Fact or Fiction - How Good Are Your KPIs?
Key Performance Indicators are great to measure the performance of a project on a regular basis right?
Well what happens if you don't like what they are telling you?
Do you use the indicators as they are intended to indicate how you are performing or do you perform to your indicators? That's to say you have a metric to reach a certain spend each month. (Ridiculous metric on its own but this is a real life example...)
What do you do if your not going to reach your predicted spend?
A: report the deficit, work out why and try to put it right or
B: change something like the sequencing so that you can meet the spend indicator.
Many opt for Option B and I've seen it happen. Teams of experienced people working completely out of sequence, putting permanent works in to then rip it out again and finish the work in the ground that should have been done first just so they can meet the target spend for the month.
Works fine for a few months if not longer. Reports show all the indicators are being met therefore the project must be going well. Right? Well no, of course not.
Key Performance Indicators only work if you use them properly. Put rubbish in get rubbish out. If you run your project to the indicators you have completely missed their purpose.
Run the job and use the indicators as a measure of how well its going. You are only prolonging a problem if you do it any other way. Also make sure metrics are relevant, without this they are just useless numbers and a waste of resource.
First of all its good to plan what you want to get out of the KPIs. Then plan which ones are going to be relevant to the goal. How these are measured is then an important factor, some KPIs really need instant measure but cant provide it.
Let use earthworks as an example as its a common one that's measured.
You want to measure the volume of material moved each day to make sure your keeping on target but don't have the engineering resource for a full 3d survey and volumes each day.
Counting the dumper or wagon loads would suffice for a daily guide with a weekly accurate measure to adjust. Now in this example the weekly volume measure is a check. Its very good to have a check to make sure everything is stacking up.
Measuring productivity on site is a common KPI to measure, as is the number of near miss reports, quality non-conformances etc within a period. But there are some programme metrics that can be measured to help show the health of your project.
These can range from the total float within a programme, a trend of decreasing float should tell you something about the focus on non critical activities. You can measure the total number of links of each type. A swing in different types of link could show that the programme isn't being met so is being mitigated to deliver it.
There's no end to what can be measured but it needs to be relevant. A check is always a good idea as most measurements can be manipulated in some way. Most importantly the purpose of the measure shouldn't be missed. KPIs are there to report how a project is performing, not for the project to be performed to meet them.
Get in contact if you need any help with your KPI production or monitoring.