KPIs do not make a strategy

It's a prime example of the catastrophic confusion of control and strategy: Boeing, once synonymous with safety and engineering excellence, has mutated into a symbol of management failure. Airplane doors are flying out of the cabin at 9,000 meters, internal whistleblowers are reporting structural pressure to conceal quality problems – and meanwhile, management is fixated on production targets, margins, and stock prices.

Where is the strategy heading? When numbers take the wheel, even the strongest companies can lose their way.

"KPIs instead of safety culture" – that's the unofficial motto that Boeing has allegedly adopted for years, according to U.S. Senate hearings. Senators openly speak of a system in which "stock-price-obsessed managers" prefer to optimize numbers rather than protect lives.

And one wonders: How many organizations in business, politics and administration are making the same mistake – only with less media-effective consequences?

When numbers are supposed to shape things: The big KPI error

In many companies, KPIs have become a religion. Daily checks are carried out meticulously to determine whether sales and profits are developing in the planned direction. Don't get me wrong: KPIs are essential; they provide important information about what has been achieved. However, they measure past developments, thus they are retrospective indicators. However, they are hardly suitable as strategic goals because they say nothing about what concrete actions need to be taken to shape the future.

Target structure instead of belief in numbers

Anyone who wants to work seriously strategically needs a clear target structure that does not revolve around traditional quarterly figures, but rather around impact:

1. Vision: What are our concrete long-term goals?

2. Strategic challenges: What real problems do we need to solve to achieve these?

3. Strategic goals: What impact do we want to achieve and how do we measure goal achievement?

Strategic goals direct your focus forward. They are your guiding light and help you adjust the levers that make the desired success possible. For example, if sales are stagnating, setting a "10% increase in sales" as a goal won't help. First, you need to determine the reason: Are customers buying less often? Is the product quality poor? Is our advertising not reaching our target audience? Are we suddenly losing more customers than before?

Only when it is clear which lever is decisive can strategic goals be derived that are geared to impact and can be made measurable through appropriate key performance indicators: The goal of improving product quality will require significantly different measures than the goal of increasing the number of new customers.

And only when this question has been clarified can KPIs come into play - as companions, not as drivers.

While this sounds plausible, it's rarely put into practice. Many managers are trapped in the "KPI world," lack the expertise, or are unwilling to delve into the details. They crave rational justification, the illusion of control, and KPI dashboards with flashing green numbers. Strategic goals, however, don't begin with the question "What can we measure?" but rather with "What do we want to achieve?"

KPIs help make progress visible: They show the results of your work. They're your rearview mirror, showing you how fast you're going—but they don't tell you whether you're on the right track. And ultimately, whether your strategy was successful or not.

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Impulses for all who want to shape rather than count:

• Which of our “goals” are actually just KPIs with lipstick?

• Which challenges are we ignoring because they cannot (yet) be accurately measured?

• Do we know the leading indicators of our most important KPIs and do we work with them?