OKR vs. KPI

Fear, anxiety, stress. These aren’t the emotions you want when discussing performance and goals at work. The key to a successful project isn’t more pressure—it’s the right frameworks, and few are as functional as KPI and OKR.

These two handy acronyms are frequently confused and conflated, but I’ve learned there’s quite a difference between KPI and OKR. OKRs (Objectives and Key Results) require you to identify your target and the metrics to help you stay on track. KPIs (Key Performance Indicators) are focused only on tracking your progress.

This is just the surface, however. Today, I want to get an in-depth look at KPI vs OKR to help you understand how an OKR and KPI comparison can expand your project toolset and benefit you in the long term.

Why use an OKR or KPI?

Throughout the years I’ve encountered firsthand the pitfalls of poorly defined goals. One of the early challenges in my career was grappling with ambiguous targets. I remember a project where we set a vague goal to “boost productivity,” only to discover that without concrete key results, progress was nearly impossible to measure.

Conversely, when I’ve used OKRs and KPIs effectively, I’ve seen projects turn around almost overnight. Take the example of a demand generation agency I once managed. Their issues ranged from an unclear workload distribution to a task backlog of over 700 hours. By introducing targeted KPIs, we were able to streamline processes and monitor progress in real time. 

This isn't just my experience, a Project Management Institute report found that organizations with mature performance measurement practices (including effective use of KPIs) are 2.5 times more likely to complete projects successfully.

Integrating these insights into your performance management strategy not only boosts productivity but also increases transparency and motivation across teams.

What is an OKR?

Objectives and key results (OKRs) are a goal-setting framework that pairs ambitious objectives with measurable key results. OKRs are designed to stretch your team’s capabilities, setting aggressive yet attainable targets. They often operate on a quarterly or annual basis and have gained prominence through companies like Intel and Google. 

As a rule of thumb, when setting OKRs, fill in the following sentence:

“I will [objective], as measured by [key result].”

Objectives are any goal you want to achieve, whether they’re easily attainable or far-reaching, key results are the measurable ways you plan to achieve that goal. You can have more than one key result for each objective, and, unlike with KPI, they don’t need to be quantitative. 

OKR example

OKRs are set at the company, team, and individual levels. For example, a company OKR might be:

Objective: Become the #1 most-downloaded iOS productivity app.

Key Results:

• Survey to identify the 10 most-requested features and launch five by December 15.
• Perform 10 user tests to pinpoint UX issues.
• Achieve at least a 50% improvement in UX satisfaction.
• Earn 200 five-star ratings by December 31.

What is a KPI?

Key performance indicators (KPIs), on the other hand, are performance metrics that measure the success of your organization, project, or initiative. Think of them as real-time signals that indicate whether your efforts are on track. 

KPI frameworks are pretty flexible and can range from monitoring the progress of a social media campaign to an IT project development. However, this also means that the metrics you choose for each KPI should be unique to the goal you’re working towards, make sure you’re researching relevant, realistic metrics for every initiative you take.

When creating a KPI you’ll want to know what your goal is, why you want to get there, how you plan to achieve it, who will lead the project and when it will be reviewed. 

With this in mind, try to create objectives that: 

• Tie to your strategic goals
• Can be measured against benchmarks
• Inform resource planning
• Track something you can control and influence

KPI example

Let’s take a look at an example. For instance, a product management KPI might be:

• What: Increase MQLs by 30% this year.
• Why: Boosting MQLs can pave the way to profitability.
• How: Through hiring additional sales staff, refining marketing strategies, adopting new tools, and producing quality content.
• Who: The VP of Marketing takes charge.
• When: Reviewed quarterly.

What are the differences between OKRs and KPIs?

When comparing OKRs and KPIs many people will point out that they’re very similar, even interchangeable, but the truth is they can be quite different. In my own experience, this misunderstanding often lies in expecting OKRs to be as granular as KPIs. Instead, OKRs should inspire and direct, while KPIs provide the data needed to measure that progress.

Let’s break it down in simpler terms:

• OKRs provide a roadmap for achieving bold goals by defining both the destination (the objective) and the journey (the key results). They are ideal for transformation projects and ambitious initiatives.
  
  
• KPIs focus on tracking ongoing efforts rather than setting ambitious goals. They are essential for measuring day-to-day progress. They’re best used for monitoring the health of existing operations, whether that’s sales performance, marketing effectiveness, or project timelines.

When and how to combine OKRs and KPIs

For many, the question shouldn't be which is better—OKRs vs KPIs—but how they can work together. I’ve seen teams successfully use both frameworks in tandem. 

KPIs can serve as a baseline that informs your OKRs, while OKRs drive broader strategic initiatives. For example, consider a company that sets a KPI of keeping employee turnover below 15% for the year. If the monthly review shows turnover creeping to 23%, that’s a clear signal to initiate an OKR focused on employee engagement:

Objective: Improve employee engagement scores by 20% in the next survey.

Key Results:

• Launch a new intranet for connecting onsite, remote, and hybrid workers.
• Roll out clear career advancement tracks.
• Provide targeted training for managers on autonomy and wellbeing.

This integrated approach ensures that your OKR and KPI strategy doesn't depend on choosing one over the other—instead, they complement each other.

OKRs and KPIs Best Practices 

If you're looking to get started in a new OKR or KPI strategy (or a combination of both)  here are some best practices I’ve found for working with these frameworks:

Have Clear Objectives and Key Results:

Ambiguity is the enemy of progress. Make sure your OKRs are specific, measurable, and time-bound. For instance, instead of a vague “boost productivity,” opt for “increase monthly sales by 15%.”

Select Relevant KPIs:

Choose KPIs that directly tie into your strategic goals. Whether it’s tracking new inbound leads or monitoring capacity utilization, ensure that each KPI provides actionable insights.

Integrate and Align:

Ensure that KPIs and OKRs are not working in silos. Align them with broader business objectives to create a cohesive strategy. For example, a KPI that tracks employee turnover can be directly linked to OKRs aimed at improving employee engagement.

Regular Review and Adaptation:

Performance measurement isn’t a set-it-and-forget-it process. Regularly review your KPIs and OKRs, adapt them based on current data, and keep your team informed. Continuous tracking increases project success rates significantly.

Foster Transparency and Communication:

Share progress updates across teams. When everyone understands how their work contributes to overarching goals, motivation and productivity rise dramatically. 

Conclusion: Making the Choice for Your Team

In the ongoing debate of OKRs vs KPIs, there isn’t a one-size-fits-all answer. Instead, the decision comes down to your unique needs and objectives. 

If your aim is to drive transformational change and set aggressive goals, OKRs might be the right choice. However, if you’re focused on tracking performance and ensuring day-to-day progress, KPIs can provide the critical metrics you need. In my experience, blending both KPIs and OKRs has also produced wonderful results. 

In the end, the most effective strategy will always be the one that adapts to your business’ needs and your team's workflow.