The Role of Key Performance Indicators in Managing a Media Department
It has been busy here at TeamPeople as we started providing service to a large new client in New York and also renewed contracts with a couple of our favorite clients. Along with the adrenaline rush we all experienced as part of a successful bid/re-bid comes the reality of performance. Our senior management team spread out to recruit and hire more than 30 full-time staff within 30 days. We also had contracts to negotiate and finalize. It required a complete team effort to handle the myriad of tasks that required attention.
I spent some time helping with the contractual negotiations on several contracts and was intrigued by the wide range of key performance indicators (“KPI’s”) that our clients included in our contractual requirements. Why did they select these specific KPI’s to include in our contracts? What information did these KPI’s provide them that helped them better manage their business?
3 Categories of KPI's:
My first step was to try and group the KPI’s in a logical order. It seemed like most of the KPI’s were non-financial related so I sorted them into the following three categories: 1) Human Capital Based, 2) Relational Based, 3) Structural Based.
1. Human Capital Based KPI's
These KPI’s relate to the workforce being utilized.
As a media staffing company, many of the Human Capital KPI’s included in the contracts relate to requirements for us to recruit, vet and fill the position with highly skilled candidates within a defined timeframe. Examples include a) average time to fill vacancies, b) average number of responses to the job posting and c) performance of the new employee within an initial review period. We may also be required to ensure that a certain number of our staff have specific certifications such as InfoComm’s Certified Technology Specialist or an Avid’s Certification. KPI’s may also be created to ensure that staff obtain a minimum number of training hours each year.
2. Relational Based KPI's
These KPI’s are designed to evaluate the effectiveness of the relationships between our client’s department, our staff and services and their internal customers.
Relational KPI’s included in our contracts seem to focus on the relationship between our staff and our client’s customers. I refer to these as customer satisfaction KPI’s. When we manage staff at our client’s facility we interact regularly with individuals from other departments. Frequently these “internal customers” can be senior managers such as C suite individuals or department heads. For example, our production staff may have a KPI that requires 90% of the in-house clients to rate their service either good or excellent. We use a variety of survey techniques to support these KPI’s.
3. Structural Based KPI's
These KPI's are designing KPI’s that evaluate the effectiveness of the processes in place to provide the required services
Structural based KPI’s tend to be operational and process oriented. For example, our help desk staff might have a KPI to respond to an AV incident within 15 minutes 99% of the time. Our engineering staff may have KPI’s related to performing maintenance services on equipment within specified periods of time.
Choosing the Right KPI's:
Typically, the KPI’s will require the preparation of daily, weekly, monthly or quarterly reports for our clients. We encourage them to meet with our contract leadership at least quarterly to review performance and look for ways to improve. What we like to call “raise the bar” meetings.
Which brings me back to my question. Why did our client’s select the specific KPI’s proposed in our contract? I also wondered if they were effective in helping them manage their business. I recently read an interesting article in the Harvard Business Review by Andrew Likierman titled “The Five Traps of Performance Measurement.” This article talks about five traps that companies routinely fall into when implementing a performance management strategy. The traps mentioned in the article are:
- Measuring against yourself
- Looking backward
- Putting your faith in numbers
- Gaming your metrics
- Sticking to your numbers too long
I think we all have fallen into one of the traps mentioned. Take the “Measuring against yourself” trap. I know we have created internal performance measures that track results against our internal plan and we are all pleased when we meet or exceed the goal. We have exceeded our internal plan but the real question is are we out-performing the competition. I expect any experienced manager has at one time or another learned how to “game the metrics.”
