of excellence. At best, we can influence. And because our business environments are also constantly shifting, our influence has to shift to keep up. Like they say, you can never stand in the same river twice.

So organisational performance is a never-ending process of responding to change. It most definitely does not conveniently happen once a year.

Measuring in time has a different purpose to measuring through time.

Have you noticed how much we love to talk about the weather? How today’s temperature compared to yesterday or the same time last year. How much rain we’re getting, and whether this feels like a lot more than in the past. It’s an example of a habit that may have ingrained our automatic defaulting to make point-to-point comparisons. We love to notice change, but our brains are not wired well to notice the flow of change over longer time frames.

Our point-to-point comparison habit echoes into how we look at KPIs, and why in-time KPIs are still more common than through-time KPIs. But there is a distinction, and it’s important to appreciate it if better performance is our reason for measuring.

Experiments are used to determine whether or not a drug works by comparing among test and control groups. This is why we measure in time: to find out whether or not something is likely to work. For example, we can do the same to compare different ideas we might have for strategic
initiatives to increase employee engagement.

Another type of experiment is used to determine if a drug continues to work by comparing along a time frame within the same test group. This is why we measure through time: to find out how well something continues to work. For example, we can do the same with our chosen strategic initiative, to find out how much it continues to increase employee engagement as time goes by.

In-time measurement is still useful, to diagnose and analyse the causes of, or constraints on, performance. But when we’re measuring in-time, we’re measuring something other than performance. Since the essence of managing organisational performance is a never-ending process of change, measures of performance must be through-time to be useful.

Turn your in-time measures into through-time measures in 3 steps…

If you have too many in-time measures pretending to be performance measures, here are three steps to upgrade them (and one step to create through-time targets for them):

1. Check the result you’re trying to monitor, and make sure your measure is direct evidence of it. If not, you may have the opportunity to create a through-time measure from scratch.
2. Rewrite your KPIs or measures so that it’s clear they are monitored through time.
3. Choose a frequency to monitor each measure through time that makes sense for the result it’s monitoring. Not too often, and not to seldom.
4. Set targets for measures that are realistic in respect of how long it will take to influence the result (and therefore the measure) to change.

Shifting our attention onto how we can influence performance over time is so much more interesting, engaging and satisfying that just using measures to judge the end result.

If your only reason for measuring anything is to prove whether or not it happened, you’re going to find that it did not happen more often than it did.
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TAKE ACTION:

What proportion of your current KPIs are through-time versus in-time? For those that are in-time, follow the steps above and see if you can’t come up with some more useful measures that drive more improvement.