Overview
Key Performance Indicators (KPIs) are ongoing measures of performance that help teams and leaders monitor the health, stability, and effectiveness of their business.
They indicate whether core processes, services, and outcomes are operating as expected — and where attention or improvement may be needed.
KPIs differ from Key Results (KRs) in that they are not tied to a specific objective or time period.
Instead, KPIs are continuous measures that reflect how well your business is running day to day, week to week, or quarter to quarter. They provide the foundation for data-driven discussions about operational excellence and business sustainability.
Setting KPIs – Best Practices
KPIs are most valuable when they offer a clear, consistent view of business health. They should provide facts, not opinions — helping teams align on performance and respond early to change.
Numbers alone don’t tell the full story.
Each KPI should have a primary owner responsible for data accuracy and updates.
Co-owners may support data collection, validation, or interpretation, but the primary owner ensures consistency and follow-through.When setting up a KPI, decide whether it’s best measured as a Number or a Percentage:
Number: counts or totals (e.g., active users, tickets closed, revenue booked)
Percentage (%): ratios or rates (e.g., uptime %, satisfaction %, churn %)
Choose the unit that best represents performance over time and is easy to interpret.
Each KPI should have a clear “health rule” — what you expect the number to do over time:
Just tracking
Stay at or above / Stay at or below
Stay between
Less is better
More is better
These rules define what “healthy” looks like and determine how the KPI is displayed in dashboards and charts.
Update KPIs on a cadence that matches how quickly the data changes:
Daily: fast-moving operational metrics
Weekly (default): general business rhythm
Monthly/Quarterly: strategic indicators or stable processes
When updating, always include narrative context — explain trends, changes, or unexpected results.
Anatomy of a KPI
Each KPI includes key elements that define what’s being measured, how, and by whom:
Name / Description
Owner
Co-owners
Team
Measured as (Unit of Measure)
Monitored as (Monitoring Goal)
Visibility
Data provider
Cadence
These elements ensure each KPI is clear, accountable, and actionable — not just a number on a dashboard.
Choose what to measure
KPIs should reflect the vital signs of your business. When choosing what to measure, think about long-term performance and health, not just short-term output.
You can start by identifying the few metrics that truly define success in your area. A team or function may track several KPIs, but the most effective ones are:
Directly connected to core outcomes (e.g., revenue, quality, efficiency)
Stable enough to track over time
Easy to understand and explain to others
Questions to Ask When Defining KPIs
To define meaningful KPIs, start with the right questions:
What is the ongoing measure of success for this process or outcome?
What value, rate, or count would indicate that we’re healthy?
How often should we look at this to stay proactive?
Who is responsible for maintaining and communicating this metric?
Asking these questions helps shift focus from data collection to insight — making KPIs a tool for learning and leadership, not just reporting.
Learn how to create a KPI here.