Explore 30 KPI examples to enhance your business performance. Learn how to select, track, and align KPIs with strategic goals for optimal results!
If you manage a team, there’s a good chance you’ve heard of key performance indicators (KPIs). In its simplest form, a KPI is a type of performance measurement that helps you understand how your organization or department is performing. Used correctly, a good KPI should act as a compass that shows whether you’re taking the right path toward your strategic goals.
The trouble is, there are thousands of KPIs to choose from. If you choose the wrong one, then you are measuring something that doesn’t align with your goals. How, then, should you go about selecting the right KPIs for your organization?
If you’ve found yourself asking that very same question, you’re not alone. It’s not unusual for companies to stray off course as a result of using the wrong measures. But the sooner you uncover your mistakes, the better—and you can always get back on track by revisiting your KPIs.
We’ve packed a lot of key performance indicator (KPI) insights into this article:
What is a Key Performance Indicator (KPI)?
Why Is It So Critical to Select The Right KPIs?
KPI Selection Mistakes You Should Watch Out For
How Can You Create a Culture of KPI Monitoring and Improvement?
How to Choose & Track KPIs: A Step-by-Step Guide
30 Key Performance Indicators Examples & Definitions
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One of the questions we're asked regularly is, "What is a KPI?" We've found that the clearest way to explain the concept is to break it down into three levels:
In our experience, the most effective leadership teams track fewer than 25 measures that cut across the organization’s four perspectives: financial, customer, process, and people.
Simply put, KPIs drive organizational performance.
You’ve likely heard it said that “what gets measured gets managed”—we’ve found this to be true. If you’re focused on your KPIs, your staff will be focused on changing the appropriate behaviors. On the opposite side of the coin, if you choose the wrong KPIs, you run the risk of driving unintended behaviors.
Let’s say you manage a casual food business. One of your goals is to conserve food—so you choose a KPI related to serving smaller portions. An unintended consequence of this action could be angry customers who would rather dine elsewhere. Even though you’ve technically met your goal, the result shows you went after the wrong KPI. A better thing to measure may be how optimal is your fresh food ordering process so you have to throw less away (with the KPI being “amount of food waste”).
There are two rules for selecting the right KPIs (key performance indicators):
There are two common missteps made during the selection process:
Measuring the KPIs (key performance indicators) you’ve always measured may not take into account any changes in your customer’s behavior that could help your company grow. For example, let’s go back to our fast casual restaurant example.
If you’re only measuring the speed at which you can bring people through the ordering line simply because that’s what you’ve always measured, you may be missing an opportunity for growth that could be brought about by doing something new, like integrating an online ordering system.
Basing your choice on simplicity rather than strategy won’t, in most cases, help you accomplish anything. Assess every KPI based on its relationship to your overall goals.
For example, are you measuring the number of customers you get each day because that KPI will help you achieve a strategic goal, or simply because it’s easy to track?
Introducing KPIs (key performance indicators) into your work environment has the potential to create some challenges. For one thing, not everyone may fully understand them and how they are used. Put together some educational sessions to explain the concept and why KPIs are going to be important for your organization moving forward.
Also, emphasize that KPIs will not be used as enforcement tools to control people’s behavior. For instance, when a customer service rep sees, for instance, a KPI metric related to average handle time, they might automatically assume that hitting the target rests on their shoulders alone—and that there will be negative consequences if they don’t meet it. If you don’t correct that impression, you’ll unwittingly encourage other behaviors that will invariably work against you.
There’s a huge difference between selecting the right key performance indicators (KPIs) and creating a culture of monitoring, reporting, and improvement. To help people embrace the use of KPIs and motivate them to change, you’ll need to set up a performance management system that is consistent, transparent, and simple to use.
You may be interested in: What Is A KPI Report, & How Do I Create One?
It is frequently said that “What gets measured gets done,” but how does the measuring itself get done? Below are the important steps to consider in effectively tracking KPIs as a part of your performance management framework.
While your organization has many moving parts that are integral to its operations and performance, it is not possible, or efficient, to track everything going on internally. For one thing, not all measures are important enough to track. For another, tracking too many measures creates unnecessary work that ultimately won’t be useful.
Instead, choose one or two metrics for each of your objectives that will be most helpful in achieving them. Multiple metrics could apply, but only a couple of them will be impactful enough to improve performance.
For instance, say your organization has an objective to improve your employee training and development programs. You could measure the percentage of trained employees or training time, but neither of these correlate well with the real result you’re looking for: developing peoples’ skills to handle more advanced roles. A better measure might be a reduction in errors as a result of the training, for instance.
