Strategy & business advisory
KPIs that measure performance, not activity
Most organisations do not lack KPIs. They have too many, and most of them count effort rather than results. How to tell the difference, and five rules for KPIs that work.
By Iyad Assad · November 2026 · 4 min read
Most organisations do not lack KPIs. They have too many, and most of them count effort rather than results. A dashboard full of green indicators can sit alongside falling margins and missed targets, because the measures track what people did, not what the business achieved. And KPIs do more than measure: they drive behaviour. People work towards what they are measured on, so a KPI that counts activity produces more activity, not better results.
Activity versus outcome
An activity measure counts work: sales calls made, trainings held, reports submitted, projects launched. An outcome measure shows whether that work changed anything: revenue from new customers, error rates after training, decisions taken on time, projects delivered within budget.
Activity measures are not useless. They help a manager run a team day to day. But when they become the KPIs a leadership team reviews, they reward being busy, and they cannot tell the board whether the strategy is working.
| Activity measure | Outcome measure |
|---|---|
| Number of sales meetings | Revenue from new customers |
| Training hours delivered | Change in error or rework rates |
| Number of projects launched | Projects delivered on time and on budget |
| Policies issued | Audit findings closed |
| Marketing campaigns run | Cost to acquire a customer |
Five rules for KPIs that work
- Start from the strategic objectives. Each KPI should be tied to a strategic objective and show progress towards it: growth in the segments we chose to compete in, margins at the level the plan needs, a transformation delivering its benefits. A KPI that cannot be traced to an objective is a candidate to drop.
- Keep it short. Five KPIs per function, at most, and fewer at board level. Beyond that, nobody remembers them and nothing gets prioritised.
- One owner each. A KPI shared by three departments is owned by none. Name the person accountable for moving it.
- Set a target, a baseline and a deadline. A number without a target is information, not a KPI. Record where it stands today so progress is visible, and say by when the target should be reached.
- Track it at its own pace, review it on a fixed cycle. Each KPI is tracked as often as its data allows: weekly, monthly or quarterly. The leadership review should follow a fixed cycle, for example quarterly, and end in decisions, not in explaining why the numbers moved.
A quick test
Pick any KPI on your current dashboard and ask: if this number doubled, would the business be better off? If the honest answer is "not necessarily", it is measuring activity.
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