“Profitability shouldn’t even be a Key Performance Indicator (KPI),” asserts Veejay Madhavan, a seasoned corporate leader with decades of experience. “It’s simply a basic requirement.”
Veejay’s perspective on business performance metrics is refreshingly candid. He challenges the conventional wisdom surrounding KPIs, particularly their relevance and effectiveness in today’s corporate landscape.
“We’re often handed financial KPIs like revenue and profit margins,” he explains, “but if a company isn’t profitable, no one retains their job. That’s fundamental. It should be a dashboard item, not a KPI.”
According to Veejay, the metrics used in organizations frequently miss the mark—not because numbers lack significance, but because the individuals tasked with achieving those numbers are neither aligned nor adequately equipped for success. As the founder of Oulbyz, a consulting firm dedicated to fostering high-performing, multigenerational teams in the era of AI, Veejay has turned his focus to a critical yet often overlooked segment of most organizations: middle management.
“If your KPIs don’t resonate with the people responsible for achieving them, what purpose do they serve?” he questions.
The Disconnect Between Strategy and Execution
At the core of Veejay Madhavan’s critique lies a fundamental disconnect: while boards and executives establish lofty financial targets, these directives are seldom translated into actionable goals for those further down the hierarchy.
“We can’t simply copy and paste a KPI from the board and declare, ‘This is our KPI at the leadership level,’” he emphasizes. “Leadership must consider the broader picture. However, that doesn’t mean the same KPI should be handed down unchanged.”
This, he argues, is where many organizations falter. Metrics that may be strategically sound at the executive level often lose their clarity as they cascade down the organizational structure. More troubling, they can become sources of confusion or inertia.
For instance, consider a scenario where a manager is tasked with generating $100 million in revenue. “They don’t have control over that,” Veejay points out. “They can’t dictate how much a customer will spend, which package they’ll select, or whether they’ll remain a customer at all. However, if you instruct them to identify 100,000 corporate clients who experience the pain points your company addresses, that’s actionable. That’s within their control.”
In essence, KPIs should reflect the ability to influence outcomes rather than merely embody ambitious targets.
Why Managers Feel Overwhelmed
The consequence of this misalignment? Overworked and bewildered middle managers.
“In a company, everything appears urgent and important,” he states. “How can there be a hundred things that are urgent? If everything is urgent, something is fundamentally wrong.”
Veejay paints a vivid picture of managers being pulled in multiple directions—upward to executives, downward to their teams, and laterally across departments—without a clear understanding of their true priorities.
He likens this situation to an overwhelmed air traffic control tower. “If those managing the fleet don’t know which plane to prioritize, which runway to use, and they’re restricted to a single runway, what happens? You end up with a backlog of planes. Everyone is left waiting. Then, you park a large aircraft in front of a smaller one, forcing the smaller plane to wait due to potential turbulence.”
Veejay frequently employs aviation analogies in his discussions because they provide a tangible way to grasp systems thinking and organizational flow. The message is clear: if leaders fail to prioritize and communicate effectively, their managers cannot execute successfully.
“Judgment comes swiftly,” he adds. “You’re asked, ‘Why haven’t you taken off yet?’ But no one stops to consider that a large aircraft is blocking your path.”
The KPI Without Ownership
In Veejay’s experience, one of the most prevalent breakdowns in organizations is the lack of ownership over KPIs. When KPIs become detached from the reality of daily operations, and when they don’t accurately reflect what employees can realistically achieve, they lose their significance.
“We often see team members saying, ‘I’ve completed my task. Now I’m waiting for someone else to finish theirs.’ That’s not collaboration; that’s leakage,” he explains. “Their KPIs were designed this way, so they don’t feel like part of a team; they merely completed a task.”
He refers to this phenomenon as an “energy leak”—a moment when capability, insight, or initiative is withheld because an individual doesn’t feel accountable for the larger objective.
“If you assign someone a target and say, ‘That’s your responsibility,’ they won’t venture beyond that boundary, even if they could contribute. Even if they possess valuable insights.”
For Veejay, a genuinely high-performing team operates differently. The engineer doesn’t merely write code; the operations personnel don’t just monitor dashboards. Everyone is aligned around a common goal and empowered to contribute across departmental boundaries.
“If we state that the team’s objective is to triple the customer base, then everyone shares that goal—not just from their functional perspective, but as a cohesive unit. That’s what true ownership looks like.”
Revamping the Corporate Framework
This transition from individual KPIs to team-level ownership necessitates structural changes. However, Veejay notes that this is where many organizations resist progress.
“You may want to travel from Singapore to New York, but your aircraft is still a 737. No one is going to endure an 18-hour flight in economy class without comfort. You need to upgrade the aircraft.”
In his analogy, the aircraft represents the organizational structure and culture. Just as a plane must be equipped for long-haul flights, organizations must adapt their frameworks to support collaborative, high-performance environments.
To achieve this, Veejay suggests several strategies:
- Redefine KPIs: Shift from individual metrics to team-oriented goals that emphasize collaboration.
- Enhance Communication: Foster open dialogue between leadership and middle management to ensure clarity of objectives.
- Empower Teams: Encourage team members to take ownership of their contributions towards shared goals.
- Invest in Training: Provide resources and training to equip managers with the skills needed to navigate complex environments.
By implementing these strategies, organizations can create a more cohesive and effective operational framework that empowers middle managers and aligns their efforts with overarching business objectives.
Conclusion
The challenges posed by traditional KPIs are significant, particularly for middle managers who often find themselves caught in a web of conflicting priorities and unclear expectations. Veejay Madhavan’s insights shed light on the need for a fundamental reevaluation of how performance metrics are defined and utilized within organizations.
By fostering a culture of collaboration, redefining ownership, and enhancing communication, companies can bridge the gap between strategy and execution. This shift not only empowers middle managers but also drives overall organizational success in an increasingly complex business landscape.
Frequently Asked Questions (FAQ)
What are Key Performance Indicators (KPIs)?
KPIs are measurable values that demonstrate how effectively an organization is achieving key business objectives. They help organizations assess their success at reaching targets.
Why are KPIs important for middle managers?
KPIs provide middle managers with clear objectives and benchmarks for performance, helping them align their teams’ efforts with organizational goals.
What are the common pitfalls of using KPIs?
Common pitfalls include misalignment with actual work, lack of ownership, and failure to communicate effectively, leading to confusion and inefficiency.
How can organizations improve their KPI systems?
Organizations can improve their KPI systems by redefining metrics to focus on team collaboration, enhancing communication, and empowering employees to take ownership of their contributions.
What is the impact of poorly defined KPIs on employee performance?
Poorly defined KPIs can lead to frustration, disengagement, and a lack of accountability among employees, ultimately hindering overall performance and productivity.
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