What KPIs aren’t.Posted: January 5, 2012
Magic Dashboards is all about helping you monitor, understand, and make better decisions from your KPIs, in the most straightforward and masterful way possible.
KPI (Key Performance Indicator) gets badly abused as a term. KPIs are not:
Goals: A KPI has to show actual, real performance, not where you hope or wish to be. It’s fine to set a goal for a KPI to get to, but the KPI itself is just a statement of fact.
One-off measures: KPIs should help you to manage and improve your business performance over time – they tell you how you are doing now, how that relates to where you were in the past, and where you are headed. A one-off measure – for example, how much it cost to build a website – might be useful information, but it’s not a KPI.
Metrics which don’t relate to performance: Most insidiously, in any business there are a tonne of metrics which are accurate measures over time but which tell you nothing useful about the performance of your business area, and which just create dashboard bloat. If nobody uses the number to make decisions, then it isn’t a KPI – it’s just paperwork.
KPIs are accurate numerical measures, tracked consistently over time, and which say something important about your business’s performance.