What is a KPI METRIC?

So, what is KPI? A Key Performance Indicator (or KPI) is a metric value that demonstrates how effectively a company is achieving its objectives. It also helps us identify the business management performance of each department based on specific business goals.

KPI metrics can be put into place to track the progress of a given business objective.

KPIs in business are traceable values that describe the performance of an objective in numeric values such as percentages. These values serve for the purpose of determining what actions the business should take if the goal is not being achieved.

How do you set KPIs? There are endless methodologies. The SMART goals approach has gained greater credibility and popularity for providing great results in recent years. KPIs should be:

S) Specific

M) Measurable

A) Achievable

R) Realistic

T) Time-bound

Related Article: 5 steps to set smart objectives

Something that most gurus agree on is that the first step towards success is a correct definition of objectives. The question that arises is: How to do it?


Once you have set your goals, SMART KPI’s are established using the following methodology:

1. KPIs must be specific: That is, as concrete as possible to identify what you want to achieve. Napoleon Hill says that one of the rules of success is the precise definition of objectives. For example: “I will fix my business” is not a specific objective. “I’m going to sell $ 5,000 this week,” it is. Since KPIs are a measurement parameter, it is important that they are expressed in quantifiable terms in order to measure progress.

2. KPIs must be measurable: In order to measure the success of an objective, you need to measure it. Set a measurable standard such as time, cost or quantity. This will make it possible to measure progress and take corrective actions if the objective is not being reached. The previous example of selling $ 5,000 a week is measurable KPI. It sets a numeric standard and lets you track sales.

“If we want to improve we need to measure,” Juan Ramón García

3. KPIs must be achievable: If your goals involve several people, you should talk to them. A team with synergy is better because reaching the collective goals is a challenge if there is no real commitment among all the goal may not be reached.

4. KPIs must be realistic: Your objectives must be within your own possibilities. Proposing something too far-fetched is opening the door for failure.

If you like running, “I will compete in the next Olympics games” may not be realistic for you, of course, it would not be for me, but perhaps the goal of participating in the next race in your city may be within your reach.

5. KPIs must be timely: SMART KPIs raised intelligently, require a time limit to be fulfilled. Restraining something in time creates a sense of urgency within which the objective must be met.

Setting a time limit is important with any projects, goals or objectives. If you do not have a time limit you can fall into relaxation and procrastination which can overextend completion time.

Now that you know what a KPI metric is, make sure that they comply with the SMART rule.