Creating KPIs - The Practice of Cloud System Administration - page 391

Themostcommonmistakeweseeismanagersskippingthisfirststepandgoingdirectly
tocreatingaKPIformula.Takingthisshortcutisabadidea.Ifyoudon'tfirstdecideonthe
destination, it isn't likely you'll get there.
19.2.2 Step 2: Quantify Distance to the Ideal
Ask yourself, how can we measure how far we are now from this ideal? We create many
candidate KPIs that might measure this distance. The measurement might be a time dura-
tion, a count, the number of times something happens or doesn't happen, a quantity, or any
other numerical quantification. The measurement should be real and repeatable.
For example, if the ideal is users having a web experience that is faster than with native
software applications on a PC, the way to measure our distance to the ideal would involve
measuringpageloadtime.Iftheidealenvisionsaworldwithnosecuritybreaches,theway
to measure how far we are from that ideal would be the count of known security breaches
detected each month. The ideal might also be that all detected intrusions are investigated
within a certain time frame, in which case we would quantify both the time from detection
to start of investigation and the duration of the investigation.
19.2.3 Step 3: Imagine How Behavior Will Change
For each potential KPI, try to defeat it. What are all the ways that people could behave but
still match the incentive? How could a person maximize his or her personal gain?
Set aside hope that employees will “just behave.” If they are following your formula,
they're behaving. You can't expect them to read your mind and understand your intention.
Salespeople make a goodexample. Ifthey are selling many products, they will immedi-
atelyanalyzethecommissionstructureandfigureoutwhichproducttofocusontomaxim-
izetheuseoftheirtime.Iftheyselltwoproductswiththesamepriceandsamecommission
rate but one is easier to sell, the other product will be starved for attention. If they sell 10
products, each with a different price, commission, and likelihood of a successful sale, they
will do the math and figure out which products to actively sell; the others will be ignored.
This is not cheating, but rather following the rules they've been given. This is why some
companies have separate sales teams for big customers and small customers. Who would
spendtime tryingtomake $1,000deals with small customers whentheycanmake million-
dollar deals with big companies? The sales cycle would have to be 1000 times longer for
the big deals to be less efficient. Without dedicated sales teams, the company would miss
out on any sales to small companies.
Similarly, engineers will examine the KPIs given and follow them as stated. Again, this
isnot“gamingthesystem,”butsimplyfollowingtherules.Thisisdoingwhattheengineers
were told to do. Gaming the system would be falsifying logs or going around the KPIs to