"Poor Key Performance Indicators (KPIs) can devastate a business": Discussion by Boris Dyakonov on metrics, strategies, and the potential disastrous consequences of inadequate KPIs

"Poor Key Performance Indicators (KPIs) can devastate a business": Discussion by Boris Dyakonov on metrics, strategies, and the potential disastrous consequences of inadequate KPIs

In the world of business, the mantra "You can't manage what you can't measure" has become a popular catchphrase, leading to the widespread use of Key Performance Indicators (KPIs). However, a closer look at this approach, as demonstrated by Boris Dyakonov, the CEO of Tinkoff Bank, reveals potential pitfalls.

Dyakonov, a seasoned entrepreneur, has been steering the ship at the bank formerly known as "Tochka" for some time now. His unique perspective on business management has led to some intriguing insights. For instance, he believes that if a client calls a business, it means the business has already made a mistake.

This perspective is reflected in his approach to KPIs. Unlike many managers who set KPIs as key indicators of effectiveness, Dyakonov sees them as tools to measure the health of the business, not as a means to control it. He extends this concept to an amusing example: a photo of a worm gear and a drawing of a worm gear, where the drawing might not accurately represent the actual worm gear.

The danger, as Dyakonov sees it, is in over-relying on KPIs and metrics. This was illustrated in an example he extended to a cat, with KPIs being set for the feline, but a cat was not produced from the picture. This serves as a reminder that while KPIs can provide valuable insights, they should not be the sole focus, lest we lose sight of the essence of the business.

The call to action, as Dyakonov suggests, is to "protect the bird," implying the importance of preserving the original spirit of the business while still analysing and improving it. This approach is echoed in his handling of client issues. Rather than focusing on KPIs such as the number of calls per operator per shift and average call duration in contact centres, Dyakonov prioritises resolving client issues on the first call, placing client satisfaction above KPI execution.

In his initial actions when starting a new job or direction, Dyakonov often sets up reports. However, he cautions against this becoming the sole focus, as it may only produce more reports without addressing the root issue. Instead, control comes from finding causal connections and influencing what can be controlled.

This advice is not without precedent. A lecturer's story about studying at a theological seminary and dissecting a bird serves as a metaphor for understanding and dissecting something too much, leading to the loss of the original object. In business, the danger is that over-analysis could cause the "bird" (business) to stop functioning effectively.

Time spent in a system can be a useful metric, but it cannot be directly influenced or set as a KPI. Managers must, therefore, be mindful of the balance between analysis and action, ensuring that they do not lose sight of the bigger picture in their pursuit of metrics and KPI execution. After all, in the end, it is the health and effectiveness of the business that truly matters.

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