Understanding the Difference Between KPIs, Metrics and Key Results

A KPI (Key Performance Indicator) is a tool used to track the performance of a key area of your business. It always contains a metric to measure the performance of that key area. On the other hand, a key result is a tool that has a positive impact on the performance of a given metric. Therefore, it also always uses a metric.

Key results measure how far you are from achieving your goal. They should be numerical and updated every week. If the key outcome is binary, it can be a task or a plan and not a key outcome. When creating key results, it is important to find a metric that can actually be measured.

The key results are the metrics that change if we're successful. To do this, you should analyze the objective and see if there are words that can be quantified. For example, if the objective is to increase customer love, then the metric could be Net Promoter Score (NPS). Similarly, if the objective is to increase sales, then the metric could be referrals. We said earlier that key results are measurable progress toward a goal, while initiatives describe what is being done to achieve those results.

It is important to focus exclusively on the key results of metrics that indicate business value or impact. Activity-based key results measure the completion of tasks or activities in terms of project outcomes, while value-based key results measure the relative degree of success. To develop strategies, it is essential to understand the difference between KPIs, metrics and key results and to ensure that each of the concepts is used to guide the company's objectives in order to keep employees motivated and on target. The best way to find out if a potential key result is measurable or not is to ask if you can set an initial value and a target value. A key result is a metric with an initial value and a target value to measure progress toward the goal. Executives must set inspirational goals with difficult key outcomes, and then trust that their employees will find a way to make those results a reality.