**Estimated reading time:** 11–13 minutes


## 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

- [[Metri]]
- [[Measure]]
- [[Semantic Layer]]
- [[Business Glossary]]
- [[Data Governance]]
- [[Data Quality]]
- [[Data Lineage]]
- [[Leading Indicator]]
- [[Lagging Indicator]]