Because what you measure shapes what your team does.

Introduction

KPIs (Key Performance Indicators) are powerful, when chosen wisely.

They drive focus.
They guide behavior.
They influence culture.

But poorly chosen KPIs?
They create noise, misalignment, and the illusion of progress.
They reward the wrong behavior or overlook what actually matters.

Before you roll out another dashboard, pause and ask:
“Is this KPI doing more harm than good?”

In this article, we’ll walk you through 5 simple yet critical filters every leader should apply before finalizing a KPI, so you don’t just measure what’s easy, but what truly matters.

1. Relevance: Does it directly link to a business objective?

The first filter is strategic alignment.

Ask:

• What goal is this KPI connected to?
• If this KPI improves, will the business actually benefit?
• Would it matter if this number went up, or is it just noise?

📌 Avoid: Metrics that look good on paper but don’t move the business forward (a.k.a. vanity metrics).
✅ Use: KPIs that tie back to revenue, retention, efficiency, satisfaction, or another core priority.

A relevant KPI answers the question: “So what?”

2. Clarity: Is it easy to understand and interpret?

If a KPI is confusing, it won’t drive action.

Ask:

• Would your team know what this KPI means without a long explanation?
• Can they clearly see what behavior drives it up or down?
• Is the formula or logic behind it transparent?

📌 Avoid: Overcomplicated composite scores or abstract ratios that create doubt or debate.
✅ Use: Clear, direct metrics that tell a story at a glance.

A clear KPI becomes a shared language between leaders and teams.

3. Controllability: Can the person or team influence it directly?

Nothing kills morale like being judged on something you can’t control.

Ask:

• Does the team have the tools, authority, and resources to affect this number?
• Are there external dependencies that make this metric unreliable?
• Is this better tracked at the individual, team, or department level?

📌 Avoid: KPIs that depend too heavily on external variables (e.g., “website traffic” for a backend engineer).
✅ Use: Metrics tied to daily decisions, habits, or execution patterns.

If people don’t feel ownership over a metric, they won’t feel motivated to improve it.

4. Balance: Does it encourage the right behavior without distorting priorities?

Great KPIs drive the right kind of performance, not just performance at any cost.

Ask:

• Could this KPI be gamed or manipulated?
• Will people cut corners to hit the number?
• Does this KPI encourage collaboration or create internal conflict?

📌 Avoid: Metrics that reward volume without quality, or speed without sustainability.
✅ Use: Balanced KPIs that include both outcomes and behaviors, or pair complementary metrics (e.g., “Sales Closed” + “Churn Rate”).

Every KPI creates incentives. Be sure you like the behavior it promotes.

5. Frequency: Is it measured and reviewed at the right cadence?

Some metrics are useful daily. Others make more sense monthly or quarterly.

Ask:

• How often will this KPI be reviewed?
• Is the timeline realistic for showing meaningful progress?
• Does this cadence allow for course correction?

📌 Avoid: Reviewing long-term KPIs too frequently, which causes panic or overreaction.
✅ Use: A cadence that supports insight, not noise.

A great KPI is paired with the right rhythm, otherwise, it’s just a number on a screen.

Bonus: Test It with This Litmus Question

Before finalizing any KPI, ask yourself:

“If someone optimized their performance entirely around this KPI, would I be happy with the result?”

If the answer is “not really,” it’s not a good KPI.

Final Thought: Be Intentional, Not Just Operational

Don’t choose KPIs out of habit.
Don’t copy them from another company.
Don’t default to what’s easy to track.

Choose them based on what your business, and your people, actually need.

Use these 5 filters:

1. Relevance
2. Clarity
3. Controllability
4. Balance
5. Frequency

And you’ll create KPIs that:

• Reflect real contribution
• Build team ownership
• Drive meaningful outcomes

Because the right metrics don’t just measure progress, they accelerate it.

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