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Why your KPI methodology should use 'right brain' words- Valutrics

CAMBRIDGE, Mass. — Despite the appeal of trendy technologies like artificial intelligence, one consultant is encouraging CIOs to go back to business intelligence basics and rethink their key performance indicator methodology.

Mico Yuk, CEO and co-founder of the consultancy BI Brainz Group in Atlanta, said companies are still struggling to make key performance indicators actionable — and not for lack of trying. It turns out the real stumbling block isn’t data, it’s language.

“KPIs are a challenge because of people, not because of measurements. A lot of problems that exist with KPIs are in the way that people interpret them,” she said in an interview at the recent Real Business Intelligence Conference.

Yuk sat down with SearchCIO and talked about how her key performance indicator (KPI) methodology, known as WHW, breaks KPIs into simple components and why her research drove her to consider the psychological impact of KPI names. This QA has been edited for brevity and clarity.

You recommend teams should have at least three but no more than five KPIs. What’s the science behind that advice?

The KPI methodology you ascribe to is called WHW. What is WHW?

Yuk: WHW stands for What, How and When. We took Peter Drucker’s SMART concept. Everybody knows him. He’s the ‘If you can’t see it, then you can’t measure it’ guy. His methodology is called SMART, which stands for specific, measurable, accurate, results-oriented, and time-oriented. He says you have to have all five elements in your KPI in order for it to be useful. We said we’re going look at what Drucker was recommending, extract those elements and turn them into a sentence structure. To do this you take any KPI and ask yourself three questions: What do you need to do with it? That’s the W. By how much? That’s the H. By when? That’s the W. You use those answers to rename your KPI so that it reads like this: The action, the KPI name, the how much, and the when. That is SMART hacked.

Why do you find WHW to be a better KPI methodology?

Yuk: It’s easier. We don’t think one KPI methodology is necessarily better than the other. Using OKRs [Objectives and Key Results] are equally as effective, for instance. But we do find that having just a sentence where someone can plug in words is much faster. Imagine going to a company and saying, ‘You have 20 KPIs. We’re going to transform all of them.’ Some of the methodologies require quite a bit of work to get that done. We find that when we show companies a sentence structure and they are able to just answer, answer, answer and see the transformation, it’s an ‘ah-ha’ moment for them. Not to mention there’s the consumption part of it. Now that you’re specific, it also makes it easier to break that big goal down into smaller goals for people to consume.

You’ve said it’s important to rename KPIs, but the language you use is equally as important. What led you to that conclusion?

Yuk: We are data visualization specialists, but when we started nine years ago we found that [our visualizations] were becoming garbage in, garbage out. We kept saying, ‘This looks great, but it’s not effective. Why?’ We then [looked at] what we were visualizing, and we realized that the KPIs we were visualizing were the problem — not the type of charts, not the color, not the prettiness. That led us to say, ‘We’ve got to look at these KPIs closely and figure out how to make these KPIs smarter.’ That was our shared challenge. That led us into learning more about ‘right-brain wording,’ learning about simplicity, learning about exactly what the perfect KPI looks like after we evaluated as many methodologies as we could find on the market. What we concluded is that it all starts with your KPI name.

What is a “right-brain wording?”

Yuk: If you go online and you look up right brain versus left brain [wording], there are amazing diagrams. They show that your right brain controls your creativity while your left brain is more analytical. Most developers use the left side of their brains — analytics, coding, all that complex stuff. The artists of the world, the creatives who may not be able to understand complex math, they use the right part of their brain. But what you find on the creative side is that there is a cortex activity that happens when you use certain words that [are] visceral. We found that it is one thing to rename your KPIs, but it is another thing to get [the wording right] so that it resonates with people.

Let’s take profit margin as an example, and let’s say that after you use our WHW hack, the revised KPI name is ‘increase profit margin How can CIOs help make employees feel connected to top-line goals with KPIs?

Yuk: After we finish wordsmithing the KPI’s name, we focus on impact. A CIO in New York told me a long time ago, ‘One of the most important things you need to remember is that everybody has to be tuned into WIFM.’ And I asked, ‘What’s that?’ He said, ‘What’s in it for me?’

The good thing about transforming a KPI into the WHW format — it now has the action, the KPI name, the how much, the You tend to find two things. Not only can you individualize expectations, but you can also say, now that you have that individual goal, I can show you how it ties back into the overall goal and how other people are performing compared to you. People innately want to be competitive. They want to be on top — the leaderboard syndrome.

Those two elements are keys to having impact with your KPIs. Again, it’s a bit more psychological, but KPIs aren’t working. So we dug deep into the more cognitive side to try to figure out how to make them resonate with people and the [psychological] rabbit hole goes very deep. Start with the name.