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 Indicators
|Objectives and Key Results
|List of measures & metrics
|List of overarching goals and. for each, indicators of success
|Quantifiable and Activities/achievements defining success
|Roll up from teams and departments to central management
|Bi-directional alignment. In smaller companies, tend to be management-driven.
|Current & Past Performance
|Operational Management / Execution; Check performance
|Strategic Planning & Forward Management
|Infrequent – Annually or every few years.
|Frequently – Every quarter, or at least every year.
|Guide Daily Execution
|Drive 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*
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:
- Core Purpose
Because I have my clients go beyond identifying KPIs to also define a Performance Budget, in the Pivot Habit method, KPIs become:
- Timing – Past performance, current performance, and forward looking.
- Role/Use – Strategic & Forward management as well as execution management.
- Core Purpose – Driving dynamic change as well as guiding daily execution.
Download the KPI Planning and Tracking Worksheet
Save hours of work by starting with a pre-made Excel Workbook featuring examples, explanations, and built-in calculations.