How CSFs and KPIs can become misleading & counterproductive...

I have been referring to CSFs (Critical Success Factors) and KPIs (Key Performance Indicators) frequently in my talks, courses, and publications. I truly believe that Performance Metrics are as important as any other P in the 5P pyramid (Philosophy, Process, People, Problem-solving, and Performance metrics). However, there are two situations that the concepts can be hijacked...

First a little refresher course:

CSFs work the vital signs in our health, i.e. Pulse, Blood Pressure, Heart Beat, Temperature, and weight.

KPIs are simply the numbers or the status of those CSFs, i.e. 142/75 could be the KPI for blood pressure!

Having explained that, each manager should identify the "right" CSFs for a given project and for the entire organization's wellbeing! Otherwise, the metrics not only be useless, but they can also become misleading too, scientifically misleading!!!

I can offer two different types of examples, one setting wrong CSFs out of ignorance and one intentionally manipulating the data to make "legitimate" CSFs look better!

1) Wrong CSFs due to ignorance: For instance, a physician can send out surveys to his patients to check the pulse of his/her business, however, he can actually be misleading himself and his staff if he considers "wrong" CSFs. How you may ask and I am glad you ask that! If CSFs selected are not directly related to the Critical Success Factors of his/her practice, the patients' responses, although scientific, truthful, and objective, the end result can be misleading or at the very least worthless! For example, the doctor can ask in the survey about how the new front office remodeling, fresh flowers, and/or the soft music background are, which have nothing to do with major concerns that patients have or should have. Concerns like wait time, doctor's office effectiveness and efficiency, lab work accuracy, the effectiveness of diagnosis and the medication, etc.

2) Intentional manipulation of data to look good: In this case, an engineer may set some CSFs to show his competence in the structural integrity of the bridges that he has designed and how well ALL the bridges that he has designed have passed all the tests over many years! In here, it is possible that the engineer picks and chooses the "easy" designs and turns down the complex bridges that he/she may or may not be comfortable designing! Although the CSFs and KPIs show his superb competence, because they are not conclusive and comprehensive, the scientific end result is in fact, quite unscientific and very misleading!

It is, therefore, essential to examine the CSFs and KPIs thoroughly before we decide that any mathematical calculation is in fact, scientific, accurate, and objective!

Godspeed!

Hormoz Mogarei

November 17, 2021