The Great KPI Misunderstanding

This chapter explores how the four types of performance measures differ with examples of each type. These four measures are in two groups: result indicators and performance indicators. Key result indicators (KRIs) give the board an overall summary of how the organization is performing. Result indicators (RIs) tell management how teams are combining to produce results. Performance indicators (PIs) tell management what teams are delivering. Key performance indicators (KPIs) are those indicators that focus on the aspects of organizational performance that are the most critical for the current and future success of the organization. Many management books that cover KPIs talk about lead and lag indicators; this merely clouds the KPIs debate. The RIs and PIs will be reported in various time frames from daily, weekly, and fortnightly to monthly. The KRIs, which are best used to report performance to the board, will, therefore, be based around the timing of the board meeting.