Monday, August 31, 2009

A Key Performance issue: Design of KPIs

Working on performance issues of a Dutch MNC in Malaysia.
Issues are (of course) more Malaysian than Dutch. The big ones?
- One, KPIs are loosely defined... basically each Manager is left to set their own KPIs for their team. There's no 'roll-up' in to the company's objecitves - at least the's no process or system to ensure this happens.
Working on this, I found the concept of Value Tree extremely helpful. Ever tried that? Simple and powerful concept. Start with your vision / value / objectives and go on drilling down layer by layer to factors contributing to it. (Six Sigma types will recognise the Transfer Function here; {Y = f(x)}. When you reach specific activities or a point where the responsibility lies with a specific Manager, list out the KPIs. I'm not yet comfortable with the linkage with KPIs. Got to pilot in real life and check-out. Maybe for my next entry!
- Two, No rhythmic / regular follow-up on the KPIs. There is of course a generic, informal, "how is it going?" kind of follow-up and the Supervisor does stay in touch with their team's performance. The issue was that there was no feedback to the subordinate. This meant, the sub did not know how s/he was doing and the annual performance reviews always became nightmarish.
Funnily I've seen this across the board in Malaysia as well as India and Indonesia, the three Asian countries I'm familiar with. I think this is very much a cultural issue. We Asians do have trouble giving face-to-face feedback - whether positive or negative. I'm working on a Training Program to imbed this in to the culture. I guess, to start with I've got to build it into a process and ensure the process stabilises... hopefully it will become a culture eventually.