Get the opportunity to grow your influence by giving your products or services prime exposure with Performance Magazine.

If you are interested in advertising with Performance Magazine, leave your address below.

Advertise with us

Posts Tagged ‘KPI governance’

The Politics of KPIs: Why Metrics Are Never Truly Neutral

FacebooktwitterlinkedinFacebooktwitterlinkedin

The Politics of KPIs: Why Metrics Are Never Truly Neutral

If you present two experienced chief executive officers with precisely the same digital dashboard, one will zero in on cash flow and return on investment. 

The other will bypass them and ask to know customer retention, employee engagement, and product penetration rates. Both will be right, and both might even become brilliant leaders, but before they make any decisions, the CEOs will have implicitly expressed what success will look like for them.

It is an issue that organizations seldom concede. Organizations want to pretend that the Key Performance Indicators (KPIs) on any dashboard are impartial, that they are simply observers of what is really going on. People put their faith in dashboards because numbers are perceived to be objective. 

However, KPIs do not exist to be discovered. They were invented. Someone had to choose what mattered most; someone defined success, agreed on thresholds for it, frequency of assessment, and selection of appropriate measures. Long before any of these figures had been generated, human beings had to decide how a compelling narrative might unfold for these numbers. 

This should not discredit the utility of the KPI; rather, it should humanize it. The more organizations grasp the reality that the KPI is a deliberate fabrication, the more successful they will be in designing performance management that aligns with strategic intent rather than covert assumptions.

The Myth of “Letting the Data Decide

Modern organizations commonly describe themselves as data-driven. It is a buzzword you’ll find in strategy documents & presentations from a wide range of industries. Underlying all of these instances is the notion that data ought to inform decisions instead of instinct.

From a general perspective, it is the perfect path. From a narrow perspective, problems start to creep in, though, when data is automatically presumed to be objective. Data rarely makes its journey to us in a void. Any dataset exists for the simple reason that someone thought that it would be valuable. Any KPI exists because someone has decided that it represents a significant area of performance.

Take, for example, a company that has decided to quantify customer service performance.

A first step might be fairly easy to determine. Develop some KPI’s, for example. Yet, which one to select?

  • To be able to respond within a few moments?
  • Achieve first-contact resolution? 
  • CSAT?
  • NPS?
  • Reduce the number of customers lost?
  • Reduce the number of complaints received?

Each data set offers a different perspective; it supports a distinct way of working and motivates employees to focus on a unique perspective within customer support. The data alone is not the most important priority. It is the people who comprise the organization. Even to opt not to make a measurement constitutes a decision in its own right.

By omitting the monitoring of employee happiness from the leadership dashboard, the company has subtly signaled to staff what needs more focus and consideration. Therefore, in this respect, the dashboard is not only a descriptor of the actual organizational state, but it also creates the organization itself.

Every KPI Reflects A Worldview

The single biggest misunderstanding about performance measurement is the idea that KPIs exist in a vacuum, devoid of the people who build them. KPI “1” doesn’t just describe reality; it defines it. Consider two almost identical manufacturers: 

Company 1. A CEO who spent 20 years in finance leads them.

Everything in the quarterly board report is financial: Opex, Inventory Turnover, EBITDA, Working Capital. Conversations naturally center around efficiency and the bottom line. 

Company 2. An operations engineer leads them.

The dashboard’s a completely different beast.

Quality, uptime, scrap rates, Overall Equipment Effectiveness – because in their eyes, quality is what drives the company forward. Two similar companies, two different roles, but one set of dashboards tells a completely different story about what’s worth talking about, purely as a consequence of the personal histories of the leaders.

It’s a pattern that repeats everywhere. An operations person in a hospital might focus on utilization rates and lengths of stay to better predict capacity requirements, while a clinician with a patient focus might emphasize read rates and post-treatment outcomes. It’s not about which is “right.”

Both have value. Both obscure other important things, because the difficult but useful reality is this: KPIs don’t just measure your priorities, they display them.

Measurement Is Also An Exercise In Omission

When organizations talk KPIs, there’s a lot of discussion about what we should measure. There’s very little discussion about what we’re not going to measure. 

