The difference between Metrics, KPIs & Key Results
Metrics, Key Results and KPIs are indispensable tools for result-driven organisations. They have similar characteristics, but aren't all the same and shouldn't be confused. Find out the differences. Also check out the following blog posts: https://www.perdoo.com/blog/the-difference-between-metrics-kpis-key-results/ The anatomy of a KPI: https://www.perdoo.com/blog/the-anatomy-of-a-kpi/ The anatomy of a Key Result: https://www.perdoo.com/blog/what-is-a-key-result/ Create your own FREE Perdoo account Track your OKRs and KPIs for free. Create your own FREE Perdoo account here: https://www.perdoo.com/#get-started Subscribe to Perdoo's YouTube channel SUBSCRIBE for all our latest videos on OKR, KPI and strategy execution best practices and a lot more: https://www.youtube.com/perdoohq?sub_... Learn everything about getting started with Objectives and Key Results: OKR Crash Course (video): https://www.youtube.com/watch?v=EIcpF... The ultimate guide to OKR (eBook): https://www.perdoo.com/resources/eboo... How to write great OKRs (eBook): https://www.perdoo.com/resources/eboo... Goal Diggers podcast on everything OKR, KPIs and strategy We just launched a podcast! Tune in to listen to all our episodes on the app of your choice: https://goal-diggers-by-perdoo.captiv... About Perdoo Perdoo is a goal management platform that helps organizations bridge the strategy-execution gap by bringing their strategy, people and goals (namely OKRs & KPIs) onto a single platform. By doing so Perdoo doesn’t only help organizations achieve results that truly matter to them, it also helps improve transparency, alignment and overall focus. To learn more about us, head over to www.perdoo.com Perdoo Resources Hub You'll find our latest insights and resources (including an online introduction to OKR, an eBook How to write great OKRs and guides full of example goals) on our resources page: https://www.perdoo.com/resources/ Get a free demo Talk to us! Learn how Perdoo can help your organization execute its strategy and achieve its goals. Book a demo: https://www.perdoo.com/get-a-demo/ Stay up-to-date with us on social media We’d love to connect with you. Follow us on: LinkedIn: https://www.linkedin.com/company/perdoo/ Twitter: https://twitter.com/PerdooHQ Facebook: https://www.facebook.com/perdoohq
The difference between Metrics, KPIs & Key Results
Understanding Metrics, KPIs, and Key Results
What are Metrics?
- The speaker expresses frustration over the interchangeable use of terms metrics, KPIs, and key results, aiming to clarify their meanings.
- A metric is defined as a "system or standard of measurement," specifically in business as "a set of figures or statistics that measure results."
- Examples of metrics include Customer Renewal Rate, Customer Churn Rate, Monthly Active Users, EBIT, Cashflow, and Burn Rate.
- Current value is crucial for metrics; it can be calculated differently across organizations (e.g., different methods for calculating Customer Renewal Rate).
- Clarity in calculation methods is essential for understanding metrics used in both KPIs and Key Results.
Exploring Key Performance Indicators (KPIs)
- KPI stands for Key Performance Indicator; it defines key areas of business performance using a metric and a target value.
- A KPI consists of four elements: metric, current value, target value, and title. The title should reflect the metric and its target.
- Storing the formula for current values within the KPI description field is recommended for clarity.
- KPIs represent critical business areas that require ongoing monitoring; they become part of regular business operations.
Understanding Key Results
- Key Results are linked to Objectives; they clarify what success looks like and help measure progress towards those objectives.
- Each Objective typically has two to three Key Results designed to positively impact specific metrics.
- A Key Result includes components such as metric, current value, start value (initial state), target value (desired end state), and title.
- An effective title summarizes all components clearly (e.g., "Increase NPS from 20 to 40").
Distinguishing Between KPIs and Key Results
- While both KPIs and Key Results may use similar metrics, they serve different purposes; it's important not to confuse them.