The KPI Curse

KPIs have a way of turning many organizations on their heads. Sometimes this happens because there are too many KPIs and too much data being gathered but often times it is because KPIs are misunderstood.

KPI stands for Key Performance Indicator with the emphasis being on indicator though people often tend to put the emphasis on performance. Due to this, KPIs more often than not become very closely entangled with targets.

At Captain Dash when we consult with our clients over KPIs we advice them to narrow their KPIs down to metrics that are closely related to the global goals of the organization.

By this we mean that KPIs are not the goals themselves; instead they are indicators of said goals. For us, KPIs help us to measure certain data points that help us to determine the progress made towards achieving our goals and delivering on our key priorities. This thus implies that KPIs indicate whether we are on track or not. They exist to provide objective information, which helps us to strategize better.

If on the other hand when one uses KPIs as targets they end up as short-term numbers to be achieved by departments and just serve as a scorecard more than anything else.

There is of course a reason why KPIs and targets get mixed up together. Other than the fact that they are both metrics there is the fact that for KPIs to work they need targets or benchmarks. It is very easy to see these targets as the targets that the organization or departments need to achieve.

Do not let them confuse you, these benchmarks serve as a reference point to see if we are on track and how much adjustment is needed, if any, in our strategy.

If you use KPIs are the indicators they are meant to be and let them guide your strategy they end up as very powerful tools to guide improvements across the organization.

On the other hand, an indicator that you could implement to measure progress could be the Key Transformation Indicator or KTIs.

Written By: Meghna Verma