KPI Conundrum


KPIs: Key Performance Indicators

The term sounds pretty straight forward and self-explanatory, at least to those of us who have been embedded in them for our careers, but still not everyone understands what they are. There’s often some discrepancy in understanding what they represent.

KPIs are not goals. They are not sales, revenue, or net profit. KPIs are also not answers in and of themselves. They are exactly what they say they are, indicators. And no one KPI trumps another. They need to be viewed together, to help understand a larger picture, to make assessments.

Tools will report on them, but they will not analyze them. You still need skill, experience, insight and objectives to understand what they mean and interpret them.

To help explain it better, to illustrate how they are NOT answers in and of themselves, lets take a look at KPIs under a different scenario.

KPIs in Real Life

We’ve all visited a doctor. Whether you’re seeing one in an ER, wellness check up, or specialty visit, each visit includes checking blood pressure, temperature, weight, height, heart rate, blood work, listening to your heart and lungs, and more.

Those are KPIs. But they don’t end there. The health professionals then ask questions, they get insights into what’s going on. They need to compare the KPIs over time (medical history).

Now, there are some that given outcomes, can represent immediate issues (heart rate missing, blood pressure way too high or too low) that require immediate attention, but even then they don’t answer the question.

KPIs are the “what’s” of the business, organization, initiative, health. They are not the “why’s”. A person can show up with low blood pressure but not be sick or in need of immediate medical attention. The KPIs simply are dials to show how representative systems are performing up to expectations (benchmarks) and offer a guide on where to dive deeper to get more information.

In the case of the medical setting, where to order more tests, what questions to ask, and what other systems may need to be reviewed.

KPIs are Datapoints

That’s it. It is important to remember that data is just a reflection of what has already occurred. KPIs show summary points that your organization has identified as indicators of performance, not indicators of success.

You still have to put them together to understand the picture of what it means, to make a diagnosis, and not a snap judgement. Otherwise you might end up doing emergency surgery to take out a gallbladder because you saw gallstones, when it was the appendix that was causing the problem all along.