Are your KPIs helping you lead more effectively, or are they just numbers you track because you always have?

Key Performance Indicators (KPIs) are everywhere. Dashboards, reports, OKRs, quarterly reviews, and strategy sessions often revolve around numbers. But numbers alone are not insight. Without a clear connection to business goals and real-world decisions, even the best-looking metrics can become meaningless.

A good KPI does not just describe what is happening. It helps you decide what to do next.

At Sidubara, we help organisations turn their metrics into practical tools that support decision-making and drive progress. In this article, we talk about some of the most common pitfalls with KPIs and share three core principles for evaluating and building KPIs that not only measure, but also lead.

The problem with too many KPIs

One of the most common issues we encounter is KPI overload. Teams often track dozens of metrics across platforms, hoping that more data will lead to greater clarity. In reality, the opposite is usually true. The more metrics you try to follow, the harder it becomes to distinguish what truly matters. Instead of sharpening focus, the sheer volume of information can blur priorities and dilute attention.

When everything is labelled as a KPI, the focus disappears. You end up with a wall of numbers, all competing for attention, but few tied clearly to strategic goals. This kind of metric inflation creates the illusion of control while making it harder to know where to act. The result is noise, not insight.

Leaders may spend more time interpreting dashboards than making decisions. Teams might report on metrics out of habit, rather than because they spark action or learning. A cluttered dashboard might give the appearance of being data-driven, but if the information isn’t guiding choices or prompting meaningful discussions, it becomes just another report that you glance at and then file away, rather than use.

Vanity metrics

Another issue is the overuse of vanity metrics. These are numbers that look good in presentations but offer little value when it comes to actual decision-making. Metrics like total followers, page views, or number of purchases might show activity, but they do not necessarily reflect progress toward strategic goals. In some cases, they can even be misleading, creating a false sense of security or success.

The danger with vanity metrics is that they divert attention from what truly matters. If your organisation spends time discussing an increase in likes or traffic without linking it to customer acquisition, retention, or revenue, then the metric is not doing its job.

Legacy KPIs

Even well-intentioned metrics can fall short if they are not clearly defined or regularly reviewed. Too often, KPIs become legacy indicators, i.e. numbers that were once useful, but no longer reflect the organisation’s current direction or priorities.

Legacy KPIs often survive out of habit. They were created in response to a past initiative, a reporting requirement, or a now-outdated business model. Over time, the organisation evolves, but the indicators stay the same. Teams continue to track them, even if no one remembers exactly why they were chosen or what decisions they are supposed to support.

The danger with legacy KPIs is that they consume attention without delivering insight. They can crowd dashboards, distract teams, and create a false sense of measurement. Worse, they may actively mislead by suggesting success or failure in areas that are no longer strategically relevant.

Without regular review and pruning, KPIs can become historical artefacts. They are still present, still measured, but disconnected from the real questions the organisation needs to answer.

Three principles of a good KPI

Designing a good KPI is, in theory, not that hard. The key thing is to stay focused on your current goals and make sure that the KPIs are actionable. And last but not least, make sure you have the organisation’s buy-in.

1. The KPI is tied to a clear goal

Every KPI should exist for a reason. That reason must be tied to a concrete business objective. When you start by asking, “What are we trying to achieve?” the path to identifying the right metric becomes clearer.

For instance, if your goal is to improve customer retention, a relevant KPI might track repeat purchase rates, churn, or Net Promoter Score (NPS). On the other hand, if you are focused on operational efficiency, you might look at average handling time, error rates, or throughput per employee.

The key is alignment. A KPI should reflect movement toward something meaningful. It should not be chosen just because the data is easy to collect or because the metric is commonly used in your industry. What matters is its relevance to your strategy and its ability to inform your next move.

In our KPI Workshops, we work closely with leadership teams to define strategic goals, explore how they manifest in daily operations, and identify the indicators that best represent meaningful progress.

