Glossary
What is a KPI?
KPI: A KPI (key performance indicator) is a measurable value that shows how well a company, team or project is progressing toward one specific goal.
A KPI is a number you track on purpose, because it shows progress toward one specific goal. Companies can measure hundreds of things. Only the few that tell you whether the goal is being reached are KPIs.
A usable KPI has five parts:
| Part | What it settles | Example |
|---|---|---|
| Goal | Which goal it serves | Deliver reliably |
| Definition | How it is calculated | Deliveries on or before the promised date ÷ all deliveries |
| Source | Where the data comes from | Transport system, weekly |
| Target | What counts as good | 96% |
| Owner | Who answers for it | Head of operations |
A worked example
A logistics company shows its Board the same four KPIs every quarter: revenue €48.6m (+18% on last year), EBITDA margin 14.2% (+2.5 percentage points), net cash €11.8m and on-time delivery 96.4%. The margin is defined as EBITDA divided by revenue: €6.9m ÷ €48.6m = 14.2%. Because the definitions never change, the Board can compare quarter with quarter.
How to choose and show KPIs
- Start from the goal, then pick one to three KPIs that show progress toward it.
- Write each definition down once and reuse it in every deck.
- Add a comparison to every KPI: a target, the previous period, or both. A color status such as RAG helps when targets exist.
- Include one leading KPI. Revenue reports the past; the number of qualified proposals sent hints at the next quarter.
- Keep the set stable. Add KPIs rarely and remove them openly.
KPI, metric and OKR
All KPIs are metrics, but most metrics are not KPIs. A KPI monitors what has to stay healthy, such as on-time delivery. The OKR entry compares it with a goal for change.
Typical mistakes
- Vanity metrics. Page views or followers rise whether or not the business improves.
- No written definition. Two decks then show two different numbers under one name.
- Too many. Twenty KPIs on a slide means none is key.
- No target or comparison. A bare number invites the question "is that good?"
- No owner. A KPI nobody answers for does not change.
To see what drives a KPI, split it into a driver tree.
FAQ
Frequently asked questions
What is the difference between a KPI and a metric?
A metric is any number you can measure. A KPI is one of the few metrics that shows whether a specific goal is being met. Every KPI is a metric, but most metrics are not KPIs.
How many KPIs should a presentation show?
As many as the audience can take in at a glance, usually four to six on one slide. Put the rest in a table or the appendix. Show the same KPIs in the same order every period so readers can compare.
What is the difference between a KPI and an OKR?
A KPI monitors what has to stay healthy, such as on-time delivery. An OKR is a goal for a single period. The OKR entry puts the two side by side.
What is the difference between leading and lagging KPIs?
A lagging KPI reports what has already happened, such as revenue or margin. A leading KPI moves first and lets you steer, such as the number of qualified proposals sent. Good reports show both.
Keep reading
Management reporting
- TemplateExecutive summary
Lead with the recommendation, the one number that matters, the options compared and the decision you need. Template with an 8-slide example.
- GuideExecutive summary examples
Six fictional executive summaries, annotated: business plan, project report, proposal, annual report, consulting study and investor update, plus a checklist.
- GlossaryPre-read
A pre-read is a document sent before a meeting so attendees arrive informed and the meeting goes to questions and decisions. See the format and an example.
- ConvertReport to presentation
Attach the PDF or Word report, lead with the summary, write action titles and approve a plan first. Turn a long report into a short deck with AI.
- TemplateBudget presentation
A budget presentation template with 8 slides: summary, assumptions, income statement, EBITDA bridge, capex, sensitivity and the decisions you need.
- GuidePresenting to executives
How to present to executives and senior management: lead with the recommendation, plan for a shortened slot, keep detail in the appendix and send a pre-read.
Where to go next
- ConvertTurn a spreadsheet into slides
Tables keep editable cells, and you change the numbers later in the editor or by request.
- ProductWrite the report as an A4 document
Export Word to edit or PDF to send, from a plan you approve first.
Less theory, more finished slides
Describe the deck you need. The AI plans, writes and designs it, and hands you an editable PowerPoint.
Build your first deck freeFree plan, no card needed