Navigating Organizational Success: Choosing the Right Key Performance Indicators (KPIs)

Co-authored with Matt Linder

Luis had built his midsize business from the ground up. In the early days, he had a clear grasp of everything happening—he could see which employees were performing well, which clients were satisfied, and how money was flowing in and out. But as the company grew, so did the complexity. Layers of management were added, decisions were made further from his direct oversight, and soon, it became unclear what was working and what wasn’t. When revenue started to drop and employees began quitting at an alarming rate, Luis was left scrambling. He didn’t have the right information to diagnose the problem, and without that, he couldn’t make informed decisions to fix it.

Imagine running a business without knowing if you’re making progress like Luis. One of the most common struggles we’ve encountered in growing organizations is figuring out which Key Performance Indicators (KPIs) to track to ensure they are heading in the right direction. It’s not just about choosing what to measure. It’s also about knowing how often to collect data, how to collect it, and most importantly, what to do with it once you have it. Too often, leaders find themselves drowning in numbers that don’t actually drive meaningful decisions, or worse, they set out to improve performance without first defining success.

It’s like getting in your car and driving aimlessly, hoping you end up somewhere worthwhile. You might stumble upon a decent destination, but more likely, you’ll waste a lot of time, fuel, and frustration before realizing you should have set your GPS before pulling out of the driveway. Effective organizations start with the end in mind. They define their goals first, identify the most critical metrics tied to those goals, and then work backward to determine how to measure and influence them.

Setting the Right KPIs: A Systematic Approach

To establish meaningful KPIs, organizations must take a structured approach. Instead of relying on intuition or convenience, a well-defined process ensures KPIs are purposeful and actionable.

The first step is to start with the end in mind by clearly identifying the organization’s key priorities and long-term goals. Without understanding what success looks like, it’s impossible to measure progress effectively. Once priorities are set, they need to be broken down into measurable components, ensuring they can be tracked both quantitatively and qualitatively.

Organizations must also distinguish between leading and lagging indicators. Leading indicators help predict future success, allowing proactive adjustments, while lagging indicators confirm past performance and highlight areas needing improvement. A well-balanced approach includes both, ensuring organizations can adjust course before problems escalate while also validating past decisions.

Indicator Type and Examples of Accomplishments

• Leading Indicators - Increased employee training completion rates, improved customer satisfaction scores, growing website traffic, higher engagement in internal processes.
• Lagging Indicators - Revenue growth, reduced turnover rates, improved profit margins, higher client retention, better regulatory compliance scores.

However, even the best-defined KPIs are meaningless if the data isn’t accurate or accessible. Ensuring data availability and consistency is crucial for making informed decisions. Without reliable data, organizations risk acting on misleading insights, leading to wasted resources and ineffective strategies.

Ownership and accountability are equally important. Each KPI should be assigned to a specific role or department within the organization, making sure someone is responsible for monitoring and acting on the data. Finally, KPIs should not be static. Regular review and adjustments ensure they remain relevant as the organization evolves.

A Balanced Scorecard Approach to KPIs

Once organizations have identified their core KPIs, it's important to ensure a well-rounded perspective. A balanced scorecard approach provides insight across key areas, preventing tunnel vision on a single aspect of business health.

To ensure a comprehensive view of organizational health, KPIs can be distributed across a balanced scorecard, incorporating four key areas:

By implementing a balanced scorecard, organizations can maintain a clear, multi-dimensional view of success, ensuring that improvements in one area do not come at the expense of another. However, while these high-level KPIs provide strategic insight, they must also be translated into individualized scorecards that match the responsibilities and accomplishments of different roles within the organization. This ensures that every team member understands their impact and is accountable for driving meaningful progress.

By the way, for those of you who aren’t familiar with the Net Promoter Score (NPS) is a widely used metric for measuring customer satisfaction and loyalty that is typically collected through a very short survey. Organizations ask customers:

"On a scale from 0 to 10, how likely are you to recommend our product/service to a friend or colleague?"

Based on their responses, customers are categorized into three groups:

• Promoters (9-10): Enthusiastic, loyal customers who actively refer others.
• Passives (7-8): Satisfied but not loyal enough to promote the brand.
• Detractors (0-6): Unhappy customers who could damage the brand through negative word-of-mouth.

