What do KPIs primarily measure?

Key Performance Indicators (KPIs) are critical metrics used to evaluate the success of an organization in achieving its objectives. They provide a quantifiable measure of performance, which allows organizations to assess how well they are progressing toward their strategic goals. KPIs are selected based on specific operational targets related to the organization's mission, allowing stakeholders to make informed decisions grounded in data.

By focusing on elements such as revenue growth, profitability, customer satisfaction, or market share, KPIs deliver insights into the overall health and effectiveness of an organization. This monitoring helps identify areas that require improvement and provides a benchmark against which performance can be measured over time.

While employee satisfaction, operational efficiency, and market trends are important metrics for various aspects of an organization, they serve narrower purposes and do not encompass the broader view of organizational success that KPIs aim to achieve. Therefore, the primary function of KPIs is to encapsulate the overall success and effectiveness of an organization in relation to its strategic goals.