How do you design KPI for teams or organization?

Personally I think KPIs (particularly when you are asking the question "how do I adopt KPIs") are toxic.

In a non-startup company there is generally one bottleneck that holds the organization back and has to be controlled

https://www.amazon.com/Goal-Process-Ongoing-Improvement/dp/0...

In a startup company or if you are trying to develop a "revolutionary" product there are usual several bottlenecks that need to be attacked. For instance going to the moon you have to solve problems from a list such as

  * propulsion
  * navigation
  * life support

if you are looking at a 10% improvement you need to find the one bottleneck (e.g. "The Goal") if you need to get a 10x improvement you will hit several bottlenecks on the way there and the writings of W.L. Livingston apply

https://www.amazon.com/Have-Fun-at-Work-Livingston/dp/093706...

When you use goals to "destroy the competition" or "change the world", goals are a powerful technique. If you are setting goals because somebody told you to set goals or somebody else sets goals you are going to drive yourself to distraction.

https://www.ycombinator.com/library/6j-how-to-set-kpis-and-g...

https://www.youtube.com/watch?v=lL6GdUHIBsM

Make sure you need to create real KPIs, or if you are just feeding the bureaucracy.

If it’s a matter of feeding the paperwork monster, focus on easy to collect metrics that don’t change, and spend some time cooking up persuasive bullshit re:why it matters.