KPI (Key Performance Indicator)

A KPI is a measurable value that indicates how well an organization, team, or process is performing against a strategic objective. KPIs provide focus by turning abstract goals into concrete, quantifiable metrics that are tracked regularly. Good KPIs are relevant to strategy, measurable, have a clear owner and timeframe, and provide actionable insight for decision-making. There is often a distinction between lagging KPIs (outcomes) and leading KPIs (predictors), and KPIs should avoid being mere 'vanity metrics' that look good but do not drive action.

Example: a product team wants to improve retention for a mobile app. A relevant KPI could be: '30-day retention rate of 20% within 6 months.' This KPI specifies the metric (30-day retention), a concrete target (20%), a timeframe (6 months) and an owner (product manager). The team links the KPI to analytics data, defines the exact calculation (e.g. active users on day 30 divided by new installs), and schedules weekly dashboards and monthly reviews. They also track complementary KPIs like churn and engagement, and avoid relying on vague vanity metrics such as raw pageviews that don't reflect user success.