Can the manager manage their indicators? | Optimal amount of KPIs
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Performance management systems are becoming increasingly popular in organizations. Performance management used to be synonymous with financial management. It was quite an ordeal to get your hands on non-financial management information. These days, it’s the other way around. When managing their organizations, managers are increasingly dealing with information overload.

Management dashboards and information systems

New information systems can fill management dashboards, such as the balanced scorecard, with hundreds of KPIs without breaking a sweat. Technically, the amount of indicators is virtually limitless. The same can be said for the amount of aggregation levels and the information refresh rate. As a result, the possibilities of drilling down, zooming in, and updating are greater than ever before. It brings to mind the comparison to an F-16 that can do more than its pilot.

Example scenarios

The following three scenarios can clarify the problem mentioned above.

  1. A busy top manager of an insurance agency gets monthly reports on 80 indicators. He gives the order to bring this back down to 30.
  2. A cluster manager in a hospital has been receiving detailed reports with over 40 indicators about her unit. Of these, she uses 5. These all relate to staff deployment and absences due to sickness.
  3. A manager discusses team performance with their employees during a weekly meeting. The team’s performance is measured using 12 indicators. In practice, it turns out that the same 7 indicators always lead to course-correction, while the other 5 remain out of view.

Can the managers deal with information overload?

Can the manager deal with such information systems, or are they getting mired in information overload?

This question is highly relevant:

  • We’ve studied business literature and found no research that proved how many Key Performance Indicators a manager can use effectively to manage their own organization departments.
  • While technology is opening up more and more possibilities, managers have to focus on a limited amount of clear objectives. By focusing on a limited amount of subjects, managers force themselves to make necessary choices.
  • The amount of indicators that a manager can wield determines the amount of objectives that a manager will have to delegate and inspire commitment for.

Practical research into the span of information control

So, we have every reason to do practical research into the span of information control. Passionned Group has decided to do such research and ask managers how many indicators they can wield, and which factors positively or negatively influence this amount. Monterey Performance Group is our partner in this research and is taking care of the web-based results processing.

We’ve successfully completed this research. Interested? Contact us for more information.

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