The NPS formula is:

NPS = % of Promoters ? % of Detractors

A positive NPS indicates more loyal customers, while a negative score suggests customer dissatisfaction.

Individualized Scorecards: Tailoring KPIs to Roles

While a balanced scorecard gives a broad organizational view, individual accountability is just as important. Every team member should have specific KPIs tailored to their responsibilities and impact. These should be adjusted at the individual, group, and organizational levels to align with broader business objectives.

While organizational KPIs provide a macro-level view, it’s essential to drill down into specific roles and responsibilities. Individualized scorecards ensure that each team member is tracking metrics that reflect their contributions and impact. For example:

• Frontline Staff – Number of tasks completed, efficiency metrics, and quality of service scores.
• Managers – Team performance, operational efficiency, and employee engagement scores.
• Executives – Strategic goal alignment, overall profitability, and market positioning.

By aligning KPIs at both organizational and individual levels, businesses can ensure that every employee understands how their work contributes to success, creating a culture of accountability and continuous improvement.

Focusing on the right KPIs is critical for meaningful decision-making and behavior change. Organizations should align their KPIs at every level—individual, team, and organizational—to ensure effectiveness. Here’s how we approach it:

1. Start with Clarity – What are the biggest priorities for the organization right now? What does success actually look like? The answers to these questions should guide what you measure.
2. Align KPIs to Goals – Each KPI should directly tie back to something that impacts the organization’s success, whether that’s student outcomes in a school, staffing efficiency in a clinic, or financial stability in a business.
3. Keep Them Actionable – A good KPI is something the team can actually influence. It should be specific, measurable, and realistic, allowing for meaningful action rather than just passive observation.
4. Measure What Matters – Not all data is useful. Some numbers look impressive but don’t actually help leaders make better decisions. KPIs should be tied to outcomes, not just vanity metrics.
5. Review and Adjust Regularly – As priorities shift, so should KPIs. What was critical last year may no longer be relevant today. Regularly reassessing KPIs ensures they stay aligned with organizational goals.

Practical Examples: Finding the Right Data

When working with organizations in the Applied Behavior Analysis (ABA) field, we often start by looking at HR records—recruitment, hiring, onboarding, and retention. If turnover is high, we track key metrics like resignation rates, employee tenure, and satisfaction surveys to determine where breakdowns are occurring. If cash flow is an issue, we analyze accounts receivable, invoice latency, and payroll-to-billing ratios. The key is to find the data that gives real insight into the problem, not just a number to put on a spreadsheet.

For example, if an agency is struggling with frequent resignations, we don’t just track turnover—we dig deeper into unit utilization, client impact, and onboarding effectiveness. By identifying the root cause and implementing targeted interventions, we can then measure whether those interventions are making a meaningful difference.

Keep It Simple

In the end, remember KISS: Keep It Simple Sucka! More is not better, and complexity is the enemy of execution, sustainability, and scalability. KPIs should revolve around the needs of customers, shareholders, and stakeholders and be just enough to serve as a tool for growth at every level—individual, team, and organizational to measure the past and present, and predict the future; moreover, instead of using data to judge or penalize, it should be leveraged as a shaping procedure, reinforcing successive approximations toward desired performance goals. Too often, data is used to show where people fall short, creating a culture of fear around feedback. This needs to be flipped on its head.

The Final Takeaway

For KPIs to be meaningful and effective, they must focus on incremental improvement, ensuring that goals are both challenging and attainable. Goals should be set based on the current level of performance while also reflecting industry standards. Sub-goals may be structured around an individual's, team's, or organization's current baseline, with industry standards serving as a long-term target. One way to accomplish this is through IMPACT Goals (Gavoni & Weatherly, 2024), which stand for:

