Comparing OKRs vs. KPIs is an apples and oranges discussion.
An acronym for key performance indicator, KPIs are used to evaluate performance over time for an organization, individual, program, project, action, etc. While you may have some outliers, these indicators should usually:
We highly recommend you make your KPIs measurable. Adding quantitative value makes it easier to provide context and compare performance for whatever you’re measuring. Creating qualitative KPIs is possible, but not advisable because this structure can lead to confusion and subjective interpretations of data.
There are near unlimited examples of KPIs across all industries. A KPI could truly be any quantitative (and in rare cases, qualitative) measure a company uses to evaluate its progress and successfully reach its goals. It’s important to note that, unless you have a very small company, your KPIs can and should be broken down by department (and by industry if you are a conglomerate).Here are some common KPI examples for a variety of industries and divisions:
OKR is the acronym for objective and key results—more specifically, an objective is tied to key results. OKR is a strategic framework, whereas KPIs are measurements that exist within a framework.
OKR is a simplistic, black-and-white approach that uses specific metrics to track the achievement of a goal. Typically, an organization will have three to five high-level objectives and three to five key results per objective. Key results are numerically graded to obtain a clear performance evaluation for the objective. OKRs are:
The OKR framework was popularized by Google and Intel, but it has also been used by Amazon, LinkedIn, Spotify, and other hugely successful companies for goal management. Generally speaking about OKRs vs. KPIs, the former are a good fit for organizations heavily focused on growth. Not to create confusion, but sometimes an organization’s KPIs are the same as the key results used in an OKR framework. Keep reading and this will become clearer.
OKRs are built on big-picture goals and targets that are designed to push employees and companies forward, so they should toe the line of “almost impossible.” The OKR framework is a continual cycle of fast, dynamic growth.
Some general OKR examples include:
• Key Result #1: Record $100 million in revenue.
• Key Result #2: Increase staff by 45 percent.
• Key Result #3: Increase market cap sufficiently to enter S&P 500.
• Key Result #1: Hire 10 artificial intelligence subject matter experts.
• Key Result #2: Invest an additional $500 million in research and development.
• Key Result #3: Roll out prototype by fiscal year-end.
• Key Result #1: Acquire 50 new customers.
• Key Result #2: Increase marketing leads by 20 percent.
• Key Result #3: Increase customer retention to 85 percent.
ClearPoint Strategy has been named a top OKR software in 2023 by the International Business Times!
When it comes to KPIs, do:
Can’t decide if the KPIs you’re considering will be effective? Use the seven questions in this article for guidance.
We also recommend that you don’t:
When it comes to OKRs, we recommend you do:
We also recommend you don’t:
When comparing OKRs vs. KPIs, we’ve used some clear-cut examples. In the real world, you will have some gray areas—a twist in nomenclature can turn a key result into a KPI (or vice versa). In the first OKR example above, a key result was to “Increase staff by 45 percent.” Counting the number of employees could also be a KPI. The OKR framework is simplistic and based on tracking data, and a KPI is usually a single data point, so you will find cases where there’s overlap.
If your key results and key performance indicators start to sound similar, that’s ok. Just remember that one’s an outcome and the other a measurement—overlap the wording but not the usage of each.
Now that you know the difference between these two concepts, you can choose the right approach for goal achievement in your organization. Whatever framework you decide on, ClearPoint can help you drive it all with our comprehensive system for strategy management.
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