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**MD file:** `KPI.md`
**Estimated reading time:** 1113 minutes
# KPI
## Definition
A **KPI**, or **Key Performance Indicator**, is a metric selected because it indicates progress toward an important business objective.
Every KPI is a metric. Not every metric is a KPI.
## Simple Mental Model
> **Metric = something we can measure. KPI = a measurement important enough to tell us whether we are succeeding.**
## How It Works
A strong KPI connects:
```text
Business Objective
Desired Outcome
KPI
Target
Actions / Decisions
```
## Example
If the strategic objective is streaming growth, executive KPIs might include:
- Monthly Active Viewers
- Total Watch Hours
- Viewer Retention
- Streaming Revenue
Other metrics can still matter operationally without being KPIs.
## Leading vs Lagging Indicators
**Lagging indicators** measure outcomes after they happen, such as revenue or churn.
**Leading indicators** may provide earlier signals, such as weekly engagement or trial activation.
## How It Fits Into the Bigger Picture
```text
[[Fact Table]]
Raw measures
[[Semantic Layer]]
Governed metrics
[[Business Glossary]]
Agreed meaning
KPI
Power BI
Management decision
```
## My Company / Real-World Context
Potential KPIs could include:
- Monthly Active Viewers
- Total Watch Hours
- Viewer Retention
- Video Start Success Rate
- Advertising Revenue
- WCAG Compliance Rate
- SLA Compliance
If everything is "key," nothing is key.
## CTO Perspective
Bad executive dashboards display whatever is easy to measure.
Good dashboards display what is important to manage.
A CTO should challenge output metrics that do not demonstrate business value.
### Questions to Ask
- What business objective does this KPI represent?
- Why is it "key"?
- Who owns it?
- What is the target?
- What decision changes when this KPI changes?
- Is it leading or lagging?
- Can we trust the underlying [[Data Quality]]?
- Are we measuring output or outcome?
## Meeting Scenario
**Situation:** A department proposes 18 more metrics for the executive dashboard.
**Possible response:**
> "These may all be useful metrics, but which of them directly indicate whether we're achieving our strategic objectives, and what decisions would leadership make differently based on them?"
## Key Takeaways
- Every KPI is a metric, but not every metric is a KPI.
- KPIs should connect directly to business objectives.
- Leading indicators provide earlier signals; lagging indicators measure outcomes.
- Executive dashboards should focus attention.
- CTOs should distinguish output from outcome.
## Related Concepts
- [[Metric]]
- [[Measure]]
- [[Semantic Layer]]
- [[Business Glossary]]
- [[Data Governance]]
- [[Data Quality]]
- [[Data Lineage]]
- [[Leading Indicator]]
- [[Lagging Indicator]]