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5 Performance Indexes You Use Without Realising

Performance indexes are a hugely powerful method of condensing multiple metrics into a single KPI. You see use them every day and probably don't even think of them as indexes. Because of this, there's a good chance you've never considered designing your own, so you may be missing out on the benefits they can bring.

I will highlight five very common performance indexes to show how pervasive and useful they can be.

If this post fires you up to create your own powerful composite measures, don't forget to check out our 90-minute training course and Excel toolkit.

Apple watch activity scores

What the Apple activity score shows

The Apple Watch Activity Score is a performance index that measures how active you are. Although the concept is simple, it can be tough to summarise. We make thousands of movements each day. We stand, sit, run and move around, causing rises and falls in our heart rate. Summarising our activity manually has the potential to be unbelievably tedious. The Apple algorithm takes hundreds of thousands of data points and creates a simple three-metric overview, showing a score for...

  • Exercise - our higher intensity activity, presented as a single score. Here's how Apple describes it: The exercise ring on the Apple Watch (part of the Activity app) requires activity above a "brisk walk" - with a sustained increase in heart rate for at least 1 minute - to earn points. Every full minute of movement that equals or exceeds the intensity of a brisk walk will count towards your daily Exercise and Move goals.
  • Movement - our lower intensity activity scored alongside a calculated calorie consumption
  • Stand - the hours in the day where we have stood up at least once shown versus our total waking hours

Apple also uses tailored, adaptive, targets to keep the user motivated or engaged (or at least that is the theory).

How the Apple activity score is calculated

It seems to be a secret! There is general advice on what 'counts' towards the scores, but no details of how it is calculated. It's a proprietary algorithm, so I don't expect to see this in use in any non-Apple products at any point in the future.

Stock market performance chart

S&P 500

What the S&P 500 tells us

The S&P 500 Index is a stock market indicator that tracks the performance of major U.S. firms. The S&P 500's primary goal, like all stock market indices, is to give an overview of the performance of the stock market (and U.S. economy). It includes data from roughly 80% of the market capitalization of all U.S. stocks and reflects activity from approximately 500 leading companies in the United States.

How the S&P 500 is calculated

The value of the S&P 500 Index is derived using a free-float market capitalization-weighted method.

  1. The first step in the calculation is to determine the market capitalization of each component in the index, which is known as the free-float market capitalization. The free-float market cap is the aggregate value of all shares of a currently available on the market (price x number)
  2. Next, the market capitalisations for each of the companies in the index are summed.
  3. Finally, that sum is divided by the 'Divisor' (currently around 8.3 billion), which is a number that is adjusted to keep the value of the index stable despite corporate actions that affect market capitalisation. When a company leaves the S&P500 and is replaced by another with a different market capitalization, the divisor is adjusted so that the value of the S&P 500 index remains consistent.

Learn how to build your own Index KPIs with Excel

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Exam grades

Another very common type of performance index that you almost certainly don't think of as a performance index, is an exam grade. Exam grades whilst not perfect, help society function by avoiding the need for detailed, expert, probing every time we need to establish a person's expertise in a given subject, perhaps during a recruitment process. Grades give a quick and simple summary of a person's knowledge of a given field.

What the exam grades tell us

Exam grades offer a simple assessment of a student's understanding of a body of knowledge. Years of professional education and training can be distilled down to a single number or letter, in the form of a degree grade.

How the exam grades are calculated

There is no single method, as it varies by country and educational level. The basic principle is simple and so commonly used that we usually don't give it a second thought.

  1. Students are assessed through an exam or practical exercise
  2. Those scores are then aggregated into a single result
  3. That aggregate score is then mapped onto a 'result'. For example 'Upper Second Class degree', if you are in the UK, or 'GPA' if you are in the US (which also includes a divisor based on 'credit hours').

vehicle eco score displayDriving Eco score

If you drive a hybrid vehicle, there's a very good chance it will display an 'Eco' score, to show you how efficient your driving is.

What the Driving Eco Score tells us

The Driving Eco score is a measure of how efficiently you are driving your hybrid car. It takes into account factors such as braking, accelerating, and speed, to give you a score between 0 and 100. The higher the score, the more efficient your driving is.

How the Driving Eco Score is calculated

Like the Apple Activity Score, this is usually a proprietary algorithm (calculation), so there's no standard to allow comparison between vehicles produced by different manufacturers. Like the Apple Activity Score, the Eco score is entirely designed to 'gamify' the process of driving economically. The simple, at-a-glance, nature of the score is crucial in developing user engagement. Here's a great example of where this gamification worked.

woman weighting kitten on scales

Weight Watcher points

What Weight Watcher points tell us

Weight Watcher points offer a simplified system for the complex business of balancing measuring nutritional value, energy intake, exercise, and personal metabolic requirements. The WW approach recognises that weight management is not just about calories, but should also factor in nutritional value and energy expenditure.

How Weight Watcher points are calculated

They have evolved how the points work. Historically WW points were calculated as...

p=(c/50) + (f/12) - (min{r,4}/5)

min{r, 4} equals the number of grams of dietary fiber or 4, whichever is smaller. So only the first 4 grams of fiber 'count', above that the value is capped at 4.

  • p = Points
  • c = Calories
  • f = Fat Grams
  • r = Dietary fiber Grams

Whilst the formula is in the public domain, it is patented.

At the end of 2015, a new points system, Beyond the Scale, was established by the company. The program assigns food types points based on their nutritional values, providing members a set number of Smart Points each day (and week).

The new 'Smart points' are based on calories, sugar, saturated fat, and protein, but certain foods, such as fresh fruit, flagged as 'zero-point' foods. The nutrients from fruits and vegetables are only factored in if they are mixed with other food.

Here is how it is calculated...

(Calories * .0305) + (Sat Fat * .275) + (Sugar * .12) - (Protein * .098)

What could a performance index do for your business?

I'm hoping you will start to notice how often index KPIs pop up in unexpected places and how useful they can be. It's over to you now, to build your performance index. If you are looking for a structured method and toolkit to help you do this, check out our 90-minute training course and Excel toolkit.

Don't forget to get in touch if you need a hand.

More commonly used index KPIs...

OEE: an efficiency measure.

Yield: a material conversion metric for manufacturers.

Learn how to build your own Index KPIs with Excel

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