Every dashboard has limited real estate. Every organization has finite analytical resources. Selecting one KPI often means leaving another behind. That act of omission defines behaviour just as much as what lands on the dashboard. 

Consider a software company focused on frequent feature releases. They emphasize deployment frequency, development speed, feature usage time, and release cadence. This company becomes an expert at pushing features out the door, yet if it doesn’t emphasize measuring feature adoption with similar prominence, it might find itself continuing to crank out features with no clear signal of whether anyone is using them. The KPI’s they picked are perfectly fine, just incomplete.

This applies well outside of software. 

  • Retailers may perfect sales efficiency and miss out on customer lifetime value. 
  • Universities can increase graduation rates at the expense of the actual quality of education. 
  • Healthcare providers may decrease patient wait times, but at the expense of staff burnout. 
  • Manufacturing may maximize production output, but at the expense of product quality and defect rates.
  • Customer support teams may reduce average handling time, but at the expense of customer satisfaction and first-contact resolution.
  • Logistics companies may optimize delivery speed, but at the expense of delivery accuracy and package condition.
  • Marketing agencies may increase campaign volume, but at the expense of campaign effectiveness and client ROI.
  • Hospitality businesses may maximize room occupancy at the expense of the guest experience and repeat bookings.
  • Call centers may focus on the number of calls handled, but at the expense of actually resolving customer issues.
  • Construction firms may prioritize finishing projects on schedule, but at the expense of workmanship quality and long-term durability.

Organizations don’t disregard these outcomes because they don’t want to. Typically, they simply aren’t being measured with equal visibility. Whatever we’re paying attention to gets better. Whatever we’re not tends to atrophy when competing for attention and resources. That’s why KPI design is a strategic exercise, even though many companies treat it as a math exercise.

KPIs Shape Organizations Long Before They Measure Them

Maybe the most fundamental transformation executives need to make in their approach to KPIs is understanding that they aren’t just retrofitting performance to evaluate what has already occurred. They are prospectively influencing what occurs. When an organization rolls out a new KPI, the company’s behaviour shifts almost immediately: 

  • Managers start deploying resources differently.
  • Employees prioritize differently.
  • Different departments redefine what constitutes success. 
  • Investment decisions shift. 
  • Performance evaluations change. 
  • The language used in internal meeting rooms shifts.

In short, KPIs do not just observe an organization from afar. They are involved in building an organization, and this is precisely why discussions of performance metrics can sometimes turn emotional. 

Outwardly, business leaders appear to be arguing over numbers. Internally, what they’re actually arguing over is something more fundamental: 

What kind of organization are we aspiring to be? 

  1. One finance executive might argue that, given the economic environment, profitability must be given greater visibility. 
  2. An HR executive might emphasize that employee retention provides an early signal of long-term viability.
  3. A third executive overseeing customer experience might contend that retention needs to be emphasized just as much because losing today’s most loyal customers will cause problems for tomorrow’s financials.

Each executive can generate persuasive data and can construct a well-reasoned business case. However, under each case, there lies an underlying question no scorecard can answer directly: 

Which version of the organization’s success should we endeavour to achieve? 

That is why discussions about performance measurement seldom stop at purely technical questions about methodology. Instead, they are discussions about priorities, strategy, goals, objectives, vision, and identity.

That makes them inherently political (though not necessarily in the partisan sense of the term, but rather in the political sense of negotiation and compromise among stakeholders). Acknowledging this is not a weakness in performance management, but the first prerequisite for more mindful use of KPIs.

Who Defines Success?

If every KPI is rooted in a human choice, a much larger question arises: 

Who gets to make that choice? 

On its surface, it may seem simple. Leadership sets out the organizational strategy and KPIs, then monitors progress toward those goals. However, that rarely pans out in practice.

Companies are divided into departments with different competencies, skills, values, and views of what success looks like. Finance, Operations, HR, Marketing, Sales, Customer Success, IT: each looks at the business from a distinct vantage point. None is correct, none is wrong, yet most importantly, none is sufficient alone. 

It’s not so much that leaders lack consensus on what may be the best path for performance management; it is much more so that they lack consensus on which performance metrics matter most.

