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  • Made to Measure - the strange effects of Service Levels and Key Performance Indicators

    Back in the 1930's, the train journey from Paddington to Bristol was faster than today. Trains were powered by men shovelling coal into a boiler to generate steam, and signals were operated by men in something called a signal box. It was just like a giant Hornby train set. But back in the 1930's, they did not have rail franchises and KPI's, with penalties if the trains don't run on time. Today, the train operators build contingency into their timetables, adding 15 minutes or more to longer journeys, to avoid financial sanctions. And remember the hospital that kept patients in trolleys in the car park rather than bringing them into Accident & Emergency, to make sure that they did not breach their waiting time targets ? The author has also heard anecdotal evidence about a public authority that had several hundred KPI's on a complex BPO contract - they needed an army of managers to digest the management information.

    Of course, it would be absurd to have services with no standards of performance, and where there are standards, then performance needs to be measured. But KPI's and service levels need to be proportionate - bear in mind that they can encourage the opposite behaviour to that which is intended, and they cost money to administer. Indeed, set the bar too high, and it will drive up the cost of performance.


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