Key Performance Indicators are about running your current business. KPIs are the the day-to-day pulse that will ultimately bring your long-term vision to life.
They're leading indicators. They let you know, in real-time, that each person on your team is executing on what's important now.
But beware. It's all to easy to confuse a lagging indicator with a KPI. For example, we might call "revenue" the very most "key" of all "performance indicators."
But revenue has to be booked and amortized before it can be correctly measured. And no single person can control it.
A well-designed KPI measures something that one person can control completely right now.
Everyone at a company has something in their job that contributes to the company's success.
The art of creating effective KPIs is to locate and define that one thing. Sometimes that's easy. Sometimes it requires some original thinking.
But it's always worth the effort, because they can effect everyone.
Employees have a better understanding of their ultimate objectives, and so they are empowered to succeed.
Managers are freed from making subjective judgments about performance and can focus on coaching to excellence.
And executives or investors can receive incredible insights into operations.
KPIs are integral to the type of employee engagement and corporate culture that today's best managers wish to create.
KPIs measure something critically important to management and to the employee responsible for it.
The person responsible must be able to make the KPI move.
KPIs are part of a cultural revolution that can improve employee engagement.
Lynch, Stephen (2013-04-15). Business Execution for RESULTS: A Practical Guide for Leaders of Small to Mid-Sized Firms (Kindle Locations 3367-3368). STEBIAN.com.