Key Failure Indicator (KFI)

Image Credit:


Pairing your Key Performance Indicators (KPIs) with metrics you don’t want to see go in a certain direction, to ensure you’re focused on healthy growth. How it’s useful Teams often choose KPIs that directly reflect the positive outcomes they’re looking for, without considering the negative ways that those outcomes could be achieved. Once they start optimizing for those KPIs, they actually create output that is net bad for the company. A classic example is a team thinking they’re successful when doubling sign-up conversion on the landing page, only to observe (far too late) that the number of total customers isn’t growing because the conversion rate dropped by 60% due to the same change. KFIs keep your team’s performance in check, and make sure that you only create net-healthy outputs for the company. Examples of popular KPI <> KFI pairings are: -Grow revenue while maintaining gross margin -Grow adoption of feature A without taking away adoption of feature B -Grow adoption of feature A without increasing support load. —Brandon Chu

Read More