How to create a good indicator?
A good indicator is a simple and reliable means of reflecting the status of what you are measuring. There are different evaluation methods that guide the creation of effective indicators. The SMART model is widely accepted as a frame of reference to create indicators.
Reference: Social & Human Capital Protocol
Things to consider
Data collection and metrics must be practical and affordable for the team in charge of field work.
Indicators should also be formulated to measure negative results, understood as those involving unwanted changes.
The different defining elements of an indicator (description, tools, use or methodology for calculations, etc.) must be documented in order to create a transparent process.
Indicators should be useful for accountability and also to share the process by encouraging learning among evaluated initiatives.