At that point, KPIs become subtle tools of governance. Choosing a metric becomes about who we want to have in leadership conversations, which projects are funded, and which team members are celebrated. Ultimately, each KPI is a person’s priority amplified.

Different Backgrounds create Different Dashboards

One might be inclined to think that executives in identical positions build similar performance dashboards, but our experience with real-world examples suggests otherwise. Two leaders can arrive to manage the same organization, with the same market dynamics and strategic ambitions, yet still focus on completely different sets of key performance indicators.

What influences them most is often shaped long before the executive suite was within reach.

Scenario 1

Suppose a retail company appoints a new CEO. 

One candidate had twenty years as a Chief Financial Officer. Unsurprisingly, the dashboard the executive team reviews focuses on gross margins, operating costs, inventory turns, and the cash cycle. The conversations always start with financial discipline, simply because the executive has been speaking that language for their entire career.

Scenario 2

The company promotes the former Chief Customer Officer.

Suddenly, the dashboard is dramatically reframed. The customer lifetime value (CLV), the customer repeat purchase rate, the Net Promoter Score (NPS), and the customer retention rate are the focus of the top portion of all reports. Financial metrics matter, sure, but they are now a consequence of customer experience.

Neither CEO is being obtuse – they are just asking different first questions, and this is the pattern we see across many different kinds of companies.

Let’s say a manufacturing organization promoted an engineering executive who has great rigour in monitoring the defect rate, equipment reliability, production throughput, on-time delivery performance, and OEE.

Now, change the chief executive to a commercial executive, and one begins to see a shift in the focus of reports towards the delivery performance, market share, customer demand, and revenues. Both individuals want the organization to do well, but they have different visions of how to achieve that.

KPI Ownership Isn’t About Control – It’s About Influence

The politics of KPIs seldom originates from people fudging their numbers. More frequently, the politics are generated because all functions honestly believe that their numbers need a higher profile than everyone else’s numbers. Picture a leadership discussion where next year’s executive dashboard is being developed.

  • Finance will argue that increasing cash conversion and profit is more important than any other objective during economic instability.
  • Sales will argue that pipeline value and revenue growth need greater focus, since future profits depend upon present revenue. 
  • HR will claim that employee turnover is high and that replacing talented staff is becoming extremely expensive. 
  • Customer support will show that reducing churn delivers far greater lifetime value than acquiring new business. 
  • Operations will insist on focus and delivery – the ultimate success factor.

Everyone has credible evidence and data to present. Everyone has good reasons to make their case. No one is trying to pull the wool over anyone’s eyes; rather, each party is conducting a negotiation based on diverse viewpoints. 

This is why it can be so hard for some companies to construct a dashboard that represents the whole organization – there are distinct differences in perspective shaped by individual professional experience. The end product of all this discussion is, in effect, a collection of priorities.

The Same Role Doesn’t Always Produce The Same Priorities

The clearest evidence that KPIs are far from neutral becomes apparent when leaders with almost identical roles and completely contrasting career backgrounds are considered.

Healthcare 

On the one hand, a hospital CEO, who was formerly a doctor, is prone to prioritizing indicators such as patient outcomes, hospital readmission rates, quality of treatment, clinical safety, etc. Hence, the quality of care to the patient would naturally be the most obvious indicator of how well the organization is doing.

On the other hand, a CEO who has risen through the ranks in operations within the hospital may be more concerned with ED wait times, bed occupancy rates, resource utilization, patient throughput, and similar measures that help ensure more patients are treated at the earliest possible moment.

Of course, this doesn’t mean they have ignored the other aspect; rather, they will attain the same objective through different pathways. 

Education

In the sphere of higher education, a president of the university who was an academic before taking on the administrative role will place maximum importance on indicators of research productivity, faculty career growth, scholarly publications, and university reputation. 

Conversely, if the president came from a background of business or financial administration, then greater significance would be given to indicators of student retention, enrollment growth, student graduation rate, and institutional financial viability. 

While both care for a high-quality education, there would be differing views regarding which parameters would truly signify the accomplishment of this goal.

Technology

In the arena of growing technology ventures, a CEO-founder with an engineering background would focus primarily on system availability, product robustness, deployment speed, and system stability as performance indicators. 

