Written by

Bernard Marr

Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity. He is a best-selling author of 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations. He has over 2 million social media followers, 1 million newsletter subscribers and was ranked by LinkedIn as one of the top 5 business influencers in the world and the No 1 influencer in the UK.

Bernard’s latest book is ‘Business Trends in Practice: The 25+ Trends That Are Redefining Organisations’

View Latest Book

Follow Me

Bernard Marr ist ein weltbekannter Futurist, Influencer und Vordenker in den Bereichen Wirtschaft und Technologie mit einer Leidenschaft für den Einsatz von Technologie zum Wohle der Menschheit. Er ist Bestsellerautor von 20 Büchern, schreibt eine regelmäßige Kolumne für Forbes und berät und coacht viele der weltweit bekanntesten Organisationen. Er hat über 2 Millionen Social-Media-Follower, 1 Million Newsletter-Abonnenten und wurde von LinkedIn als einer der Top-5-Business-Influencer der Welt und von Xing als Top Mind 2021 ausgezeichnet.

Bernards neueste Bücher sind ‘Künstliche Intelligenz im Unternehmen: Innovative Anwendungen in 50 Erfolgreichen Unternehmen’

View Latest Book

Follow Me

The Difference Between a KPI and KRI

2 July 2021

Even though many organisations use the terms Key Performance Indicators (KPIs) and Key Risk Indicators (KRIs) interchangeably, they actually are two different tools with different purposes. Let’s take a look at what they are and how they are different.


Key Performance Indicators (KPI)

Key Performance Indicators (KPIs) are the gauges and measurements an organisation uses to understand how well individuals, business units, projects and companies are performing against their strategic goals.

Once an organisation has identified its strategic goals, KPIs serve as monitoring and decision-making tools that help answer your organisation’s key performance questions.

For more information on KPIs you can:

Key Risk Indicators (KRI)

Key Risk Indicators (KRIs), as the name suggests, measure risk. KRIs are used by organisations to determine how much risk they are exposed to or how risky a particular venture or activity is.

KRIs are a way to quantify and monitor the biggest risks an organisation (or activity) is exposed to. By measuring the risks and their potential impact on business performance, organisations are able to create early warning systems that allow them to monitor, manage and mitigate key risks.

Effective KRIs help to:

  • Identify the biggest risks.
  • Quantify those risks and their impact.
  • Put risks into perspective by providing comparisons and benchmarks.
  • Enable regular risk reporting and risk monitoring.
  • Alert key people in advance of risks unfolding.
  • Help people to manage and mitigate risks.

The relationship between KPIs and KRIs

While KPIs help organisations understand how well they are doing in relation to their strategic plans, KRIs help them understand the risks involved and the likelihood of not delivering good outcomes in the future. This means KRIs can be the flipside or KPIs.

Here are three examples that illustrate this relationship:

  1. A company might establish a KPI to measure IT system performance and a complementary KRI to track IT vulnerability to cyberattacks.
  2. Perhaps a company creates a KPI to monitor its market share growth because that’s a key business objective. A KRI linked to the same goal could monitor the risks of losing market share due to customer shifts or new competition.
  3. A company might measure staff engagement or staff satisfaction as important KPIs and monitor the likelihood of losing key staff and the risks to their employer brand as KRIs.

So, in a nutshell:

KPIs and KRIs are not the same. KRIs help to quantify risks, while KPIs help to measure business performance.

Where to go from here:

How Do You Develop Key Risk Indicators (KRIs)? And How Do They Differ From KPIs?

What Is A Leading And A Lagging Indicator? And Why You Need To Understand The Difference


Business Trends In Practice | Bernard Marr
Business Trends In Practice | Bernard Marr

Related Articles

The Future Of Work: 4-Day Week And Pioneering Ideas At Virgin Money

Work has changed immeasurably over the decades that I have been in the workforce, and I am sure that 20 years from now, it will be unrecognizable from how it is today.[...]

Why Every Business Must Become A Purposeful Business

A purpose that your customers (and employees) can genuinely connect with? If not, you’re ignoring a major trend in the business world.[...]

How To Become A More Sustainable And Resilient Company

Indeed, two out of three consumers can now be categorized as “belief-driven buyers,” and more than two-thirds expect brands to care about environmental issues.[...]

How To Become A Successful Video Content Creator – Insights From KallmeKris

The development of new technology means some jobs that were common in past times no longer exist – think of lamplighters, elevator operators, and telephone switchboard operators.[...]

The 7 Biggest Performance Review Mistakes You Must Avoid

Performance reviews can be really productive or really poor. Learn how to drive high performance by avoiding these 7 review mistakes. [...]

Why Every Brand Should Be Going Direct-To-Consumer (DTC)

The direct-to-consumer (DTC) trend, also known as disintermediation, essentially means bypassing traditional intermediaries in the supply chain.[...]

Stay up-to-date

  • Get updates straight to your inbox
  • Join my 1 million newsletter subscribers
  • Never miss any new content

Social Media

0
Followers
0
Followers
0
Followers
0
Subscribers
0
Followers
0
Subscribers
0
Yearly Views
0
Readers

Podcasts

View Podcasts