Key performance indicator

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A Key Performance Indicator (sometimes shortened to performance indicator or simply KPI, or also sometimes called Key Success Indicator[1]) is a sort of benchmark or checkpoint used by businesses to determine whether they are succeeding or not. While a business may (and probably should) have wide, open-ended goals, these are specific, measurable goals.[1][2]

Examples of Good and Bad KPIs

  • "Get out of debt within three years" - Probably reasonable, depending on income, overhead, and debt.
  • "Get out of debt within forty years" - Probably not acceptable, depending on the budget. KPIs should not generally be so long-term, nor should they require minimal effort.
  • "Become popular" - Invalid, because how is popularity determined?
  • "Gain ten thousand customers in the first month" - Probably unreasonable, since KPIs should be achievable but not unreasonable.
  • "Achieve one thousand Facebook likes in the first three months" - Reasonable, and implies some popularity though does not is not a certain conclusion.

References

  1. ↑ 1.0 1.1 http://management.about.com/cs/generalmanagement/a/keyperfindic.htm
  2. ↑ http://www.wisegeek.org/what-are-kpis.htm
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