KPIs can Seem Elusive at First
When you first hear about Key Performance Indicators (KPIs), they sound straightforward—measure what matters and track success. But in practice, defining and using KPIs effectively is far more complex. Many professionals struggle to bridge the gap between understanding the concept and applying it in real-world scenarios. Why? Because KPIs often seem abstract until applied, and the right KPIs vary significantly depending on the organization, industry, and even individual projects.
Here’s why KPIs can feel elusive:
Confusion Between Metrics and KPIs – Many assume any measurable data point is a KPI, when in reality, KPIs should be directly tied to strategic goals.
Difficulty in Quantifying Some Goals – Not everything that matters is easy to measure, such as team morale or customer trust.
They Feel Static but Should Be Dynamic – KPIs aren’t meant to be set in stone; they should evolve as business needs change.
The Tension Between Simplicity and Accuracy – The best KPIs are clear and simple, yet they must capture complex business performance accurately.
Measurement Alone Doesn’t Drive Improvement – Tracking something doesn’t automatically lead to better results—KPIs must be paired with actionable insights and strategies.
When organizations first introduce KPIs, they often struggle with defining the right ones, aligning them with broader business objectives, and ensuring they provide real insights rather than just data overload.
KPIs in Project Management
In our recent
Project Insight Professional Development Series, we explored the role of KPIs in project success. As organizations scale, managing projects becomes increasingly complex. Without clear, measurable goals, teams can lose alignment, and project outcomes become harder to evaluate. That’s why KPIs are essential—they provide data-driven insights to track progress, improve decision-making, and ensure sustainable success.
Key Takeaways from Our Experts:
Defining Effective KPIs – Start with a focused set of meaningful metrics. Too many KPIs create confusion and unnecessary administrative work. Our experts recommend two or three primary KPIs per project to maintain clarity and impact.
The Pitfall of Measuring Too Much – While it’s tempting to track multiple data points, having too many KPIs can lead to mixed signals. If some metrics show success while others indicate failure, how do you interpret the outcome? Instead, focus on the essential indicators that directly align with business and project goals.
The Balance Between Leading and Lagging Indicators – Leading indicators predict future performance (e.g., customer satisfaction surveys indicating future churn), while lagging indicators measure past performance (e.g., revenue growth from completed sales). A good KPI strategy includes a mix of both.
Aligning KPIs Across Teams and Departments – One common problem is that different departments define KPIs in silos, leading to misalignment. Ensuring KPIs are connected across teams prevents conflicting priorities and improves collaboration.
“If you try to accomplish too many things at once, what’s the likelihood of succeeding in all of them? Pretty low. Stay focused on what truly matters.” -Diane Buckley-Altweis
Practical KPIs for Project Managers
In a recent
coaching post on LinkedIn, Mary Tresa Gabriel, a project manager and career coach, shared some realistic KPIs that PMs can actually track and act upon.
- Schedule Management
Average Delay Per Milestone – Instead of just tracking whether a project is on time or not, measure how many days/weeks each milestone is getting delayed.
Number of Change Requests Affecting the Schedule – Count how many changes impacted the original timeline. If the number is high, the planning phase needs improvement.
Planned vs. Actual Work Hours – Compare how many hours were planned per task vs. actual hours logged.
2. Cost Management
Budget Creep Per Phase – Instead of just tracking overall budget variance, break it down per phase to catch overruns early.
Cost to Complete Remaining Work – Forecast how much more is needed to finish the project, based on real-time spending trends.
% of Work Completed vs. % of Budget Spent – If 50% of the budget is spent but only 30% of work is completed, there's a financial risk.
3. Quality & Delivery
Number of Rework Cycles – How many times did a deliverable go back for corrections? High numbers indicate poor initial quality.
Number of Late Defect Reports – If defects are found late in the project (e.g., during UAT instead of development), it increases risk.
First Pass Acceptance Rate – Measures how often stakeholders approve deliverables on the first submission.
4. Resource & Team Management
Average Workload per Team Member – Tracks who is overloaded vs. underloaded to ensure fair distribution.
Unplanned Leaves Per Month – A rise in unplanned leaves might indicate burnout or dissatisfaction.
Number of Internal Conflicts Logged – Measures how often team members escalate conflicts affecting productivity.
5. Risk & Issue Management
% of Risks That Turned into Actual Issues – Helps evaluate how well risks are being identified and mitigated.
Resolution Time for High-Priority Issues – Tracks how quickly critical issues get fixed.
Escalation Rate to Senior Management – If too many issues are getting escalated, it means the PM or team lacks decision-making authority.
6. Stakeholder & Client Satisfaction
Number of Unanswered Client Queries – If clients are waiting too long for responses, it could lead to dissatisfaction.
Client Revisions Per Deliverable – High revision cycles mean expectations were not aligned from the start.
Frequency of Executive Status Updates – If stakeholders are always asking for updates, the communication process might be weak.
7. Agile Scrum-Specific KPIs
Story Points Completed vs. Committed – If a team commits to 50 points per sprint but completes only 30, they are overestimating capacity.
Sprint Goal Success Rate – Tracks how many sprints successfully met their goal without major spillovers.
Number of Bugs Found in Production – Helps measure the effectiveness of testing.
Simplicity Wins
At the end of the day, KPIs should serve as decision-making tools, not distractions. As Mary Tresa Gabriel puts it: “Forget CPI and SPI—just check time, budget, and happiness. Simple and effective!”
Whether you’re introducing KPIs for the first time or refining your approach, the key is to focus on meaningful, actionable metrics that align with your project and business goals. Avoid overwhelming teams with excessive tracking, and instead, empower them with the right insights to drive success.