Choosing KPIs People Will Actually Act On

Three tests for any measure

1. Would a change in this number change what we do? If not, it is context, not a KPI.
2. Can someone specific influence it? An unowned measure is a topic of conversation rather than a lever.
3. Does it arrive in time to act? A monthly number about a weekly decision is history.

Applying those three usually reduces a list of twenty measures to five or six, which is the right number.

Lagging and leading

Revenue, profit and churn are lagging: they tell you what happened. Enquiry volume, response time, pipeline coverage and engagement are leading: they tell you what is about to happen.

Report both, and manage on the leading ones. By the time the lagging number moves, the decisions that caused it were made weeks or months ago.

A small set for a service business

• Qualified enquiries per week — leading, actionable, owned by marketing
• Response time to enquiry — the most controllable conversion variable
• Proposal-to-win rate — tells you whether you are pricing or qualifying wrongly
• Utilisation or capacity committed — leading indicator of revenue and of burnout
• Debtor days — the cash number that quietly ruins otherwise healthy businesses
• Repeat and referral share — the honest measure of whether clients are happy

Define them once, in writing

“Qualified enquiry” means something different to every person who uses the phrase. Write down the definition, including the edge cases, and put it next to the number.

Undefined measures produce meetings about whether the number is right rather than about what to do, which is the most common failure of business reporting.

Set a target and a threshold

A number without a target is trivia. Decide what good looks like and what level triggers action, before you start reporting, so the conversation is about response rather than about interpretation.

Review targets annually. A target set two years ago against a smaller business is either trivially met or demoralising.

Review on a rhythm

Weekly for leading indicators, monthly for lagging. Same format, same order, a decision recorded against each. Fifteen minutes, consistently, beats an elaborate quarterly review.

Frequently asked questions