Definition
A key performance indicator (KPI) is a quantifiable measure an organization selects to gauge progress toward an important objective — for example monthly active users, customer churn rate or gross margin.
Meaning and usage
Good KPIs tie directly to strategy, are few in number, and can be measured regularly and objectively. The classic failure modes are tracking a wall of vanity metrics, or gaming the number in ways that distort real behavior — which is why choosing the right indicator matters more than adding more of them.
Usage
Operating reviews, performance evaluations and growth analyses all assign KPIs to different teams. Status meetings routinely ask how the month’s KPIs are tracking.
Related and confusable terms
KPIs are most often confused with OKRs (objectives and key results): OKR is a goal-management framework, while KPIs are the measurement tools inside it, so the two operate at different levels. A KPI is also not just any statistic — only measures tied to a key objective and reflecting performance earn the name.