Difference between KPIs and Metrics

One of the most common discussions we have when we embark on a new performance management or strategic planning process is the difference between KPI and Metric.

Difference between KPI and Metric

When we start a new project, as well as in many different life situations, making sure the different players understand the definitions and agreeing on a terminology is a big step for the successful design and implementation of the solution.

One of the most common terms in Performance Management is Key Performance Indicator a.k.a. KPI or Performance Measures. They are the main way we have to keep track of our results. We compare our actual performance against what we estimated or expected and see if we did good or not.

Metrics on the other hand are any quantitative measurement or statistic such as an event, number or items, etc…

[h2] Two main items that create a difference between KPI and Metric:[/h2]

  • KPIs always have targets, metrics don’t. The way we measure the “P” on KPI (Performance) is by comparing our results against our targets.
  • When we talk about Strategic Planning, KPIs are always aligned to our plan and have a direct impact on the rest of the elements (Goals, Objectives, Priorities, etc.). Metrics are not necessarily aligned to the plan, although they could provide additional information to support or explain the results.

Some people consider other differences like the fact that KPIs drive actions or are more used by upper management, although I think those go along the lines of being aligned with the strategy.

Based on this, we can say that every KPI is a Metric but not every Metric is a KPI.

KPIs are supposed to be the real deal, the important ones. If we treat any given Metric as a KPI then we can make decisions based on non-relevant facts. Like many out there say, when everything is important, then nothing is important.

Defining the right KPIs and Metrics is a great start to success.

Leave a Reply

Your email address will not be published.