Alternatively, if the founder has a background in marketing, then parameters such as customer acquisition cost (CAC), conversion rates, brand visibility, and market presence will receive equal and immediate attention. 

There is no one viewpoint that is more correct than the others; they simply demonstrate how one interprets the areas that demand attention earliest in any given organization.

Why These Differences Matter More Than We Think

These examples may seem like just leadership personal preferences, but these actions have powerful consequences throughout an entire organization. What a leader chooses to measure shapes what his managers focus on. What the managers focus on shapes how their teams choose to spend their time. Over time, the patterns of decision-making based on these priorities create a corporate culture.

Think of two organizations in the same business, with nearly the same model. 

  • In one company, excellence is defined by efficient operations. Employees come to see that improving productivity, cutting costs, and eliminating waste are a fast track to success and promotions.
  • In the other company, excellence is defined by a drive for innovation. Employees are recognized and promoted for learning rapidly from failures and for innovation.

These organizations aren’t giving out explicit instructions about what employees should think about the nature of the organization. They’re telling their employees that through the metrics they display.

This is why companies tend to resemble the scorecards that they create. Employees are not merely reacting to incentives. People learn what the organization truly cares about from the metrics executives most often refer to.

Your mission statement may claim your organization stands for several values: innovation, collaboration, sustainability, and customer satisfaction. However, the numbers on a scorecard tell the story of your true priorities in brutally honest terms. If there’s a metric you see repeated again and again in executive committee meetings, influencing bonuses and being factored into strategic decisions, it gradually becomes very important to employees. Other metrics can begin to seem less so.

This is why a discussion of who owns the company dashboard can never be a conversation simply about accounting software and spreadsheets. That conversation always evolves into one about the core of the organization’s identity because deciding what to measure, in the end, is another way of asking what winning looks like.

When Metrics Become Power: How KPIs Shape Organizational Behaviour

By the time a KPI lands on an executive dashboard, it has endured endless discussions. Someone proposed it. Someone challenged it. Someone defended it. Finally, it becomes part of the organization’s definition of success. Yet the journey is far from over. 

When the KPI is tied to performance reviews, incentives, promotions, budgets, or strategic decisions, it ceases to be an innocent indicator of an organization’s health. It becomes an incentive, and people do have an outrageously uncanny ability to respond to incentives.

This natural predilection has nothing to do with 200-IQ deceitfulness, but rather with the fact that any organization inherently sets its employees up for success through the rules it puts in place. People will, predictably, focus on metrics they are being judged by. The question remains whether they are improving what they said they were improving by driving the metric.

From Measuring Behaviour to Driving Behaviour

Businesses often view KPIs like rear-view mirrors: they only provide a snapshot of what the business did, when in fact they’re a lot more like steering wheels – after you set an organization on the road with any particular metric, everyone begins to steer by it.

Think of your customer support organization with average ticket resolution time as its leading indicator of success.

On the face of it, a logical target, customers prefer quicker support. Nevertheless, what happens when they all start steering toward that target? Well, over time, things begin to get murky and odd incentives sprout up. Your support team begins to know that they’re being rewarded for quickly closing tickets. They pass on the tougher tickets to the next available team; they begin closing tickets before customers feel resolved, and their post-support phone calls and emails become more concise. They all look like they’re performing well, but the customer experience continues to deteriorate as the focus shifts from quality to speed.

Nothing is being falsified, and nobody is breaking the law. Everyone’s just doing what they’re incentivized to do. The metric is doing what it was built to do: driving behaviour, but everyone assumed the metric was the behaviour itself.

When the Measure becomes the Target

This effect has been seen across industries for years and can often be boiled down to a well-worn observation: “When a measure becomes a target, it ceases to be a good measure.” 

What that means is that when people know their performance will be judged based on a particular number, their incentives are immediately aligned to achieve that number. That behaviour is not always aligned with the leaders’ expectations for why they implemented that measurement in the first place.

Just ask teachers or healthcare providers, for example. 

  • If educational performance hinges solely on standardized tests, then those teachers are likely to spend a large chunk of their precious time training students to beat those tests. 
  • If hospital management puts tremendous pressure to reduce ED wait times, departments will likely find ways to shorten wait times without increasing throughput or improving patient health.

