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How to design key performance indicators

Key Performance Indicators (KPIs) help organisations understand how well they are performing in relation to their strategic goals and objectives.

In the broadest sense, a KPI provides the most important performance information that enables organisations or their stakeholders to understand whether the organisation is on track or not. KPIs serve to reduce the complex nature of organisational performance to a small number of key indicators in order to make it more digestible for us.

This is the same approach we use in our daily lives. For example, when you go to your doctor he might measure blood pressure, cholesterol levels, heart rate and your body mass index as key indicators of your health. With KPIs we are trying to do the same in our organisations.