KPIs Need Context

KPIs on their own have very little meaning. Context gives meaning.

I attended a board meeting recently. When we came to review the main numbers (revenues, sales, marketing expenses etc) all I really wanted to know was "why". On this occasion we were not provided with any commentary in the board pack, just the numbers.

Numbers by themselves have limited meaning...

Do we know why did we do better than expected on sales? (If so, let's design to do more of that).
Do we know why the marketing efficiency decreased? (Were others bidding higher than usual, was there a conversion issue... Etc. Let's
figure this out to avoid repeating).
Do we know why the support load increased? (Was something broken on the site, do we have a supplier issue, was it because we did more bookings? Therefore - is increase in support issues a good thing or not? - relative to the other metrics).

Numbers are headlines. You need a story to make sense of a headline.

Other numbers can provide part of the story. For example, when looking at marketing efficiency (ROI), you would also look at click through rate, cost per click, conversion rate and so on. These numbers provide context - to a certain point - if you know what you're looking at.

Think of KPIs like a pyramid. At the top is the most important number. Under that are the most important numbers that affect the most important number. Under each if these are the numbers that in turn influence the secondary numbers.

Despite having well structured numbers, we still need commentary (in words) to get the full picture.

This type of information is invaluable and provides meaning;

positive: our promotion with partner A exceeded all expectations and improved sales by x% (we had forecast y%)
negative: the site had a partial outage for 18 hours on dd/mm due to an unforeseen problem with our content delivery network. This reduced conversion by x% for the week. We have taken precautions to avoid this scenario in future.

Ultimately, the CEO needs to have and communicate a view of the business demonstrating a good understanding of any influences on performance.

This needs words and numbers, not just numbers.