• Individualization over-generalization – Goals should be tailored not only to the specific role and contributions of each employee but also to the collective success of teams and the overall organization. Each level should have KPIs that align with broader objectives, ensuring that progress at the individual level drives team performance, which in turn strengthens the organization as a whole.
• Manageability for better focus – KPIs should be clear and achievable at the individual, team, and organizational levels to ensure focus and prevent overwhelm.
• Positive Motivation built into the process – KPIs should encourage growth by reinforcing incremental progress at all levels rather than being used as a punitive measure.
• Alignment with daily work – KPIs should integrate seamlessly into the daily responsibilities of individuals, teams, and the organization, making them meaningful and actionable.
• Connection to short-term accomplishments – Accomplishments (1978) are the measurable outcomes of behavior, serving as tangible milestones that indicate progress toward goals. Goals should be structured around these accomplishments at the individual, team, and organizational levels, ensuring continuous motivation and momentum.
• Trackability for ongoing success – KPIs should be designed for regular tracking at the individual, team, and organizational levels, allowing for necessary adjustments and sustained improvement.

By designing KPIs with these principles in mind, organizations can create a culture where data is embraced rather than feared. Employees will see performance measurement as a pathway to success rather than a mechanism for criticism. When used correctly, KPIs don’t just track progress—they drive meaningful, lasting growth. It’s about making sure every mile traveled is moving the organization toward its destination, not just burning fuel. One of us eventually hired a plumber to fix a leaky faucet, which reduced both the water bill and frustration. Likewise, organizations must track the right metrics to solve the right problems efficiently.

Defining the right KPIs isn’t always easy, but with a clear process, leaders can ensure they are making data-driven decisions that actually move the needle. After all, if you don’t know where you’re going, any road will take you there—but probably not the one you want.

References:

Gavoni, P., & Weathelry, N. (2024). Deliberate coaching: Optimizing teaching and learning through behavior science: Education edition KeyPress Publishing.

Gilbert, T. F. (1978). Human competence: Engineering worthy performance. McGraw-Hill.

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About the Author

Specializing in human performance, coaching, and organizational leadership, Dr. Paul "Paulie" Gavoni is a behavior scientist and educator who has worked across education and human services for almost three decades. In this capacity, he has served the needs of children and adults through various positions, including COO, Vice President, Director of School Improvement, Leadership Director, Professor, Assistant Principal, School Turnaround Manager, Clinical Coordinator, Therapist, District Behavior Analyst, and Director of Progam Development and Public Relations at PCMA. Dr. Gavoni is passionate about applying Organizational Behavior Management (OBM), or the science of human behavior, to make a positive difference in establishing safe, productive, and engaging environments that bring out the best in faculty and staff so they can bring out the best in the learners they serve. He is an active board member of the Opioid Awareness Foundation and World Behavior Analysis Day Alliance.

Known for his authenticity and practical approaches, Dr. Gavoni is the host of the Top 1.5% globally ranked Crisis in Education Podcast and a sought-out speaker at various Educational and Behavior Analytic Conferences Internationally. He a the Wall Street Journal and USA Today best-selling co-author of The Scientific Laws of Life & Leadership: Behavioral Karma; Quick Wins! Accelerating School Transformation through Science, Engagement, and Leadership; Deliberate Coaching: A Toolbox for Accelerating Teacher Performance; and MMA Science: A Training, Coaching, and Belt Ranking Guide. Dr. Gavoni is proud to introduce OBM and Applied Behavior Analysis to worldwide audiences through his numerous publications and his work with PCMA to create productive, safe, and positive cultures.

Beyond his work in education and human services, Dr. Gavoni is also a former Golden Gloves Heavyweight Champion and a highly respected striking coach in combat sports. Coach “Paulie Gloves,” as he is known in the Mixed Martial Arts (MMA) community, has trained world champions and UFC vets using technologies rooted in the behavioral sciences. Coach Paulie has been featured in the books Beast: Blood, Struggle, and Dreams a the Heart of Mixed Martial Arts, A Fighter’s Way, and the featured article Ring to Cage: How four former boxers help mold MMA’s finest. He is also an author who has written extensively for various online magazines such as Scifighting, Last Word on Sports, and Bloody Elbow, where his Fight Science series continues to bring behavioral science to MMA. Finally, Paulie was also a featured fighter in FX’s highest-rated show at the time, The Toughman, and as an MMA coach in the Lifetime reality series Leave it to Geege.

Disclaimer: All ideas presented are original to the author. ChatGPT has been used solely to enhance the reading experience.