Why (Great) KPIs Start at the Top
This piece is written by my close colleague, Australian-based Stacey Barr, the creator of PuMP’s evidence-based leadership approach.
The strategic direction is crafted, the strategic goals are written, and then the task of “finding the KPIs” is handed to strategy and performance practitioners or analysts. Sometimes consultants are brought in. Leaders hand the strategic goals over and say, “You’re the experts — tell us how we should measure these.”
Delegating strategic KPI design feels like a reasonable management move. Leaders are busy, and measurement appears time-consuming.
In reality, though, KPI delegation is a recipe for strategic failure.
The hidden risks of KPI delegation
Leadership delegation of strategic KPIs is exactly why so many organisations end up with weak measures, dashboards and reports that produces little insight, and teams that are disconnected from the real strategy. It’s why strategy execution fails so often.
The reason is simple. The people asked to design the KPIs don’t have access to the most important ingredient: understanding of the strategic intent behind the goal. And this exposes the organisation to three strategic risks:
- The delegated strategic KPIs steer the strategy in the wrong direction.
- The strength of the strategy goes unchecked.
- The organisation can’t properly align to the strategy.
Risk 1: Delegated KPIs steer the organisation in the wrong direction
When leaders delegate the design of KPIs, they aren’t just asking someone to find data. They’re asking them to interpret the strategic intent.
If a goal like “improve organisational agility” is delegated to a team to measure, they have to guess what “agility” looks like through the leadership team’s eyes. If they guess wrong — and they usually do, because words like agility, efficiency, and sustainability are “weasel words” — they land on the wrong measures. And those measures tend to be what is easy to measure, or what is already being measured, retro-fitted to the new strategy.
The leadership team ends up with a strategic dashboard that tracks the wrong things. The organisation starts chasing those wrong things. And time and resources are wasted in the pursuit of anything but the intended strategic direction.
Risk 2: The strength of the strategy goes unchecked
The risk of delegating KPI design is not just poor metrics. It’s the missed opportunity for leaders to clarify their own strategy.
Strategic goals are often aspirational — written with phrases like “enhance customer experience,” “strengthen community trust,” or “improve organisational capability.” These statements sound important, but they leave too much room for misinterpretation.
When leaders are not involved in defining how success will be measured, they remain unaware of this potential for misinterpretation. They don’t see the misinterpretation has already started within the leadership team itself, nor how it can amplify across the organisation. They don’t get to check and test the real-world changes their strategic goals will bring about, and if their combined effect is really the future the leaders want to create.
Risk 3: The organisation can’t properly align to the strategy
The achievement of a strategic direction comes from a system of cause-and-effect. The goals at the top are the “north star” for every other goal in the organisation.
If the strategic measures are poorly designed or disconnected from the intent, it sets up the wrong bearings, and the wrong cause-effect logic, throughout the organisation.
Every team starts aiming at targets that don’t create any meaningful change in the direction of the strategic intent. They stick with the KPIs and projects they already know. They confuse activity for progress. The organisation doesn’t have one true strategy, and it can’t move in the one same direction.
Measurement is a strategic skill every leader needs
The act of defining evidence of success — the measures that prove the strategy is working — is inherently a leadership responsibility.
Measurement is a powerful part of the strategic conversation, translating an inspirational but lofty strategic direction into the intended real-world results. It’s not about numbers. It’s about evidence of success that directly guides strategy execution and achievement.
With the goal-clarifying impact of strategic measure design, leadership teams will:
- strengthen the rigour of their strategic direction and execution plans
- strengthen their shared ownership for their strategy
- strengthen their commitment to achieving their strategic goals
- strengthen their confidence to communicate the direction to align the rest of the organisation
Only leaders can articulate what success truly looks like for the goals they have set. They need to be in the room when strategic KPIs are designed.
Questions for Creating Your Excellence Advantage
✳️ Do your strategic KPIs provide direct evidence of achieving your strategic direction?
✳️ Are your strategic KPIs developed in concert with the executive team who led strategy development?
✳️ Do your strategic measures inform you as to where your strategy is working and where course-correction is needed?
If you’d like to receive these Inspirations in your inbox every other week, you can subscribe to Kathy’s Excellence Advantage Inspirations Newsletter.
Kathy Letendre, President and Founder of Letendre & Associates, advises organizations and leaders to create their excellence advantage.
Contact Kathy by phone or text at 802-779-4315 or via email.