The KPI hierarchy: why result KPIs and driver KPIs make the difference

Everyone talks about KPIs. Almost no one really has them. For most companies, a KPI is a number you look up once a quarter, or a dashboard full of figures that nobody actually steers by. The result: you only find out something went wrong once it has already gone wrong. This piece explains the hierarchy that does work, from business process to result KPI to driver KPI.

The problem with most KPIs

The classic problem is that people measure what they cannot steer. "We have too few customers" is an observation, not a KPI to steer by. Because what should your team do differently tomorrow to improve that number? It gives no answer to that.

A KPI that tells you after the fact that something went wrong is a report card. A KPI you use to steer in advance is a rudder. The difference lies in the hierarchy beneath it.

The hierarchy: process, result, driver

You build good KPIs in three layers.

First, your business processes. Before you can measure anything, you have to know which processes run your company: marketing, sales, onboarding, delivery, support. Make those explicit.

Then the result KPIs. For each process you determine when things are going well. For marketing that could be the number of qualified leads, for sales the deals won, for support customer satisfaction. These are the outcomes.

And then the driver KPIs. This is the layer most companies skip, and it is precisely the most important one. Driver KPIs are the behavior and the effort that push the results up. They are predictive, and you have them in your own hands.

An example

Take a performance marketer. He owns the marketing process. His result KPI is the number of qualified leads. But he cannot turn that dial directly. What he does control are the driver KPIs: how many ads are live, how much content has been posted, how many variants he has tested, how much the cost per lead has dropped compared to last week.

If those driver KPIs are in order, the result follows automatically. And if the leads disappoint, you can see right away in the driver KPIs where it is coming from. That is how you steer forward instead of noting things after the fact.

Think like elite sports

Compare it to a sprinter. His result KPI is his time in the hundred meters. But a coach does not look only at that final time. He also measures sleep, strength, resting heart rate and recovery, all the predictive signals that determine whether the effort is enough for a fast race. Those are the driver KPIs. That is how you build performance, and that is how you also build a high-performance culture in a company.

From my own practice: I see it time and again that companies do have a result figure but no idea which behavior drives that figure. Then there is a target, but no one knows what to do on Monday to hit it. Only once every employee is connected to both result and driver KPIs does he automatically end up on green, orange or red, and can you actually steer.

Not everyone carries a result KPI

An important nuance: not everyone owns a process. Sometimes a role has no direct result KPI because the outcome lies outside their influence. In that case you steer by the driver KPIs and by clear expectations. The goal is not to give everyone an arbitrary number, but to make everyone measurable and visible on what they can actually influence.

Do your KPIs steer, or report?

Whether you can correct course ahead of time or only observe afterwards shows in the hierarchy beneath your numbers. That's what the audit looks at. Take the audit.

Frequently asked questions

What is the difference between a result KPI and a driver KPI?

A result KPI measures the outcome of a process (for example the number of leads). A driver KPI measures the behavior that drives that outcome and that you have in your own hands (for example the amount of content posted or ads tested). Driver KPIs are predictive.

Why do standalone KPIs often not work?

Because they measure what you cannot steer. A number like "too few customers" does not tell you what your team should do differently tomorrow. Without the driver KPIs beneath it, you cannot steer forward.

How many KPIs does someone need?

Keep it simple. One process, one or a few result KPIs, and the driver KPIs you can actually influence. Better few and clear than a dashboard full of numbers that no one steers by.