The right KPI’s are good, but let’s not forget to measure KMI – when innovating. (Episode 15)

Interview with Konstantin Karpushin, Head of Innovations & Technology CIS at KPMG.


We can put as many Key Performance Indicators (KPI’s) as we want in our pursuit to get people to innovate – but the best way to get them to innovate (or to do anything) is to find out what motivates them.

I sat down to talk about innovation and motivation with Konstantin Karpushin. Konstantin knows quite a lot about both. He is the Head of Innovations & Technology CIS at KPMG and he got into that position at a young age very much because of a strong motivation to become partner.

In his case his motivation was a mortgage.

Turns out that Konstantin as a young, junior associate had taken a loan in US Dollars to buy an apartment. At the time his salary was paid in dollars, but suddenly his then employer started to pay out salaries in the local currency at the same time as the global financial crisis hit and just like that his mortgage payments were bigger than his salary …. Konstantin needed to quickly raise his salary. So when he was given the chance to open up the transfer pricing department in Ukraine he jumped on the opportunity and decided to approach it in a very different way than most. Instead of hiring transfer pricing specialists he hired software developers to build an IT-solution that could do perform the tasks of transfer pricing (benchmarking studies) semi-automatically instead of using humans. It was drastically more efficient. His goal had been to generate 2 million dollars in revenue in two years. He reached it in one.

His rapid success made him partner at just 32 years old – probably one of the youngest partners ever in the whole of KPMG. He also got the new title of Head of innovation for the CIS countries.

As Head of innovation he decided that his department should be a revenue generating department to really show the value that it created. They produce prototypes of potential new products and solutions and other departments have to pay to get them done.

When Konstantin was asked to put the Key Performance Indicators for his department he decided to make one of them: “Amount of revenue generated from other departments” to force himself to actively go out and sell his services instead of just hoping that departments would come to him and ask for help.

When talking to Konstantin we reflected over how many managers have KPI’s that are “fluffy” when it comes to the area of innovation. And if the KPI is fluffy the KPI will not get done.

Konstantin wanted his KPI for innovation to be solid – thus his focus on actual projects actively sold. He said: “We should make money.”

He told me about another project they initiated where they were able to take a benchmarking tool where it used to take two weeks to get a result and reduce the time to just 2 days. But he then went back to his team and said: “What if we can get it down to just 60 minutes?” So they did, and this drastically faster system is now active in 9 countries.

When talking to Konstantin about why they were able to develop this dramatically better solution he mentions how the clear, revenue driven, KPI was a key factor. But also how his own internal driver for validation from peers what a big driver for him. To stand on stage in front of thousands of clients and peers to present this groundbreaking solution and get recognition was one of the biggest reasons that he pushed the projects so hard. “Recognition” was his “Key Motivating Indicator” in this case.

A Key Motivation Indicator is an identifiable factor that will drive you the most to innovate. And it based on that ONE thing that drives you to make a key project or task a success. In the example of the benchmarking tool it was his want for peer recognition. In the case of the example of the transfer pricing tool his Key Motivating Indicator (KMI) was his mortgage.

Conclusion: Make sure you have solid KPI’s that actually drive people to innovate in a way that is in line with your company’s goals and strategy. But even more importantly: make sure that you are aware of what the Key Motivating Indicator is for your employees when it comes to what you are asking them to be creative about.

Let’s be honest: My Key Motivating Indicator for doing this interview with Konstantin was a) To learn something new about innovation from someone working with innovation in a big organisation that b) I will be able to use in a speech. I would say I got exactly that.

What is your Key Motivating Indicator in a creative project you are working on right now?




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