Is a Metric Really a Key Performance Indicator?
To measure the success of business goals, metrics are often used because they are easily measurable. These metrics can indicate which programs or areas of a business are finding success and which ones need some tinkering, change, or to just be abandoned altogether. One of the common issues that people face with metrics is the determination as to whether or not a specific metric should also be a key performance indicator, or a KPI.
How can you distinguish one from the other? How do you know if they should be combined?
A KPI Always Fits In With an Agency’s Mission
Each KPI will look different from other KPIs. A KPI is always a metric, but a metric is not always a KPI. One of the key differences between a metric and a metric that is also a KPI is that it fits in with the agency’s overall mission. Many metrics are designed to specifically measure the success or failure of a specific program, opportunity, or component of the job at hand.
A metric that is also a KPI will measure the success or failure of the agency’s overall mission in some way. It could be a metric that looks at the impact of the mission statement on a community or it could be the measurement of key funding measures.
A KPI Provides Measurable Context
Metrics may provide context in a specific area, but a KPI measures an achievable context based on many other metrics. For example:
• You may have several metrics that measure your blogging performance. From posts per day to length of post to the amount of links included, each measurement you use is a metric.
• Each metric lends to another metric, which is the amount of people who are subscribing to your blog’s RSS feed.
• That metric, which measures success or failure of RSS subscriptions, would be a KPI. The other metrics would contribute to that KPI.
It is important to remember that a KPI is set by the executive management of a corporation and not by individual employees or lower level managers. That doesn’t mean, however, that each tier of employee won’t set individual metrics.
It Is Important To Remember That Metrics and a KPI Are Not Interchangeable
Just because there is a metric that is being used doesn’t mean that it is a KPI. Not every metric is a KPI, which means these two terms are not interchangeable. A non-beneficial KPI can truly damage a company, whereas a non-beneficial measurement might also create damage, but on a much lower scale since it only affects one component of the overall agency.
By remembering these important distinctions, you’ll be able to recognize what metrics you’re assigned to meet and what your overall KPIs you’ll want to hit as well. This will help you and your business find greater overall success!