Introduction
Key Performance Indicators (often abbreviated to “KPIs”), are metrics used to track progress as opposed to Objective and Key Results (“OKRs”) which are used to measure whether or not you’re on track for a particular objective.
How do I define KPIs?
KPIs are indications of how your teams are performing against their OKRs. They are effectively signals you regularly review to gauge if your teams are on track to meet their goals or if there’s a need to reassess said goals and/or pursue a new strategy.
As OKRs are more of a big picture metric, KPIs filter down into how specific teams (or individuals) contribute to the your objectives. In general, you’ll want your KPIs to have:
- A measure — what are you measuring?
- A target — what are you measuring towards?
- A data source — where do you measure from?
- A frequency to check — how often do you measure?
- An owner — who is responsible for the measure?
Examples of KPIs are:
- Sales teams
- Number of qualified leads
- Number of converted leads
- Net revenue
- Marketing teams
- Monthly website traffic
- Call-to-action conversion rates
- Market engagement rates
- Product development teams
- Story points achieved within sprint
- Bug/defect introduction rate
- Development cycle time
Conclusion
KPIs are a necessary tool to keep you and your teams on track towards your company’s objectives. As long as they are specific and reliable, you will have the means to identify threats to your product and its vision early enough to be able to plan and mitigate them, thus maximizing the opportunity you have to adjust your strategy or even renegotiate your objectives (which you should be prepared for the longer your objectives’ time frame is) as needed.