Failure to use Key Performance Indicators (KPIs) to confirm whether planned actions are happening or not in your business is like deciding to drive your business down a busy freeway through your rearview mirror. You show no care for the traffic in front by not using your windshield. You are only worried about what’s behind you. KPIs are like a traffic alert that gives you time to adjust your travel before you cause or get jammed up by an accident.
Key Performance Indicators (KPIs) measure the activities that are necessary to achieve your goals. Each leading metric is an input that describes how to achieve a goal. They are the quantification of critical success factors.
KPIs serve as indicators of the likely results of your actions. These metrics are outcome predictors that are harder to measure but are easier to influence and improve upon directly. They benefit business leaders as follows:
- Records the results of ACTION
- Shorter periods—measures hours, days, and weeks
- Shapes BEHAVIOR
Your KPIs are your leading metrics used to ensure that behaviors and actions are managed as they need to be. KPIs are even more effective when you combine them with lagging metrics called Key Results Indicators (KRIs) to manage your business to higher sales and profits.