Key performance indicators run through the life of a business, from building the growth drivers in the business model, to creating a proper financial model and finally to monitoring the actual performance of the business. Key performance indicators, simple put, are the 5-10 critical items that need to be constantly monitored to grow the business and achieve the profit and cash flow performance that makes the business self-sustaining.
Many of the companies I see do not use key performance indicators, a few use a poorly thought out subset and nobody I deal with has performance indicators for all lines of business. One thing is always true--once the situation is grave, a look back at the key performance indicators always shows the problem early enough to have fixed it in time. Perhaps the following joke from Flowing Data will help you to remember to instill the concept of key performance indicators at startup.
Credit: Flowing Data
