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OKRs vs. KPIs, Similarities and Differences

December 30, 2020 by Dustin

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

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

Objectives and Key ResultsKey Performance Indicators
StructureList of overarching goals and, for each, indicators of successList of measures & metrics
DataQuantifiable and Activities/achievements defining successNumeric/quantifiable
OrientationBi-directional alignment. In smaller companies, tend to be management-driven.Roll up from teams and departments to central management
Timing*Forward-LookingCurrent & Past Performance
Role/Use*Strategic Planning & Forward ManagementOperational Management / Execution; Check performance
Redefinition FrequencyFrequently – Every quarter, or at least every year.Infrequent – Annually or every few years.
Core Purpose*Drive Dynamic Change & ImprovementGuide Daily Execution

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 OKRs

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A comparison of OKR features vs KPI features,
A comparison of OKR features vs KPI features,

Filed Under: OKR

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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