Key Performance Indicators (KPIs)

What are Key Performance Indicators (KPIs)?

A KPI is a measurable value that shows how effectively a company achieves its objectives. Low-level KPIs track departmental processes like sales or HR, while high-level KPIs reflect overall business performance. Effective KPIs communicate clear, relevant, and actionable information rather than relying on generic industry metrics.

Creating KPIs in 5 Steps

1. Set a Specific Goal: Define a clear objective, e.g., “increase sales by 10% this year.”
2. Define Success Criteria: Determine feasibility, timelines, and evaluation methods.
3. Collect Data: Gather accurate, regularly updated data from systems or reports.
4. Build the KPI Formula: Combine data into a formula that measures the target outcome.
5. Visualize KPIs: Use charts, graphs, or dashboards to communicate performance clearly.