One of the big problems with key performance indicators (KPIs) is that they tend to explode; organizations may start out with a handful, but before long they often find themselves trying to manage several dozen, few of which are well defined or clearly distinguished from the others. In his new book Key Performance Indicators: Developing, Implementing, and Using Winning KPIs (2nd Edition: John Wiley & Sons, Inc, 2010), David Parmenter tackles the problem head on. He offers a practical framework for identifying your organization’s most useful KPIs and distinguishing them from related metrics such as results indicators, as well as a 12-step model for developing and using KPIs.

So just how many of these critical indicators do you need?

Probably no more than 10, though some organizations may want to go as high as 20 (at the risk of some loss of focus), says Parmenter. Any more than that, and you’re probably not talking about KPIs at all, but about one of the other species of measures in Parmenter’s taxonomy.

This is far from being a theoretical treatise, though; the material is highly action-focused, with an abundance of checksheets, workshop outlines, resource kits, case-study examples, and templates to help you steer your KPI project to a successful roll-out. Readers who work for small-to-medium businesses or nonprofits will appreciate a chapter that helps them to tweak Parmenter’s 12-step process to fit their particular needs. There’s even an actual list, 22 pages long, of performance measures that might be useful for your organization.

All in all, this is a must-read for anyone involved in a KPI project or any enterprisewide performance management initiative. More information is available here.