Do you know what a key performance indicator (KPI), a key performance measure (KPM), or a key performance factor (KPF) is? The short answer is they are all acronyms for the same thing – a performance metric.
The rest of the answer lies in the word “key”. Regarding performance measures, key means most important or most relevant. Why make the distinction? Isn’t everything we are tracking in our organization important?
Well….. it depends. Sometimes a metric is tracked because it’s easy or fun to measure. That doesn’t mean it’s not a valuable metric, but it may not be a key metric.
So what makes a metric so important or relevant that it becomes key, that it becomes vital for your organization to monitor? It tracks something valued by your client so much that they will either compensate or penalize you for it, or it tracks one of your organization’s goals.
Just because something is easy to measure and track doesn’t mean you should monitor it. You may find yourself tracking so many things that you suffer analysis paralysis when it’s time to evaluate your company’s performance and make decisions. You may instead discover you tracked items that aren’t important to your customers.
If you are self employed or a small business owner and need assistance with developing KPIs (KPMs, KPFs), contact me and I will help you develop metrics that will foster success! You may contact me here.