What is a KPI?
A KPI — or Key Performance Indicator — is a specific, quantifiable metric that an organisation or team uses to evaluate its progress toward its most important goals. KPIs translate strategic and operational objectives into measurable numbers, making it possible to track performance objectively and identify where improvement is needed.
The word "key" is important. Not every metric is a KPI. A KPI is a metric that directly reflects performance against a critical objective. An organisation might track hundreds of metrics, but typically only five to ten of these will be genuine KPIs — the ones that most directly indicate whether the business is succeeding.
What makes a good KPI?
A good KPI is directly tied to a strategic or operational objective, is measurable with available data, is actionable (the team can influence the number through their work), is reviewed regularly, and has a clear target or benchmark against which performance is assessed.
KPIs should also be clearly owned — someone should be accountable for each KPI. Without clear ownership, KPIs become reporting artefacts rather than management tools.
Types of KPIs
KPIs can be classified as leading or lagging. Lagging KPIs measure outcomes that have already occurred — revenue, profit, churn rate. They are accurate but tell you what has happened, not what will happen. Leading KPIs measure activities or conditions that predict future outcomes — pipeline value, customer satisfaction score, employee engagement. They are less precise but more useful for early intervention.
The most effective KPI frameworks include both types, using leading indicators to predict and prevent future problems and lagging indicators to confirm whether strategy is working.
Common KPI examples by function
Sales KPIs commonly include: monthly recurring revenue, average deal size, conversion rate, sales cycle length, and customer acquisition cost. Marketing KPIs include: website traffic, lead generation volume, cost per lead, and content engagement rates. Operations KPIs include: on-time delivery rate, defect rate, and customer support response time.
At the strategic level, KPIs might include market share, net promoter score, employee retention rate, and gross margin.
How Empiraa manages KPIs
Empiraa makes KPIs a central and visible part of how the organisation is managed. KPIs can be set, tracked, reviewed, and discussed within the platform, connected directly to the strategic objectives they are designed to measure.
For advisors using Empiraa GPS, helping clients select and monitor the right KPIs is one of the most practical and visible ways to add ongoing strategic value.