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What are key result indicators (KRIs)? KRIs are measures that often have been mistaken for KPIs.

The common characteristic of these measures is that they are the result of many actions carried out by many teams, hence the use of the term “result.” And they are good summary measures, hence the term “key.” They give a clear picture of whether your organization is traveling in the right direction at the right speed. They provide the board or governing body with a good overview as to progress with regard to the organization's strategy. These measures are easy to ascertain and are frequently reported already to the board or governing body.

The fact that key result indicators are called KPIs creates a problem that many organizations do not appreciate. They cannot understand why performance ebbs and flows and appears outside the control of the senior management team. These key result indicators that are reviewed typically on monthly or quarterly cycles will only tell you whether the horse has bolted or not. Key result indicators are thus of little use to management as they are reported too late to change direction, nor do they tell you what you need to do to improve these results.

You know you have a KRI when the CEO is in reality the person ultimately responsible for the measure.

For the private sector, key result indicators would include:

● Net profit before tax

● Net profit on key product lines

● Customer satisfaction (by customer group, showing the trend over an 18-month period)

● Return on capital employed

● Employee satisfaction (by groups showing the trend over an 18-month period)

For government and nonprofit agencies these measures would also include:

● Availability of the major services we offered e.g., average waiting time for service

● On-time implementation of infrastructure projects

● Membership numbers (for professional organizations)

Separating KRIs from other measures has a profound impact on reporting, resulting in a separation of performance measures into those impacting governance and those impacting management. Accordingly, an organization should have a governance report (ideally in a dashboard format), consisting of up to 10 KRIs for the board, and a series of management reports reporting progress in various intervals during the month depending on the significance of the measure.