Setting KPI targets
When we set KPIs, it is really important to think about how we actually achieve them. Traditionally, when managers set targets, it drives the behaviour of people to be purely focused on achieving that target- “I’ll get there whatever the cost.” This narrow focus puts the spotlight on short term gains in, for example, productivity or short term modifications of data to achieve the target. It doesn’t make us better and stronger as a business. It’s not sustainable.
So how does a manager really impact the target?
Let’s just say there are several departments or areas a manager looks after. They can see targets are being met in some areas- it appears that it’s achievable to impact the target. But there is an area that’s struggling. Traditional behaviour dictates, regardless of whether it’s the right thing to do or not, that we wait until the end of the month to assess whether we have hit the target. Then it’s not until this time that we ask ourselves- what we are going to do this month, that we can asses in three months, a quarter into the year, to see if we have met our targets? Once again, it’s not until the end of that quarter that we recognise that a target is not being hit. The reality is that these long term targets can cause us to lose focus on one of the most important things in the business- flow. The flow in the business that generates great customer value.
Get to the Gemba
So what can you do as a manager? Well, as soon as you recognise that your team is trending in the wrong direction and not going to hit their target, get down to the Gemba and have a look. Be involved with the team leaders and supervisors in that area. Help them achieve the target incrementally, instead of taking an overall long term perspective to meeting targets for the year. Maintaining a strong focus on the incremental improvements that can be made is what is most important. This improves and promotes flow. As management, your focus must be on Kaizen: the continuous improvement that is generated every day by the practical wisdom of the people who work in the business. This enables your teams to hit the big targets set at the start of the year and drive their potential to deliver value for the customer.
Want to know more? Contact us.