The KPI improves, but what about the actual outcome? What comes out at the end of the entire process?

It is important to note that we are not recommending against setting and measuring performance targets in the first place. However, we should be aware that every indicator of success will drive behaviour in unintended ways.

Negotiating Targets isn’t Cheating, it’s Organizational Reality

Something we don’t talk enough about when it comes to performance management is the fact that the KPIs themselves are typically negotiated. KPIs seldom spring fully formed out of some vacuum. Instead, they’re born from a series of debates: between departments on what’s achievable, between executives on the relative merits of optimism and pragmatism, between finance on the financial case for making some improvement, between operations on practical constraints, between managers on what’s realistic for their people.

At a macro level, these debates are about numbers, but at a micro level, they’re debates about risk and accountability, expectations and aspirations.

  • The sales director suggests that the department should aim for 25% revenue growth next year. 
  • The marketing director argues that brand awareness can’t deliver that without more investment in brand building. 
  • The operations director points out that capacity constraints might emerge. 
  • Finance expresses doubt whether the forecasts could hold up given the prevailing market conditions.

Through several meetings, a figure between 15 and 20% is eventually agreed upon.

Was politics the issue in determining the KPI?

Yes, yes it was.

Should it have been a problem?

No. A certain level of politicization is necessary in business to enable us to accommodate the various conflicting, yet valid, points of view we have to wrestle with. We risk deluding ourselves about how our systems work by denying that these exchanges exist. That’s where the problem lies, not in the exchanges themselves.

The KPIs That Get Attention Usually Get Resources

At the end of the day, organizations spend money, talent, and time in ways that leadership consistently prioritizes.

Think about two organizations dealing with exactly the same challenges. 

  1. At Company A, sustainability is a topic of every executive meeting. Financials and carbon emissions are both represented on board meeting agendas, as are renewable energy and suppliers.
  2. In Company B, sustainability is addressed annually.

Who do you think will be investing more in the environment? Who do you think will be drilling down into those numbers in leadership meetings? Who do you think will feel that their remit includes managing this initiative rather than just reacting to a mandate? 

It’s got less to do with values than visibility. Ultimately, on the outside, any leader or organization will invest resources in the things their senior leaders talk about and pay close attention to.

The same is true on the inside. If the leadership team shows new product revenue on their dashboards, experimentation metrics for product teams, and measures related to idea generation or the marketing pipeline, people quickly understand that innovation is not just an aspiration; it’s a priority. The same is not true if the topic comes up during a leader’s quarterly inspirational talk but not during any other type of review meeting or dashboard report.

It has become almost a cliché that experienced executives tell people that organizations become incredibly good at whatever it is they measure. It has little to do with other aspects being irrelevant; rather, it’s more about the fact that everyone’s attention span is limited, especially nowadays. 

Metrics Also Shape Organizational Narratives

Beyond incentives and resource allocation, in some environments, KPIs can have an even more insidious effect. They dictate the narratives a company tells itself. 

Consider a firm with decelerating revenue growth. For a CEO who is solely obsessed with profitability, flat performance can be cast as evidence of fiscal prudence: margins are expanding, the cost structure is well contained, free cash flow is improving, and cash reserves are strengthening. The narrative is one of resilience. 

Now, let us behold a similar firm, but helmed by a CEO with a penchant for tracking customers. A similar result – growth sputtering – might be spun as a signal that it’s time for urgency, highlighting fading customer momentum and the increasing threat from rivals.

The same result but different interpretation, and therein lies the critical point about performance management: KPIs don’t simply convey information; they shape perception

While executives may have the best intentions, most aren’t actively seeking to mislead their organization when constructing executive dashboards. Rather, they generally do genuinely want to point to the most significant signs of organizational progress.

Still, all dashboards, however well-intentioned, carry narratives, and each begins by making choices about what matters most. That’s why the debates over a particular metric or target can sometimes become so emotionally charged. They’re not just arguing over numbers but over the story of where they’re going – the future that begins to take shape once the figures enter the conversation. KPIs reflect reality in so much as they also make it.

