Measure focused companies are very eager to find the “right” KPI. I doubt the existence of perfect KPIs. But in our endeavoring search for perfection, we have to make compromises. After all, you might actually find “gold” on “the golden happy mean”.

When I am working with measures/KPIs I have a list that I am using assessing the quality of a KPI.

Here is a checklist that you can use when selecting the right KPIs:

A KPI should be as follows:

1. Important - indicate a significant aspect of the organization's performance and what you want to improve
2. Actionable - indicate some practical and short-term action from managers when it wavers
3. Response time - quickly indicate whether such action had been successful
4. Availability - require little or no effort to collect (particularly the denominator)
5. Accepted – be considered relevant and important by consensus among those who work in an organization of that type
6. Consistency - be defined in exactly the same way by everyone who uses it
7. Within organizations “control span” - be influenced only by the behavior of the organization measured, not by anything else
8. Clear Definitions - be unambiguous in the way it is reported (ie clear on matters such as scale, timeframe, equalization, normalization)
9. No side effects - incent only "good behavior"
10. Subject to Benchmark – subject to external validation in order to assess performance

Author : Tor Inge Vasshus

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