In a recent conversation on KPI management, I came up with, what I hope, could be a catchy soundbite: “is your green the new red?”
The idea behind the sound bite is that, while many organizations focus on the red KPIs on their scorecards, they rarely question the ‘greenness’ of their green indicators. After all, it is normal to want to focus on reds and assume that, if something is green, we shouldn’t worry about it.
The only problem with this logic is that it gives too much credit to what a KPI really is. The more important aspect of KPI management, I believe, comes from understanding the factors that lead to its color. I’d argue that if one can’t explain why their KPI is green, it might as well be red. An unexplained green KPI can either be a fluke or a problem waiting to happen.
There is more complexity to this issue of course, but organizations that think about KPIs this way, make an effort to reduce the number of KPIs they monitor and focus their activities on explaining the ‘why’ of KPIs rather than reacting to their colors.
What do you think?
Bruno (follow me @ http://ping.fm/wAJdG)