“Poetry is indispensable…if only I knew what for.” (Cocteau, in Fisher, 1986:1)
It is true that I am quite exercised at the moment and not in a heart strengthening, fat burning sense. All because of those three little letters – KPI. For those not familiar with Key Performance Indicators they are intended to be measures that enable you to judge organisational performance in the medium and longer term.
If developed appropriately and properly monitored they should be a valuable part of any organisational performance toolkit. Nothing contentious there, in fact, it seems terribly sensible. Is it not right that people should know what they are working towards, what success might look like?
Unfortunately, the term has become widely used and abused and often now relates to anything that can be measured. The Advance Performance Institute talks about the growth of what it calls the ‘ICE’ approach:
- Identify everything that is easy to measure and count
- Collect and report the data on everything that is easy to measure and count
- End up scratching your head thinking “What the heck are we going to do with all this performance data stuff?”
Not only are KPIs often misunderstood, there are darker forces at work, and some funding bodies are currently minded to hand out KPIs to their beneficiaries. In my view the recent mandatory KPI distributed by a certain arts funding body that shows its overall contribution to an organisation’s funding declining over three years seems curiously out of step with the context in which the arts now operate. Not that I don’t respect its right to set expectations around future funding levels by why, oh why, wrap it up as a KPI? Particularly one rooted in financial growth.
Recent retail figures show Tesco is facing its worst returns in 20 years, ONS and the OECD have both downgraded the UK’s economic growth, and George Osborne has made it clear that cuts are the bedrock of the Coalition’s Plan A. Greece is currently held up as the basket case but the UK economy is incredibly fragile and the US has had its credit rating downgraded. Moodys and Standard & Poors, who arguably played their own role in a lot of this mess, are still presiding over rating the world’s economies, need I go on…
Yet it appears that certain agencies believe that the arts (and I can also see it happening in the wider nonprofit sector) can valiantly cast aside these obstacles and look to growth. In trying to unravel this confusion I am struck by Cohen & Pate’s phrase ‘precarious armistice’ in terms of the relationship between government and the arts.
Attempts by government to evaluate arts organisations have not been hugely successful to date and this most recent phase does little to suggest this will change. Just where do people think the growth is going to come from? Apart from this question about practicalities it also seems to me to create further confusion about what could otherwise be a valuable method for understanding organisational performance.
If you are grappling with your KPIs at the moment can I suggest:
- Setting KPIs for your organisation first then consider wider stakeholder requirements
- Beware the promises you are making both internally and externally
- Make sure everyone understands the KPIs (and really make them ‘key’) and that you have systems in place to collect the data you need
- Then make sure you have the systems and processes to turn that data into knowledge and wisdom
- Negotiate clearly with your stakeholders about the KPIs that are right for your organisation
“The arts world … is both fickle and self-regarding, and it is difficult to predict the reaction of that world to initiatives which seek to control it.” Cohen & Pate, 1999
If you are undertaking a KPI process at the moment we would really appreciate hearing your experiences.