Key Performance Indicators - quantifiable metrics that measure how effectively an organization or individual is achieving critical business objectives. They provide a focused set of measures that track progress toward strategic goals and enable data-driven decision making.
Acronym for 'Key Performance Indicators,' with 'key' from Old English 'cæg,' 'performance' from Old French 'parfournir' (to accomplish), and 'indicator' from Latin 'indicare' (to point out). The business concept formalized in the 1990s as companies sought better ways to measure and manage organizational performance.
The curse of KPIs is that people game them instead of improving the underlying business! The best KPI systems use leading indicators that predict future success, not just lagging indicators that report what already happened. Smart companies also rotate their KPIs periodically to prevent optimization tunnel vision.
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