Select Page

Clean up your jargon.

Are you, like me, confused by the way people use KPI, PI, Measure, CSF etc apparently interchangeably. I am.

People often ask, what is the difference between KPI, CSF , measures, performance indicators? Frankly people use them interchangeably and loosely. I recently saw a definition of a KPI on a forum that made me angry and so posted this reply: A posting for all those literalists out there!!!!!

“KEY PERFORMANCE INDICATORS: Key Performance Indicators (KPIs) represent a set of measures focusing on aspects of organizational performance that are the most critical for the success of an organization.” It was actually quoted from David Parmenter’s book on KPIs’ which is actually quite good. But this definition is terrible.

You see, here is a classic problem with the definition cited: “Key Performance Indicators (KPIs) represent a set of measures…” ie it defines “an indicator” as “a measure”. In fact a set of measures. Ummm?

For goodness sake – what is the difference? Why not call them “key performance measures” then? And frankly what is the difference between KPIs and good old “Critical Success Factors” which is what he later goes on to define them as, as well!!!! This seems like muddled thinking to me and the source of all these problems.

Try this. Go back to basic plain English, Please!!!!!

1) If I “measure” something I have a tool for measuring and units. Think of a ruler and a table. Its 3 foot by 6 foot using a ruler. I have measured it.

2) In contrast in common parlance, we use “Indicator” in two ways:

a. If I have an “Indicator” then that is “indicating” something. Its indicative – (ie it points towards something, but is not necessarily accurate). So an “indicator” of the size of the table would be that I could fit a small pool table on it or it is large enough to seat six people. It is indicative of its size, but not a measure.
b. Likewise we have “Indicators” on cars to show where we are about to go, rather than where we are. So an indicator can be used to mean “it indicates direction”, or intention.
c. In other words, indicator, is not the direct measure but an approximation, surrogate or precursor to the real measure. And in all these cases is clearly distinct from a direct measure. I can tell whether I have a measure – or an indicator. I can test the difference.

3) Factor: An influence. One of a number of influences on something that makes up the whole. A variable, from a set of variables, under examination in a study. As in “which factors will improve sales and which of those factors are most critical to success? – Ah ah, they must be the most critical success factors”. Neither an indicator nor a measure. Clearly something different. Which oddly enough is why, in English, we have three different words for these three ideas. Surprise, surprise.

Unless we can get back to this simple form and stop cluttering up the conversation with jargon that is self referral, (measure = indicator) then we will all be in a mess.

As I always say in these situations, “Jargon should be between consenting adults in private”. Clearly we are neither all consenting, nor in private in this forum.

I was once asked to talk on “Strategic KPIs” Yes “Strategic key performance indicators” Those KPIs that are strategic (as opposed to tactical), from amongst those Performance indicators that were key (to something unspecified), as opposed to those that were not key (to something again unspecified). See what I mean. And we haven’t even got to performance, indicator and measure yet. I spent the first 10 minutes pointing out the stupidity of the title of the talk, which went down well.

Plain English please – it saves a lot of problems with jargon.

Finally a useful linguistic trick. Given anything “jargonised phrase” such as “Key performance indicator”, it always makes more sense if you turn it into a proper sentence with verbs and subjects and objects. eg A Key performance indicator is an indicator of performance that is more key (in some way) that others. Or CSF – A factor that is critical to success. See what I mean – it makes the meaning much clearer, already.

Hail Plain English, sorry, I mean “English that is plain (and uncomplicated)”