Better KPI Governance Starts With Better Questions

You may be inclined to arrive at an uncomfortable conclusion if you have read up to this point: if every KPI represents a human choice, organizational bias, or a competing perspective, do truly objective measurements even exist?

Well, no, and in fact, embracing this fact is one of the most beneficial mental models for an organization to adopt. Human judgment being present in KPI formulas is not the issue. The issue is that it pretends not to exist in the first place. 

Organizations spend an enormous amount of time fussing over formulas, fiddling with calculations, optimizing data quality, and investing in increasingly complex dashboard infrastructure. These are valuable pursuits but may mask the illusion that better analytics invariably yield better decisions.

An impeccably precise KPI might still measure the wrong thing. A well-designed dashboard may reinforce old habits of organizational thinking. In reality, the real task at hand is not to eradicate subjectivity; it is to expose it. 

Organizations that are at the forefront of the analytics field understand that their KPIs aren’t sacred scriptures. They understand that KPIs represent a decision to measure something, a choice that must change as the business context changes. This outlook changes the dialogue at leadership levels entirely.

Rather than asking “Is this KPI accurate?”, leaders ask far more pragmatic questions: “What am I measuring this for? What are its downstream impacts on behaviour? What crucial outcome may be getting missed?” 

The Best Dashboards invite Discussion, not Blind Agreement

Perhaps the most damaging fallacy regarding executive dashboards is that they should somehow negate debate. Actually, great dashboards inspire much better debates. Picture showing the same performance metrics report to a group of executives from finance, operations, HR, product management, and customer service.

If they don’t even argue the numbers in front of them, it may be a cause for concern.

People come at things from different angles for good reasons in an organization; organizations are complex systems. 

  • The CFO sees declining margins as a clear risk 
  • The CHRO may detect employee burnout lurking below deceptively positive productivity figures 
  • The head of operations is aware of production capacity constraints before they show up on financial statements
  • The customer service executive notes the first whispers of declining satisfaction before customer revenue has been negatively affected

Healthy companies view these different lenses not as conflicting interpretations of truth but rather as complementary observations that together yield a far richer view of reality. There isn’t a single “right” way to measure a company’s health; rather, a high-performing system must measure many facets that determine a system’s health.

Just as a doctor doesn’t look only at a patient’s blood pressure, nor does an airline pilot fly a plane only by watching the fuel gauge, an organization can’t monitor only one dimension to determine overall health.

Good KPI Governance Means Challenging Your Own Assumptions

Perhaps the best leadership habit an executive team can build is to occasionally challenge the KPIs to which they’ve become so accustomed, because they have realized that the very essence of their business has changed.

  • The market changes. 
    • The expectations of the customers change. 
      • Technology disrupts industries. 
        • The strategy changes. 

Yet somehow, too many businesses will go on reporting on the same KPIs as last year, or the year before that, simply because that’s what they’ve always done. Dashboards simply become a habit.

Organizations start asking whether they are measuring what is important and begin talking about whether they hit last year’s target, leaving out the fact that some of the most important leadership conversations aren’t about performance – they’re about whether they are even asking the right question. 

Think of a business that has long since learned that office space usage, in-person collaboration, physical footprint, and building occupancy are metrics. Those numbers may have seemed to make sense until remote and hybrid work totally upended the way that we collaborate.

This organization now needs a new way to conceptualize performance altogether. The business that survived didn’t necessarily have the best-looking metrics. They simply weren’t afraid to ask whether their assumptions about what constitutes performance were out of sync with market reality.

Transparency Builds Stronger KPIs

If KPIs are truly strategic choices, organizations should disclose them. This doesn’t mean offering an executive summary of each KPI – it simply means being able to articulate, clearly, why a particular KPI exists in the first place. 

  • Who asked for it?
  • What strategic goal does it serve?

  • Why this metric over other potential measures?

  • What shortcomings should the decision-maker consider?

These dialogues might seem shockingly mundane, but they’re profound at a human level. 

Just picture a new exec joining a company. Instead of receiving a dashboard of meaningless numbers, they may have a conversation with leadership about why KPIs such as customer retention, investment in employee development, and innovation play such a central role in current operations. This conversation turns the dashboard into a mirror of the organization’s underlying strategy. Even more importantly, the practice of transparency helps with subsequent evolution. 

