The KPI Conundrum

The KPI Conundrum

Why Getting It Right Matters for Boards and CEOs

In the Not-for-Profit (NFP) sector, KPIs are more than just numbers, they are a critical compass for purpose, performance, and impact. But identifying the right KPIs for Boards and CEOs to monitor annually can be surprisingly complex.

Below, we explore five common challenges, how to overcome them, and include some reflective questions to help you assess your current approach.

1. Aligning KPIs with Purpose, Not Just Performance

The Challenge
Traditional metrics often miss the mark when it comes to mission-driven work. Many KPIs focus on outputs, not outcomes, which rarely reflect the organisation’s deeper purpose.

Tip
Use a measure that includes mission-aligned indicators like stakeholder engagement, cultural health or social impact.

Reflective Questions:

• Do our current KPIs reflect our mission and values?
• Are we measuring what matters most to our community and stakeholders?
• What impact indicators are we overlooking?

2. Avoiding KPI Overload

The Challenge
Too many KPIs can dilute focus, overwhelm leadership, and lead to reporting fatigue. Some KPIs are tracked simply because they’re easy to measure and realistically not because they’re meaningful.

Tip
Focus on a small set of high-impact KPIs that reflect your strategic priorities and are easy to report and act on.

Reflective Questions:

• How many KPIs are we currently tracking at board level?
• Which ones truly influence strategic decisions?
• Could we streamline or retire any KPIs?

3. Measuring the Intangibles

The Challenge
Culture, leadership, and collaboration are vital but too often considered too hard to quantify. As a result, they’re frequently either under-measured or ignored.

Tip
Use bespoke tools like Enterprise Care’s Organisational Health Diagnostics to turn these intangibles into measurable insights.

Reflective Questions:

• Are we capturing the health of our culture and leadership?
• What tools or feedback mechanisms do we use to assess these areas?
• How do we know if collaboration is improving or declining?

4. Ensuring Shared Understanding

The Challenge
KPIs lose value if they’re not clearly understood or embraced by the Board as a whole, CEO and executive team. Misalignment can lead to confusion or conflicting priorities.

Tip
Co-design KPIs through collaborative workshops to ensure alignment, clarity, and shared ownership.

Reflective Questions:

• Do our Board, CEO and executive team interpret KPIs the same way?
• Have we co-created our KPIs or were they handed down and accepted by exhaustion?
• How often do we revisit and recalibrate our KPI framework?

5. Adapting to Change

The Challenge
Static KPIs can quickly become outdated in a fast-moving environment. What worked last year may no longer be relevant today. Be prepared to change to maintain relevance and meaning.

Tip
Build in annual KPI reviews and use real-time data where possible to stay responsive and relevant.

Reflective Questions:

• When was the last time we reviewed our KPIs?
• Are our KPIs helping us stay agile and forward-looking?
• What emerging trends or risks should we be tracking?

Final Thought

The right KPIs don’t just track performance; they are the core shapers of an organisation’s future. For NFP Boards and CEOs, the goal is to create a collection of KPIs that holistically reflects the organisation’s purpose, people, and potential.

DISCLAIMER: This article is general only in nature and is not advice.