Key Performance Indicators (KPIs) are quantifiable goals intended to measure the scope or potential of a company's success or attainable business objectives. These performance measurements can help indicate which components of your business are the most beneficial to its progress, which ones can help optimize its performance, or which areas of your company may need work.
There are a variety of KPIs that can help measure the performance or progress of your business. Some types of KPIs include:
Quantitative indicators: Quantitative indicators are represented by continuous or discrete numbers, which can be ratios, percentages, or whole numbers that represent values like rating scales, dollars, or weight. These indicators are the most straightforward quantifiable measures of performance, as they present direct numerical values.
Qualitative indicators: These indicators are not expressed numerically but through feelings or opinions. An employee satisfaction survey can be an example of qualitative data where performance is based on feedback.
Leading indicators: Leading indicators are variables that can help identify long-term trends and possibly predict successful future outcomes of your business processes.
Lagging indicators: Lagging KPIs compare a business' current performance in a particular field with their past performance in the same field.
Input indicators: Input indicators are a type of KPI that track the resources necessary to produce the intended outcome, such as funding or extra staff. Input indicators can help companies keep track of how efficiently they are using their resources.
Output indicators: Output indicators measure the success or failure of your business activities, like the number of goods or services created through a particular process. Revenue growth and new customer acquisition also indicate how well your business is performing.
Process indicators: Process indicators represent the efficiency of a business's process and how effectively it is functioning.
Practical indicators: Practical indicators explore the function of an existing process at a company, usually involving observation or feedback on that process.
Directional indicators: Directional indicators help determine the company's success in comparison with competitors, while practical indicators are specific to the company's process within itself.
Actionable indicators: Actionable KPIs measure a company's ability to enact change whether through political action or a shift in company culture.
Financial indicators: Financial indicators are a marker of a business's monetary growth and stability. When paired with other KPIs, this indicator can help paint a more complete picture of your company's financial viability.
Outcome indicators: These indicators are a marker of whether the program is meeting its goals via the short or long term.