Once the rationale behind a KPI is clear, the organizational decision process shifts to the question of whether that metric still applies or if a different measure might serve the organization’s goals more effectively. The distinction between defending an individual metric and defending a KPI’s intent may be subtle and unimportant to the inexperienced, but vital to those with many winters over their brows.

Final Thoughts

Organizations have spent decades trying to refine how they measure performance. 

✔️ We’ve improved the richness of dashboards.
✔️ We’ve elucidated data so that it is more readily available.
✔️ We’ve made analytics quicker and richer.
✔️ We’ve enhanced the systems to be more intelligent through artificial intelligence.

Yet there’s one factor that’s remained constant: the human decision-making power behind every KPI. Humans decide what needs to be considered, what needs to be celebrated, which numbers make it to the boardroom, and which ones never even make the dashboard. This is a natural outcome of leading human beings with varied experiences, areas of expertise, priorities, and roles. 

KPIs being a thing isn’t an error – we as a species have loved numbers, measurements, comparisons, and benchmarks since we had the mental capacity to engage with these matters. The error lies in the expectation that all of these things we love are entirely objective.

Great organizations accept, confront, and consciously bring other points of view to the discussion because effective conversations about performance indicators usually start with a question, not a spreadsheet: Why are we even tracking this? 

Companies rarely achieve what they declare is important to them; they reflect what they measure. The truest measure of an organization’s ability to govern its work, lead with conviction, nurture with care, and innovate for impact is not a KPI on its dashboard; it is its commitment to challenging its time-honored metrics.

**********

Looking to strengthen your expertise in KPI design and performance measurement? Gain practical knowledge, proven methodologies, and globally recognized certification through The KPI Institute’s Online Certified KPI Professional.

The 5 KPI and Strategy Articles You Loved Most So Far in 2026, Based on New Readership Data

FacebooktwitterlinkedinFacebooktwitterlinkedin

Every day, organizations face difficult questions: Which KPIs truly matter? How can strategy move from planning to execution? What practices lead to stronger organizational performance? The articles in this roundup address these and other pressing challenges.

Based on the latest readership data, these are the 10 Performance Magazine articles readers returned to most often so far in 2026.

If you’re looking for practical insights to strengthen strategy, performance measurement, and decision-making, this collection is a good place to start.

1. How Apple Uses the Balanced Scorecard

If your KPIs fail to tell the full story, it may be time to rethink how you measure performance. Learn how Apple uses the Balanced Scorecard to translate strategy into measurable outcomes across the entire organization. Read the article here.

2. 5 Levels of Organizational Maturity in Performance Management

Why does your organization feel busy but still struggle to turn performance data into meaningful results? Discover the 5 levels of organizational maturity—from inconsistent processes and unclear KPIs to an optimized, strategy-aligned system that drives continuous improvement. Check out the article here.

3. KPI of the Day: Utilities: % Electricity supply not restored within 2 hours

Power outages are frustrating—but the real performance issue is how quickly you restore them. This KPI measures the % of electricity interruptions lasting beyond 2 hours, helping utility providers identify restoration bottlenecks, strengthen response strategies, and improve reliability for customers. Find out more about this KPI here.

4. Is Benchmarking Worth a Company’s Investment and Time?

Measure. Compare. Learn. Improve.

Benchmarking transforms isolated performance numbers into meaningful reference points—helping organizations uncover gaps, learn from best-in-class practices, and make smarter improvement decisions. See what our performance management expert says about it here.

5. Southwest Airlines: From Benchmarking to Benchmarked

Your competitors aren’t always your best teachers. Southwest Airlines looked to NASCAR pit crews for lessons in speed, task clarity, and teamwork—then used those insights to transform its turnaround time and become a benchmark itself.  Get the details here.

