Why do we need trial period for setting up KPIs?


As soon as you start breaking down the major KPIs of an organization and start addressing them to the lowest levels of your organization, you face two issues:

A) Lack of previous data and consequently lack of information for setting up individual target

B) Giving people time to cope with understanding their KPIs and their contribution in driving strategy

Let me explain you item A in details:

There are some needs for improvement in different departments and for implementing the improvement we need to know where we are now. To understand where we are now we need to do some studies or surveys in the company. For example satisfaction of people in transportation system or etc.

In setting up targets for such an improvement we always have two choices:

1. To be a dictator, and without looking back at the history, to set some targets based on ideal situation and eventually make people demotivated.


2. To be a democrat leader and to let people free to experience and to grow up.

If you pick the first suggestion then you need no trail period. Just go for it and decide in a second but your failure is guaranteed.

If you pick the second one, then you need people to understand where they are and where the company and the strategy need them to fly. And THIS takes time!

There is no specific formula for trial period. It is completely based on company culture, size and people.

What I have experienced in 19 years of consultancy is that six month trial period to understand things is ideal but if you feel that you should be faster, then at least try to benchmark your targets with few competitors in the same market.

It won't be easy but at least you get some idea for setting up fair and reasonable targets not to seem like a dictator ; ))