KPI
/ˌkeɪ piː ˈaɪ/
Definition
A key metric tracked to measure progress toward a goal — like revenue, signups, or return-visit rate — that turns a team's or organization's performance into a number.
Examples
- • Our KPI for this quarter is 10,000 new signups.
- • We check the KPI dashboard first in every meeting before setting priorities.
Origin
A concept from the performance management field of business administration, developed alongside theories like Management by Objectives (MBO) and the Balanced Scorecard (BSC) into standard business practice.
Description
A KPI turns "are we hitting this goal?" into a number you can check. A vague goal like "grow more" gives you no way to judge progress — a KPI converts it into something measurable.
How to use it
- Separate lagging indicators (results) from leading indicators. Revenue is a lagging indicator that shows up late; leading indicators like new signups or active users move earlier, giving you time to course-correct.
- Don't track too many. A team can usually only stay focused on 2–5 key metrics at once.
- Attach a timeframe and a target number. "Grow signups" isn't measurable; "10,000 new signups by end of quarter" is.
- Review it on a regular dashboard (weekly or monthly), and build a habit of digging into the cause whenever you're off target.
TECHNeutralmanagementperformance managementmetrics