What are KPI's?

Key Performance Indicators (KPI's) are metrics that help you track

how well you or your business is doing in achieving its goals.

They are like scorecards that allow you to

measure and monitor progress towards specific objectives.

By regularly monitoring and analyzing your KPIs,

You can identify areas where you need to improve

and make informed decisions to drive success.

KPIs are important because they provide clarity, focus, and a way to measure improvement.

✳️Clarity

KPIs help to clearly define the goals and objectives of an individual or organization.

By setting specific KPIs, you know exactly what you want to achieve and how you will measure success.

✳️Focus

KPIs allow you to focus on what's most important.

By tracking and analyzing KPIs, you can identify areas where you need to improve and prioritize your
efforts accordingly. This helps you to stay focused on what really matters and avoid distractions.
✳️Improvement:

KPIs provide a way to measure progress and identify opportunities for improvement.

Monitoring and analyzing KPIs regularly helps you track performance over time and identify areas for
improvement to reach your goals.

This helps you to continuously improve and optimize your performance.

KPIs should be clearly defined, relevant, and balanced.

📌 Clear Definition:

Each KPI should have a specific, measurable, achievable, relevant, and time-bound (SMART) target.

It should also be easily understood by everyone involved in the process. For example, a sales team may
define a KPI as the number of closed deals per month, with a target of 20 deals per salesperson.

📌 Relevance:

KPIs should be relevant to the goals and objectives of the company or individual.

They should be aligned with the broader strategy and reflect the organization's priorities.

A marketing team might set website traffic as a KPI, however, for a company focused on lead
generation, a better KPI would be the number of leads generated from website traffic.

📌Balance:
KPIs should also be balanced, which means that they should be a mix of leading and lagging indicators.

Leading indicators are forward-looking, predictive measures that help anticipate future results. Lagging
indicators, on the other hand, are retrospective, historical measures that show how well the company or
individual has performed in the past.

Both are essential for evaluating performance effectively.

For example: A manufacturing plant may rely on production efficiency as a leading KPI to forecast future
output, and defect rates as a lagging KPI to evaluate output quality.

Credits: The KPI Institute