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KPIs vs OKRs

December 29, 2020 by Dustin

Metrics combine two or more measures to provide context and more information.

Key Performance Indicators (KPIs) and Objectives and Key Results (OKRs) are both tools that big businesses use in strategic planning and execution. They’re also great tools for small-to-medium business to use to compete and perform like the big dogs. Let’s take a look at the similarities and differences and get a handle on why you need both.

Key Performance IndicatorsObjectives and Key Results
StructureList of measures & metrics List of overarching goals and. for each, indicators of success
DataNumeric/quantifiableQuantifiable and Activities/achievements defining success
OrientationRoll up from teams and departments to central managementBi-directional alignment. In smaller companies, tend to be management-driven.
Timing*Current & Past PerformanceForward-Looking
Role/Use*Operational Management / Execution; Check performanceStrategic Planning & Forward Management
Redefinition FrequencyInfrequent – Annually or every few years.Frequently – Every quarter, or at least every year.
Core Purpose*Guide Daily ExecutionDrive Dynamic Change & Improvement

If you walk down the table above and compare and contrast each point, you should have a really good idea of the purpose and use of KPIs vs. OKRs and when to use each.

What About That Pesky Asterisk*

Measures are point-in-time data points.

There’s just one catch. I have high expectations of myself and my clients. I don’t use Key Performance Indicators quite the way they’re intended. What’s the fun in that!

There are three items in the chart above that have asterisks:

  1. Timing
  2. Role/Use
  3. Core Purpose

Because I have my clients go beyond identifying KPIs to also define a Performance Budget, in the Pivot Habit method, KPIs become:

  1. Timing – Past performance, current performance, and forward looking.
  2. Role/Use – Strategic & Forward management as well as execution management.
  3. Core Purpose – Driving dynamic change as well as guiding daily execution.

Back to Index | Next: Benefits of KPIs

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A comparison of KPI features vs OKR features.
A comparison of KPI features vs OKR features.

Filed Under: KPI

About Dustin

Dustin Walling is business strategy, execution, and leadership team consultant focused on small-to-medium businesses who wish to achieve breakthrough results. Learn more about how Dustin works with his clients.

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