**********

Whether you’re discovering these articles for the first time or revisiting them for fresh ideas, we hope this collection helps you tackle today’s performance challenges with greater clarity and confidence. If you have any questions or ideas for future articles, don’t hesitate to reach out: [email protected]

KPI Governance Structure: Understanding the Roles of KPI Owners and Data Custodians

FacebooktwitterlinkedinFacebooktwitterlinkedin

 

Image Source: relif | Canva

When implementing a Performance Management System (PMS) based on Key Performance Indicators (KPIs), the organization needs to create a favorable context to plan, organize, coordinate, communicate, and control performance. Such endeavor implies multiple initiatives, resources, and most of all, employee engagement. However, challenges are inevitable. These challenges often arise from the mechanisms and relations by which the KPI Measurement Framework and KPI-related processes are controlled and directed. 

As such, unclear definitions and overlap of roles and responsibilities and lack of ownership, commitment, or clarity in terms of target achievement accountability are some of the most common challenges that may endanger the achievement of strategic business objectives and goals. The root cause of these dysfunctions is that KPI governance structure has never been clearly defined or described.

KPI governance structure

There are multiple parties involved in governing and managing KPI-related processes, and all play a specific role in promoting, supporting, designing, implementing, and maintaining the KPI measurement framework. A typical KPI governance structure includes the following  components:

  • Performance Manager – Responsible for supervising the entire process
  • PMO specialists – Support the persons involved in the process, analyze data and check it for accuracy
  • KPI owner – Responsible for KPI target achievement
  • Data custodian – Responsible for KPI results collection/ data collection

KPI owners and data custodians have two of the most operational KPI governance roles within the organization. While the data custodians are responsible for ensuring that high-quality KPI data is gathered and communicated to all interested stakeholders, the KPI owners are mainly responsible for the KPIs under their management, making sure that they are viable and measurable.

KPI owners’ role and responsibilities

Within a standard Data Governance Framework, a data owner is in charge of ensuring that processes are followed to guarantee the collection, security, and quality of data. Frequently in a senior or high-level leadership position, a data owner has a role in planning the data, supervising access to it, ensuring data security, and defining a repository to contextualize the data.

Similarly, a KPI owner is responsible for overseeing the process, function, or initiative that the KPI is monitoring. That person has access to the data, knowledge of how that domain functions, and, most of all, is empowered to make decisions on improving operations. 

In a nutshell, the KPI owner is responsible for reaching KPI targets through the following actions:

  1. Monitoring (looking at) the measure over time
  2. Interpreting its trends and patterns and seeking causes for them
  3. Communicating this information to people affected by that performance area
  4. Initiating action to improve performance in that area
  5. Following up to be sure that actions have the desired effect on performance

Data custodians’ role and responsibilities

Within a KPI governance framework, data custodians are involved in the design of performance data collection, receipt and storage, process, analysis, reporting, publication, dissemination, and archival or deletion of data. The daily processing and management of performance data are therefore under the control of appointed data custodians. The person assigned with such a role must demonstrate high levels of data literacy as well as skills in data management software systems and tools. 

Other required competencies for a data custodian are as follows: 

  • The ability to intuitively identify and recognize any variance from the data quality dimensions
  • Can contribute to better ways of collecting data
  • Focused on the improvement and automation of the process
  • Can competently apply the behaviors and skills of managing change
  • Uses change as an opportunity to advance business objectives
  • Works to minimize complexities, contradictions, and paradoxes or reduce their impact
  • Unifies leadership support for direction and smoothens the process of change

We may say that the data custodians are the guarantors of a sound performance data gathering process. Because of that, the profile of such an individual should also cover an analytical mind, experience in measuring and reporting metrics/ KPIs, information technology skills (basic Microsoft Excel or more advanced data analysis tools, depending on the data architecture`s level of automation), and a strong sense of integrity and ethics.

While some companies may hire specialized professionals, such as data analysts, other organizations may assign the data custodian roles to the existing employees. 

Conclusion

Building a strong KPI governance team is a key part of the KPI-related processes and functionalities and of successfully overcoming the inherent challenges of implementing a PMS. Once the right people are on board, they need to be guided towards making the right decisions and focusing on the correct issues, ultimately making sure that information is being governed for a purpose that aligns with business objectives.

Discover the world of KPIs, from best practices to developing scorecards and dashboards, by signing up for The KPI Institute’s KPI Professional and Practitioner training courses.

THE KPI INSTITUTE

The KPI Institute’s 2026 Agenda is now available! |  The latest updates from The KPI Institute |  Thriving testimonials from our clients |