What is a Key Performance Indicator (KPI)? Spoiler alert: it needs a new name

Fawn
3 min readMay 15, 2020

I began writing a book on Key Performance Indicators (KPIs) as the acronym has become commonly-used but often misinterpreted. I began using an alternative description: Data-based Performance Mapping for my own endeavors (I know, typical Millenial, trying to be unique *yawn*). I mapped out all the important elements to consider and some high-level tools and models that can be used to develop robust and impactful indicators for individuals and organizations. I plan to release the book in Q4 2020.. but first I need to establish indicators for successful milestones along the way.

Obviously there is reason and logic to the highly adopted KPI acronym which I am not disputing has value. What I am suggesting is that we — as humans, with our quirks and deficits — need more specific, unambiguous definition and instruction. This is in all areas of our lives. I previously wrote about diminishing creativity in society as a result of our digitization and instant gratification. Although this is an unpalatable truth for many, it is the elephant in the room and cannot be ignored.

This is the basis for my argument that Key Performance Indicator is not indicative of much. Imagine asking a child what they think a KPI is. You might get responses like:

“It is an indicator of key performance”

“A key that indicates performance”

Much less likely that you will get a response like:

“It is the identification of actions and outcomes that are directly correlated to successful accomplishment of a pre-determined goal.”

We have all surely heard the adage that to truly understand something, you should be able to teach it to someone else and/or to explain things to others as if they are complete novices and have no prior knowledge of what you’re explaining. For this reason, I define KPIs as “Data-based Performance Mapping”.

Let’s imagine asking the child what they think this is now:

“It is a map of data for performance”

“It is data that maps performance”

Something along these lines. Although not eloquent and probably not a thoroughly understood, there is some more clarity about this description than that of a KPI. We are given a visualization in the form of a map — suggesting a journey and plotting points along the journey. We are also informed that data will be used as the basis for our map — suggesting we must collect something. Finally, as with a KPI, we are focused on performance. This is vague but applicable to any scenario in any industry where you can impact the outcome.

The 16 items I walk through in my book are all coordinates on your performance map. Similar to Google Maps, they are connected by instructions and actions which get you from Point A to B to C and onward in your journey to achieving an outcome.

In summary, next time you’re asked to establish KPIs, consider plotting your overall journey from beginning to end and identifying which pieces of relevant data that you can collect will shift you from one point to the next on your way to achieving success.

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