KPI – the fashionable acronym for Key Performance Indicator – measures how effectively a company is achieving key business objectives. You probably knew that, but do you know which KPIs to measure?
Too often, KPIs only measure results. To be effective they must also measure activities leading to the desired results. Why? We can’t control results; we only control our activities leading to the desired results.
In addition, KPIs must be aligned with your company’s priorities, which I call Purpose.
A company’s Purpose is comprised of its Premise (the market behavior the business serves) and Promise (company’s behavior serving that Premise). So, KPI measurements should include your activities, which lead to desired results fulfilling your company’s Promise.
In my branded merchandise business, we have Key Promise Indicators. We measure team member activities we believe lead to our company’s desired result: fulfilling our company Promise.
What KPIs do you measure? Are you measuring results or activities leading to results? Are the KPIs aligned with your Premise and Promise?