As is not uncommon, I went on a pretty hard Twitter rant the other night. Aimed at the industry in general, I hit squarely on a few of the trappings of current software/technology business practices. The problem was that my approach was overwhelmingly negative, and while negativity serves to provoke and stir up controversy, it more often exacerbates the problems at hand as the targets of criticism simply entrench themselves deeper. Additionally, I was missing heaps of context that, in hindsight, makes my point complete. So, the series of blog posts that follow are simply a flushing out of my prior rant. For the sake of accountability I will start each post with my original thought, tear it down and then reshape it into the proper thesis it should have been.

Number 2

Controversial Statement: “Employees cannot evaluate their contributions because KPIs are not broadly accessible.”

What it should have said: “Helping employees correlate their actions to improving business metrics is a win-win feedback loop.”

I’ve never been on a snipe hunt, but my guess is that it’s similar to finding a business that actually builds KPIs specific to each tier and segment of their organization.

Wait.

Take a deep breath Bill … before you rant again.

Let’s back up a level and talk about what KPIs are and then see why they might be useful across an organization, regardless of size or revenue.

So, what are these ‘key performance indicators (KPIs)’? As the name suggests, they are metrics that a business, organization, team, or individual can use to evaluate the success of their business activities. KPIs can be focused on optimization, growth or even innovation (more on this later) and typically take factors like customer retention, revenue, SLAs, service quality, compliance, etc., into account. The goal is to have something, or a collection of somethings generated at predetermined intervals for use as a yard stick in measuring forward business progress.

“I only write code”, you say or … “I’m just a product owner.” “Business is not my thing.” “I know I am doing well when I get a fat bonus at the end of the year”

Well, not quite so fast. Do you actually ‘know’ why you got that bonus? Was it all the new features you shipped? Was it all the bugs you fixed? Or was it some manager’s wishy-washy opinion of your contribution to ___ (fill in the blank with revenue, growth, optimization, etc.)? See my point?
Without KPIs you don’t know why you got that bonus, and therefore, you don’t actually understand the value you or your team brings to your organization.

That said keep Hanlon’s Razor in mind and “Never ascribe to malice what can be attributed to incompetence”. While some underhanded managers may feel that it’s to their benefit for employees to not understand their contribution to the organization’s performance (think wage suppression); I would hazard a guess that most managers don’t themselves have a good handle on how to track their own performance, let alone that of their teams. So, if our managers don’t understand their true performance, and developers don’t understand our true performance … how is this organization even functioning. Great Question!

If you’ve done any lean enterprise reading then this will be familiar, if not, go read this book(http://oreil.ly/1FFoKD7) then come back … I’ll wait.

Srsly.

I said - I’ll wait.

You’re still here…

Fine, but don’t blame me when I spoil the wicked awesome plot twist at the ending.

The basic premise is that organizations can be thought to have three tiers:

1. an optimization tier that focuses on protecting existing revenue sources and tuning operational behaviors.
2. a growth tier that focuses on new customer acquisition, expanding services and features to existing customers, overall generating additional revenue above existing sources.
3. an innovation tier that focuses on long term strategies/bets on the future. And because the core functionality of each tier is different, the KPIs that measure success in each tier are necessarily different. You can’t measure the success of innovation by looking at cost cutting measures after all.

Which brings me back to the point of my tweet - “Helping employees correlate their actions to improving business metrics …”. By building KPIs for our organizations, teams, and employees, we can help them better understand their contribution to the success of the business overall. Additionally, the small decisions an individual makes on a daily basis can be better informed and they will naturally further optimize business operations.

So, for the developers reading this - think about what role you have in your organization (optimizing, growing, or innovating) and pester your manager for KPIs that you can use to make your organization smarter, faster and leaner … and then at review time, drop the KPI mic for a fat bonus next year!

See Part I here: Valuing Developers Over Intellectual Property