The Business Case for Key Development Indicators
Dr Bob Aubrey proposes using key development indicators (KDIs) to balance key performance indicators (KPIs) when developing people beyond short-term performance, a concept that is more fully explored in his newest book, Measure of Man.
A global pharmaceutical company wanted to make a major change in its sales process and chose Malaysia as the country to pilot a new technology. The General Manager (GM) for Malaysia knew that adopting the technology would depend on whether the sales teams viewed the new system as positive or negative for their work and future careers.
The GM decided to focus on the human dimension of change by using KDIs to manage behaviour change and learning. She ensured the answer to the question “Why are we doing this?” elicited a response that was more than about using a new technology to increase sales productivity. The second part of the answer was about people — how to develop the best sales force in Malaysia and provide sustainable careers for sales representatives.
The KDI programme was for both sales managers and their sales teams. Managers were asked to be coaches for each sales representative during the change process, and managerial KDIs measured how well they supported learning and personal change. For the sales representatives, the introduction of KDIs meant that they had to think about their own development, rather than just meeting their sales targets. Typical KDIs were about learning, motivation and career development. For many sales representatives it was the first time they had a chance to talk about their hopes, fears and development needs, not to mention finding indicators to measure their own development.
The use of KDIs allowed the pharmaceutical company to successfully implement the change process and improve sales productivity, while improving engagement and keeping key talent. It was also the opportunity to improve the people development capabilities of managers and the self-development capabilities of sales representatives. The use of KDIs for developing people through change became the template implementation of the new technology across the ASEAN region.
Why Key Development Indicators?
Traditionally, measurement is about performance goals. These goals are defined in the strategic planning process and cascade down to business units, teams and individuals as KPIs. In the same way, KDIs are cascaded through the organisation to the individual, starting from the development strategy. A strategic KDI can be about change, as in the pharmaceutical company’s case, but it can also be about innovation, service quality or building the corporate culture. KDIs for innovation would be about creativity; for service quality they would be about caring for customers; and for corporate culture they would be about values and a mission.
Although KDIs are ‘soft’ they must nevertheless be measurable. The difficulty is that measuring people requires a more complex language than accounting or sales. The table shows how measuring performance and development go together.
Companies find it difficult to introduce KDIs if the culture is only about short-term performance. Another difficulty is the educational background of managers, which is often numbers-based and does not provide a basis for the more complex language of KDIs. Using a strategic change to introduce KDIs, as in the case of the pharmaceutical company, could work better than introducing it as just another HR tool. Ultimately, development is defined as a change. That change must be measured in some way. KDIs provide organisations with a language for the measurement of people, which aims to measure the human dimension, measuring values rather than costs or hours. Ultimately, this helps companies plan, track and improve development.
This article first appeared in Issue 9 of HQ Asia (2015).