Every KPI should help measure a clearly-defined goal you're trying to achieve. But some of your measures will be lagging indicators (i.e. outcome KPIs), and some will be leading indicators (i.e. driver KPIs). Here's how you differentiate between the two:
In addition to making sure your chosen KPIs are true indicators of performance, they should also have some additional characteristics that will signal their effectiveness. Ask these questions about each KPI you’re considering:
If you answer “no” to many of these questions, it may be a sign that the KPI either needs to be altered or replaced altogether.
KPIs are an important tool in measuring progress, but they are more likely to be acted upon if someone is held responsible for tracking and reporting on them.
An added benefit: The responsible party is also usually more inclined to want the measure to succeed, rather than accept underperformance. Even if the person is only responsible for reporting on their KPI, you can bet they’d rather report good news than bad news—which motivates them even more.
You may have an analyst responsible for collecting the data. This is important, but maybe more important is having a business leader who is responsible for “reporting” on the measures. The business leader should be able to analyze the results, put the data in context, and explain whether performance is good or bad and why. The individual who is responsible for the measure will be able to influence the resources dedicated to improving the measure.
Finally, it’s necessary to continually review your KPIs and their performance on a monthly, quarterly, or other predefined reporting frequency. Regular monitoring makes it easy to see the time frame in which something may have underperformed or overperformed, as well as what may have happened within this period to cause the change.
To ensure the whole team is on the same page—and because many measures and goals are interconnected—it’s crucial to report these findings to all relevant parties. Many organizations try to use spreadsheets to track KPIs, a method that often comes with issues like version control conflicts and calculation errors. A better (and simpler) alternative is to use performance management software, like ClearPoint Strategy, to create customizable KPI dashboards to report to different audiences. You can make one dashboard for departments working on KPIs, and another that gives a high-level overview to executive teams.
Another benefit of using ClearPoint Strategy is its ability to link your KPIs to your organizational objectives. For companies that are serious about strategy execution, the ability to link KPIs to objectives is significant because:
None of this is to say you can’t use spreadsheets to view your KPI data, but with ClearPoint, you save time and improve the information available for decision-making.
We've broken down our list of KPIs into the four categories of the Balanced Scorecard: Financial, Customer, Process and People. Make sure you select a few from each category so that your strategy is well-balanced across the organization.
Note that the right KPIs for you might not be the right KPIs for another organization. Make sure you’ve researched as many key performance indicators as you can to determine which ones are appropriate for your industry. From there, determine which KPI targets will help you further understand and meet your goals, and then integrate them throughout your department. KPIs should match your strategy, not just your industry.
Ready to take your organization's performance to the next level? ClearPoint Strategy is your partner in not just tracking, but truly achieving your strategic goals. Our intuitive strategy planning, management, and execution platform transforms the way you manage and monitor Key Performance Indicators (KPIs), ensuring that every metric you track is aligned with your strategic objectives. Don't let complexity hold you back.
Book your free demo today and see how ClearPoint Strategy can empower your team to make data-driven decisions, foster a culture of continuous improvement, and drive your organization towards its strategic goals with clarity and confidence.
Key performance indicators are measures used to evaluate the success of an organization. KPIs can be quantitative and qualitative in nature. Quantitative KPIs include metrics such as sales revenue per employee, number of customers served by each call center agent, or revenue. Qualitative KPIs, on the other hand, may include customer satisfaction scores, quality rantings, or product reliability rates.
Organizations often use SMART criteria to create a good KPI. A SMART KPI is: Specific, Measurable, attainable, Relevant, and Time-bound. To know if your KPI is SMART, ask yourself the following 3 questions.
KPIs are important because if you don't know how you're progressing in certain areas, you don't actually know where you're going as an organization. You won't have insights into if you're making progress towards your strategic goals, or if you're headed in a direction you want. KPIs act as a 'pulse check' of your strategic plan.
What you include in your report depends heavily on your audience. There are, however, a few pieces of information every KPI report should include. It's important to show the linking goals of your KPIs, the KPI measures data and calculations, and visuals showcasing the data in an easy-to-digest format.
It's easy to convince yourself that you need to measure everything for your organization. Remember, though, that KPIs mean key performance indicators. You want to only measure the most important and influential metrics. To best identify the right KPIs, tie your measures back to your strategy goals. Make sure they relate to what you hope to achieve in your organization.
Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.