KEY PERFORMANCE INDICATOR (KPI) SYSTEM

November 10, 20252 min read

What Gets Measured Gets Managed. And What Gets Managed Improves. The KPI System That Turns Guesswork Into Leadership.

Most business owners run their business by feel.

They can tell when a month “feels busy.”
They know when clients “seem happy.”
They sense when the team “seems productive.”
They guess at whether growth is happening.

But intuition — while valuable — is not management.

Professional leadership requires data.

A KPI System is not about tracking every number.
It is about identifying the few numbers that indicate:

  • The health of the business

  • The direction of momentum

  • The success of the team

  • The strength of capacity

  • The predictability of revenue

Because a business is not managed by opinion.
It is managed by evidence.


The Three Categories of KPIs

1. Leading Indicators (Predict the future)

Examples:

  • Number of new inquiries per week

  • Number of conversations booked

  • Proposal-to-call ratio
    These indicators tell you where revenue is likely heading.

2. In-Progress Indicators (Show efficiency)

Examples:

  • On-time delivery rate

  • Customer wait time

  • Project cycle time
    These indicators show whether the business is operating smoothly.

3. Lagging Indicators (Report results already happened)

Examples:

  • Monthly Revenue

  • Gross Profit Margin

  • Net Profit
    These indicators tell you what has happened — but they cannot change it.

Most small businesses only track lagging indicators — so they react when it’s too late.

A mature business tracks all three.


Your KPI System Must Be Visible and Reviewed Weekly

A KPI dashboard is useless if it is:

  • Hidden in a spreadsheet

  • Updated inconsistently

  • Not discussed with the team

  • Not tied to performance expectations

KPIs only matter when they change behavior.

The KPI meeting is where leadership truly happens:

  • Celebrate progress

  • Identify constraints

  • Make adjustments

  • Assign action to next steps

This is where the business relentlessly improves.


Your Coaching Assignment

Choose 5 KPIs total:

  • 2 Leading

  • 2 In-Progress

  • 1 Lagging

Review them every week — no exceptions.

This rhythm alone can transform your operational maturity.

Eric Dombach is an investor, entrepreneur, senior executive, and consultant to PE firms and family offices. He has founded two professional service firms that achieved 7-figure exits. As the leader of a business consulting firm and a network of more than 6,300 business consultants, Eric is dedicated to developing leaders, building dream teams, and growing SMBs. He is also a published author, known for his Amazon best-seller, "The Million Dollar Business Coaching Firm." Eric has an MBA from the University of the People and a B.S. in Engineering from Messiah University. He has been married to Deborah since 1993, and they have four adult children. He enjoys reading, world travel, and playing jazz-fusion guitar.

Eric Dombach

Eric Dombach is an investor, entrepreneur, senior executive, and consultant to PE firms and family offices. He has founded two professional service firms that achieved 7-figure exits. As the leader of a business consulting firm and a network of more than 6,300 business consultants, Eric is dedicated to developing leaders, building dream teams, and growing SMBs. He is also a published author, known for his Amazon best-seller, "The Million Dollar Business Coaching Firm." Eric has an MBA from the University of the People and a B.S. in Engineering from Messiah University. He has been married to Deborah since 1993, and they have four adult children. He enjoys reading, world travel, and playing jazz-fusion guitar.

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