Anything that can be measured is a metric. KPI’s or Key performance indicators, are a subset of metrics and are, as the name suggests, key indicators of performance.KPI's should be religiously and objectively tracked. One should put a quarterly, yearly and multi-year target on the KPIs.
Each department or sub-departments can have their own KPI’s. However, at the executive level there should be a maximum of 5 KPI’s. Departmental KPI’s should be understood in the context of the executive KPIs. Executive KPI’s should be tightly aligned with company’s goals and strategy.
KPI’s should be easily understood across the company so everyone is aware of the progress and the effort needed to get to the promised land and beyond. KPIs should be used in the forecast process so we can keep a close tab. KPI’s can also be used a compensation tool so the incentives are properly aligned.