OKRs vs. KPIs, Similarities and Differences

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 Results	Key Performance Indicators
Structure	List of overarching goals and, for each, indicators of success	List of measures & metrics
Data	Quantifiable and Activities/achievements defining success	Numeric/quantifiable
Orientation	Bi-directional alignment. In smaller companies, tend to be management-driven.	Roll up from teams and departments to central management
Timing*	Forward-Looking	Current & Past Performance
Role/Use*	Strategic Planning & Forward Management	Operational Management / Execution; Check performance
Redefinition Frequency	Frequently – Every quarter, or at least every year.	Infrequent – Annually or every few years.
Core Purpose*	Drive Dynamic Change & Improvement	Guide 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*

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.

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