/key_performance_indicator

Performance metrics

Key Performance Indicator (KPI)

Key Performance Indicator

What is a KPI?

A key performance indicator (KPI) is a type of performance measurement.

  • A KPI evaluates the success of an organization or activity.
  • Choosing the right KPIs needs good understanding of what is important to the or

Success examples:

  • Repeated periodic achievement of an operational goal, such as 100% customer satistfaction, or zero defects, etc.
  • Making progress toward strategic goals.

Wikipedia pages:

Our related guides that use KPIs:

How to define a KPI

To define a KPI, you can cover these areas:

  • Title: use an exact name to avoid ambiguity
  • Objective: the relation of the indicator with the organizational objectives must be clear
  • Scope: state the areas of business and/or parts of the organization that are included and/or excluded.
  • Target: Benchmarks must be determined in order to monitor progress
  • Formula: the exact calculation of the indicator
  • Units: what is/are the unit(s) of measurement in use
  • Frequency: when is the indicator recorded and reported
  • Data source: the exact data sources involved in calculating a indicator value
  • Owner: the accountable person for the indicator
  • Comments: any outstanding issues regarding the indicator

How to improve a KPI

To improve a KPI, you can ask these questions:

  • Does it clearly define what constitutes success?
  • Does it clearly relate to a strategic objective and key result (OKR)?
  • Does it provide the information required to set SMART goals?
  • Does it accurately portray progress and probability of achieving both long-term strategic objectives and near-term milestones?
  • Does it identify the root causes of barriers?
  • Does it focus the organization on the priority improvement needs?
  • Does it drive the behavior and actions required to achieve the objectives?
  • Does it align work with value?

KPI examples

KPI examples in various areas of interest:

If you're interested in KPIs for other areas, then please let us know.

KPI vs. KLI vs. KPM

  • A Key Performance Indicator (KPI) is the top-level concept in this guide.

  • A Key Leading Indicator (KLI) is a KPI that tends to show up earliest.

  • A Key Performance Measure (KPM) is how you measure a KPI.

Measure vs. metric

There is overlap between a measure and a metric.

  • A measures are concrete, usually measure one thing, and are quantitative in nature (e.g. I have five apples).

  • A metric describe a quality and require a measurement baseline (I have five more apples than I did yesterday).

Examples:

  • A measure can be useful for demonstrating workloads and activity

  • A metric can be useful for evaluating compliance, processes effectiveness, and measuring success against established objectives.

Credits and links