Performancemetricsexplained

Clarity. Clear metrics remove guesswork and align teams on what success looks like.

Early warning. Operational efficiency metrics, customer satisfaction signals, and employee engagement scores highlight issues before financials slip.

Better storytelling. Balanced metrics translate complex change initiatives into plain numbers for boards, regulators, and partners.

1. Financial metrics Revenue growth, margin, cash conversion cycles, cost-to-income ratio, and return on capital.
2. Operational metrics Cycle times, error rates, on-time delivery, utilisation, and automation coverage.
3. Customer + people metrics Net promoter score, customer effort score, churn, employee engagement, and productivity indexes.

1. Define the decision Clarify which decision or objective the metric informs—growth, risk, compliance, or transformation.
2. Pick leading + lagging indicators Balance predictive signals with hard outcomes so you can steer in real time.
3. Instrument data flows Automate data collection from source systems and document definitions so metrics stay consistent.
4. Review and retire Assess each metric quarterly. Remove ones that no longer drive action and add new measures as strategy shifts.

Key performance indicator (KPI). A critical metric that shows whether strategic goals are on track.

Leading indicator. A metric that predicts future performance, such as pipeline health or cycle time.

Metric taxonomy. A documented catalog of metrics, owners, definitions, and source systems.