My manager asked me to track Key Performance Indicators every month. But what exactly are they?
Key Performance Indicators, or KPIs for short, are metrics that help us understand whether we’re progressing toward a goal, or whether we’ve reached the expected results.
For example, with my team, we track customer satisfaction, hoping it increases, as well as the time it takes to deliver a feature, from idea to production.
What matters isn’t measuring everything that can be measured, but only what’s relevant. A KPI must be based on a goal, something achievable, so we can see if we’re progressing.
Be careful not to confuse a metric with a KPI. Every KPI is a metric, but not every metric is a KPI. A KPI is a metric tied to a goal or an expected outcome. It’s something that helps us make decisions, not just gather information.
In short, a KPI is an indicator that shows whether we’re moving in the right direction toward a goal, whether we need to adjust our plans, and whether things are going as expected.
And you, if you could only keep one KPI, which one would you recommend?
Source: Key Performance Indicators – Establishing the Metrics that Guide Success