Imagine a department head’s presentation at the end of the quarter. A slide appears on the screen with a green checkmark next to every Key Performance Indicator (KPI): “The call center answered 95% of calls within 60 seconds,” “The loan department processed 500 applications,” “The marketing team achieved one million impressions.”
Everyone is satisfied, the plan is fulfilled, and bonuses are paid out. But at the same time, the bank’s overall Net Promoter Score (NPS) is falling, its market share is stagnant, and a key strategic goal—such as increasing the number of digital channel users—has barely moved.
How is it possible that everyone is “winning” individually while the organization as a whole is treading water? This is the central problem of a poorly designed performance management system—a system that measures activity, not real impact and results.
The Diagnosis: Why Do KPI and OKR Systems Fail in Banks?
- The “Watermelon” Effect: This is a classic problem where metrics are “green” on the outside (all KPIs are met), but “red” on the inside (the business is actually suffering). This happens when KPIs are poorly formulated and do not reflect real business value. For example, the call center answers calls quickly but fails to resolve the customer’s issue, which only increases their frustration.
- Siloed Metrics: Every department has its own KPIs, which often conflict with those of other departments. The risk department’s goal to minimize credit losses might contradict the sales team’s goal to issue as many loans as possible. The system encourages internal competition, not collaboration.
- OKRs as a To-Do List: Many banks adopt the trendy OKR (Objectives and Key Results) framework but misuse it. The OKR becomes a glorified to-do list. For instance, the Objective is “Improve the mobile app,” and the Key Results are “Launch X feature” and “Redesign the login page.” This measures output (work completed), not outcome (the achieved result).
- Lack of Vertical and Horizontal Alignment: An individual employee’s KPIs often have no clear connection to their department’s goals, which in turn have no clear connection to the bank’s overall strategy. The system is a collection of disconnected metrics, not a cascade of aligned goals flowing from the top of the organization down to every employee.
From Strategy to Results: Our Model for Building an Effective OKR and KPI System
An effective performance management system isn’t just about choosing the right numbers. It’s a transformation of organizational culture and strategic planning. Our approach is based on four fundamental stages:
Step 1: Start with “Why” – Defining Strategic Objectives First
Before a single KPI is written, we facilitate a session with the senior leadership team to define 3-5 crystal-clear, ambitious, and inspiring strategic objectives for the entire bank for the next year. For example: “Become the #1 bank in Georgia for digital customer experience.” These 3-5 objectives become the “single source of truth” for the entire performance system. Every other goal and metric in the organization must directly serve one of these main strategic objectives. This ensures vertical alignment from the very start.
Step 2: Designing Outcome-Focused OKRs
We help teams learn to formulate OKRs correctly. The Objective is the inspirational “what,” and the Key Results are the measurable “how we’ll know we achieved it.”
- Bad OKR (Focused on Output):
- O: Improve the mobile application.
- KR1: Launch 3 new features. KR2: Fix 10 bugs. KR3: Redesign the login page.
- Good OKR (Focused on Outcome):
- O: Create a mobile experience our customers love.
- KR1: Increase the app’s App Store rating from 3.5 to 4.5 stars. KR2: Reduce login-related calls to the call center by 50%. KR3: Increase the percentage of daily active users from 15% to 25%.
This fundamentally shifts the focus from a “being busy” mindset to a “making an impact” mindset.
Step 3: Cascading and Aligning Goals Horizontally and Vertically
Once the top-level OKRs are defined, we begin the cascading process. Each department and then each team creates its own OKRs that directly support the OKRs of the level above them. Crucially, we facilitate horizontal alignment sessions. Teams that must collaborate to achieve a single Key Result (e.g., Marketing, IT, and Product) meet to agree on shared goals and mutual dependencies. This demolishes the problem of siloed metrics. The IT team’s success is now directly linked to the marketing team’s success.
Step 4: From Annual Reviews to a Continuous Performance Dialogue
An effective OKR system is not a “set it and forget it” exercise. It is a living organism that requires constant attention. We help implement a rhythm of regular check-ins (e.g., bi-weekly), where teams review progress against their Key Results. At the same time, we help the company shift from a single, stressful annual performance review to a model of continuous feedback and coaching. The OKR system becomes a tool for constructive dialogue between managers and employees about progress, development, and removing obstacles.
In Conclusion
A broken performance management system is worse than no system at all. It demotivates employees and encourages them to focus on the wrong things. We don’t just offer you a KPI template or an OKR software. We guide you through the deep cultural and strategic work required to build a performance management system that actually works. We help you connect the entire organization, from the CEO’s strategic goals down to every team’s daily activities, creating a powerful engine for focused, measurable growth.
