In the previous article, we explored the key differences between KPIs (Key Performance Indicators) and reports. But knowing the difference is just the start. The next step is making sure you’re actually measuring what matters. It’s not only about sorting what belongs in a report and what qualifies as a KPI — it’s about asking the right questions and making sure the answers lead to real decisions.
Let’s say someone asks, “Are we on track to hit our sales target this month?” Depending on the answer, that could trigger action from the sales or marketing team, maybe a last-minute campaign or a push on certain deals. And if you notice the same sales drop every year in a certain month, it could lead to a long-term strategy change, like planning a promo in advance. That’s a good KPI: it keeps you focused and helps you act. And often, it points you toward a report for deeper analysis and planning.
So how do you define the right KPIs? Start with the questions you need answered and what those answers could lead to. Here’s another example: a sales person asks your team "What is a good estimated time to deliver I can offer to my customers?", then you can look into comparing your production capacity to your current workload. This can help you set realistic delivery estimates for customers. If capacity is tight and a big order comes in, you might need to outsource, reschedule, or even consider buying new equipment. If one part of your production line is always overloaded while another stays idle, it could help you adjust your sales strategy to better balance the workload.
The connection between question and action is what makes a KPI meaningful. If you're tracking product returns, but never actually do anything with that number, it's just noise. But if a spike in returns triggers a quality check, a product review, or a customer support follow-up, then it’s doing its job.
Another way to think about good KPIs is to look at the decisions you need to make — either regularly or from time to time. For example: “Should I hire a new salesperson or invest in another machine?” Now you're talking strategy. The KPIs that help answer this might include sales performance, order backlog, and production capacity. If sales are lagging and you’ve got idle time on the floor, hiring sales might be the answer. If sales are strong but your team is constantly working overtime, maybe it’s time to expand capacity.
To keep your dashboard clean and your KPIs useful, focus on those that lead to decisions or trigger action. At Nengatu, we believe those moments should happen close to where the work is done, and not just on a dashboard that people glance at once a week. That’s why we build KPIs directly into the workflow, so your team can spot issues and act on them in real time. Meaningful KPIs don’t just track progress — they help you move forward.