markgraydk

Sadly, you are probably right, at least that the majority of cases misuse KPIs. But dont throw the baby out with the bathwater. KPIs reveal patterns, force you attention towards certain issues and create a base for discussion. They can also pidgeon whole you into misunderstanding what is happening though.

In my experience, KPIs work better as a tool for communication and as input for analysis rather than for optimization of goals. In a previous job I worked with aggregating the Balanced Scorecard for a 10,000 employee corporation. On such an aggregate level where the KPIs are composites of many underlying decisions there is less of a risk of perverse incentives. Instead, they are used for comparing trends across time and similar purposes.

KPIs targeted at individuals or smaller teams are very different than that example though.

I agree that KPIs are misused quite a lot but that does change the fact that they can provide valuable information and setup incentives to follow certain goals.

I think it is rather simplistic to say that having more than one KPI can be reduced to "a more complicate KPI". Sure, it won't solve all problems with badly setup KPIs but to allow for detailed incentive structures you need detailed KPIs.

My major point is still that decision making based on KPIs should not be made solely on what the figures (or any red/yellow/green flag next to it) show. It requires analysis - which is something that I've always seen done.

The good thing about KPIs is that it can be a great communication tool and open discusions about why a trend has changed or similar things.

In that case you should have more than just one KPI to combat any perverse incentives. Further, any decision making based on the KPIs should take into account thorough analysis.

It's far from perfect but making things quantifiable does have a lot of benefits.

Over-regulation is a bad term when it is rather a problem of bad regulation. What is needed is re-regulation not deregulation.

Considering the economic defintion of a natural monopoly, deregulation would be the wrong path to go down. Instead, we should see more regulation like that of "last mile" and caps on or forced wholesale pricing.

I was working on creating an MVNO (http://en.wikipedia.org/wiki/Mobile_virtual_network_operator) at one point but after crunching the numbers we decided (among other reasons) not to pursue it further. We were looking at handing over about 80% of turnover, even with fairly good laws in place (EU). On top of that, the contracts we were looking at where all based on bundling of services (i.e. XX amount of data, minutes and texts) which would have made our business more of a game of demand estimation. We could perhaps have gotten a small margin if we could estimate what our users would use of services better than what we paid for them wholesale. This has also led to the unfortunate business strategy of most MVNOs around here where they look for a quick exit by being bought out by the infrastructure owner when they have gotten enough customers. Few make it into into black numbers before that.

A natural monopoly is an economic concept about how high fixed costs makes a single company the most efficient. Regulation of a natural monopoly is secondary to that. A telco might then be a both natural monopoly, due to how the business works, but also have a government-granted monopoly due to licenes etc.