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Key Performance Indicators: Developing, Implementing, and Using Winning KPIs, 3rd Edition by David Parmenter

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Chapter 1The Great KPI Misunderstanding

Many organizations are working with the wrong measures, many of which are incorrectly termed key performance indicators (KPIs). I believe it is a myth to consider all performance measures to be KPIs. From my research over the past 25 years I have come to the conclusion that there are four types of performance measures. These four measures are in two groups: result indicators and performance indicators.

I use the term result indicators to reflect the fact that many measures are a summation of more than one team's input. These measures are useful in looking at the combined teamwork but, unfortunately, do not help management fix a problem as it is difficult to pinpoint which teams were responsible for the performance or nonperformance.

Performance indicators, on the other hand, are measures that can be tied to a team or a cluster of teams working closely together for a common ...

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