Why your KPIs are killing your innovation

And yet. Innovation and KPIs are joined at the hip. I love to tell my customers “Show me your KPI-structure and I will tell you exactly how innovative you are”. How? Most companies are severely historically biased when it comes to KPIs. They are just evaluating themselves. Their perspective is inside out, and failing. But why would a company rate its success on a purely internal basis in a market evolving, growing, metamorphosing and back-flipping at breakneck speed? It’s like driving in a car at 80 km per hour and being very smug about the fact that you keep accelerating since you started. But the thing is that the other cars are moving at 150 km per hour and speeding up a lot faster. Basically, everything is great until you look outside. If you are THAT company, you’re dead.

And not just because you are not looking at the market. Above all, you’re dead because you are not paying attention to your customer. Ask yourself this question: how can you expect your employees to be 100% customer-driven, if their performance and their rewards are not connected in any way to the customer? If your KPIs are about processes, efficiency and speed, however can you demand from your employees to go the extra mile for your customers, much less to make time for them? If there is one thing that should be measured today, it is your customer: what he is doing, where he is going, what he is saying about you, what he’s writing about your competitors,… Your customer is your success. He should be your biggest metric. Only if you integrate this kind of thinking, will your employees play the part.

Last but not least, if you have fixed KPIs that are treated like stone tables, you’re dead too. I keep repeating the word, because I know how slow this innovation – KPI connection tends to be sinking in. Dead. There. I said it again. Moving on. Sales today is definitely not what it was yesterday, and it will be something entirely different tomorrow. Your customer is as fickle as the Belgian weather (the word fickle does not do it justice, to be honest). Your trusted supplier might become your biggest competitor in the weeks to come. You see where I’m going. You need to be innovating right along with them. When everything keeps changing, you really do not want your KPIs to remain the same. If they do, you are probably measuring things that are no longer relevant.  

In short: if you are still using old, internal and static metrics, time to show some guts. Time to completely rethink your KPIs, and on a permanent basis. If not, you’ll be in the gutter, soon. Or dead. (Yes, that’s five).

Would you like to find out if nexxworks can help you redefine your KPIs? Contact booking@nexxworks.com.

Picture credits: JD Hancock (Flickr).