Is it a Key Performance Indicator?

Last updated 7 years ago

First published 05 March, 2017

A key problem that a number of people encounter is to determine whether a measurement should be used as a Key Performance Indicator (KPI). For a KPI to be effective it must be a good measure of the current or future status of the thing to be measured.

As the adage goes, if you can't measure it, you can't manage it. The problem is that if you measure the wrong thing you may end up with less than desirable results.

This decision tree is a small aid to assist you in clarifying your thinking about whether something is really a KPI or yet another measurement. Remember not everything can be a KPI and you really should choose the best measurement to track the performance of the thing that you are trying to monitor or improve.

Performance Indicator,Measurement,Analytics

English Rating: ALL ages Shortest path: 5 nodes Longest path: 9 nodes Possible solutions: 9

Rod Jacka

Can you measure this KPI as a single number? Yes. No.
Can you directly align any change in this number to the performance of the thing to be measured? Yes. No.
Does the person or team responsible for this have the ability to take action to influence this number? Yes. No.
Yes it is a KPI.
Does the person or team have the ability to influence someone who does? Yes. No.
It may be a KPI but further thought and clarification is required..
It is not a KPI.
Can you indirectly align any change in this number to the thing that is to be measured? Yes. No.
It is not a KPI.
Are there other measures that could replace this measure? Yes. No.
It is not a KPI. You should use the alternative measurement..
It may be a KPI. Further thought and clarification is required..
Can you measure this with more than one number? Yes. No.
It is not a KPI.
Can you break this KPI into smaller performance indicators? Yes. No.
Consider using a combination of these measures to create a KPI based on them..
It is a KPI but not the best one..