How to choose KPIs that matter
A KPI (Key Performance Indicator) is a number that tells you whether you are winning. The trap most teams fall into is tracking what is easy to measure instead of what actually drives the outcome. Good KPIs share four traits:
- Measurable — there is a clear formula to calculate it.
- Outcome-based — it reflects a result, not just activity.
- Reviewed on a cadence — weekly, monthly, or quarterly.
- Owned — someone is accountable for moving it.
Frequently asked questions
- What is a KPI?
- A KPI (Key Performance Indicator) is a measurable value that shows how well a team or company is progressing toward a specific goal. Unlike a task, a KPI is a number you track over time — like conversion rate, churn, or revenue per employee.
- How many KPIs should a team track?
- Most teams track 4–6 KPIs at once. Fewer and you miss important signals; more and no one can tell which numbers actually matter. This tool returns 5–6 by design.
- What makes a good KPI?
- A good KPI is measurable, tied to a real outcome (not just activity), reviewed on a regular cadence, and owned by someone. If you cannot calculate it or no one acts on it, it is not a KPI worth keeping.
- What is the difference between a KPI and an OKR?
- A KPI is an ongoing health metric you monitor continuously. An OKR (Objective and Key Result) is a time-boxed goal you are trying to move. KPIs tell you how the engine is running; OKRs tell you where you are steering it.