3 ms·

Maybe a symptom of trading efficiency for resiliency?

• hef19898 5y ago
  In my experience, efficiency usually results in an increased level of resilience. You can easily sacrifice both, jeopardizing profits. Every time I saw that happen, it turned out some department-specific KPI (it doesn't matter which department, finance, production, sales, logistics,..) looked really good while that happened. All other sucked, but nobody cared. IMHO, this over emphasis on one silo, at the expense of all the others, puts so much stress on those other functions that they only can crack if something external puts even more stress on them. I guess that is what Covid and all the resulting disruptions is doing. Some orgs crack earlier than others, every one does have its cracking point so. The question is if an organization can adapt before it reaches its breaking point. Southwest it seems reached it before others.
  • Zigurd 5y ago
    I have never seen a KPI that is sophisticated enough to not get gamed and not create perverse incentives.
    • hef19898 5y ago
      Single KPIs definitely not. Good system come close enough, more often then not I think the issue is the culture that prioritizes one KPI over all others. Or one department's priority.
    • nradov 5y ago
      That's why large enterprises typically use something like a balanced scorecard instead of individual KPIs. https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2 https://hbr.org/1992/01/the-balanced-scorecard-measures-that...