2. The KPI supports action

A good KPI does not just summarise what happened last month. It should be timely enough to influence what happens next.

The best KPIs function as triggers. They prompt questions, drive investigation, and support course correction. If a KPI dips below a certain threshold, your team should know why, and more importantly, know what to do about it.

For example, if you monitor sales conversion rates weekly and notice a steady decline over three weeks, you can respond while there is still time to recover the quarter. On the other hand, if you only review conversions at the end of the quarter, you are left diagnosing a missed target after the fact.

KPIs should empower your teams to ask better questions. What changed? Why now? What else is affected? When KPIs trigger discussion and follow-up, they are doing their job.

In our KPI Health Check, we assess not only whether your indicators are accurate, but also whether they are timely, relevant, and actionable. We often find that with slight adjustments to timing, thresholds, or presentation, a stagnant KPI can become a vital tool.

3. The KPI is understood and used

The most sophisticated dashboard in the world will not help you if no one knows how to read it. A KPI only adds value if the people using it understand what it means, where it comes from, and how to interpret what it’s telling them.

Clear definitions are essential. Everyone should agree on what the metric is measuring, how it is calculated, and where the data comes from. Disagreements or confusion about definitions can lead to misinterpretation and poor decisions. But even with clear documentation, KPIs fall flat if the people using them don’t understand the underlying metrics or statistical concepts.

If a team doesn’t understand how a percentage is calculated, what a baseline represents, or what kind of variation is normal, they are far less likely to take meaningful action based on that information. Without basic data literacy, KPIs risk being misunderstood, misused, or ignored entirely. Ensuring that key people, not just analysts, are comfortable with the numbers behind the indicators is a vital part of becoming truly data-driven.

And beyond technical clarity, KPIs also need cultural relevance. Are your indicators part of the everyday language of your team? Do they show up in regular meetings, strategy discussions, and performance reviews? Or do they live in isolated reports, rarely opened and barely understood?

Building a culture where data is trusted and used starts with making it understandable. When people not only see the numbers but grasp what they mean, they can connect them to their own work, make better decisions, and contribute to shared goals with confidence.

In our ongoing KPI support, we help teams embed metrics into their daily routines. This might include building dashboard templates that highlight only the most critical indicators, documenting calculation methods for transparency, or supporting internal communication and rollout. When KPIs are understood and actively used, they become part of how an organisation thinks.

Sidubara also provides training in data literacy and business statistics if you feel that your organisation would benefit from updating their knowledge. It is often easier to ask an external trainer the “stupid questions” than asking a colleague. We understand that and don’t frown upon even the most basic questions. 

How to get started

If you are not confident that your current KPIs are helping, start by stepping back and reviewing your strategy. What are your most important goals right now? Are your KPIs clearly linked to those priorities?

Next, review your existing metrics. For each one, ask: What is this telling us? Who uses this data? What decisions does it inform? If the answers are unclear or inconsistent, that is a sign the KPI needs attention.

Finally, reduce complexity. It is better to focus on a handful of high-quality KPIs than to be overwhelmed by a wall of charts. Five well-chosen indicators can provide more value than twenty weak ones.

Not sure where to begin? That is where we come in. Our KPI Health Check is a structured, lightweight assessment designed to identify gaps, clarify definitions, and recommend practical next steps. If your team is starting from scratch, our KPI Workshops offer a collaborative way to build strong indicators from the ground up. We are also happy help you with the culture of KPIs, to make sure that they are accepted and understood throughout the organisation. 

In summary

KPIs are not just metrics—they are tools for leadership.

Good KPIs help you focus on what matters, react in time, and move with confidence. They are not just for tracking the past, but for reacting to what is happening right now and thus shaping the future.

To get the most from your metrics, start by aligning them with your goals. Make sure they are actionable. Ensure they are understood by the people who need them. And if you are not sure where to start, we are here to help.

At Sidubara, we work with organisations to turn data into direction. Explore our KPI services or get in touch to learn more.