The Difference Between KPIs and OKRs

What is a KPI?

Key Performance Indicators (KPIs) are defined as performance metrics that evaluate the success of an organization or of a particular activity. KPIs can apply to projects, programs, products, and a variety of other initiatives. They can measure the success of anything from sales goals to social media metrics.

KPIs should be tailored to your specific organizational objectives, how you plan on achieving them, and who can act on this information. Let's take a look at an example. Let's say your KPI was to increase Marketing Qualified Leads (MQLs) by 30%. Here's how you define it:

KPI for MQL Growth 

What: Increase MQLs by 30% this year 
Why: Achieving this target will allow the business to become profitable 
How: Hiring additional sales staff, improving existing marketing strategies, adopting a new tool, creating more content, etc. 
Who: VP of Marketing is responsible for this metric 
When: The KPI will be reviewed on a quarterly basis

What is an OKR?

Objectives and Key Results (OKRs) are defined as a metric that outlines company and team "objectives" along with the measurable "key results" that define the achievement of each objective. OKRs represent aggressive goals and define the measurable steps you’ll take towards achieving those goals. They're typically used to set quarterly goals, but can also be used for annual planning. The rising popularity of OKRs is mainly attributed to Intel and Google, who have adopted this technique for their planning.

OKRs are set at the company, team, and individual level. Here are a handful of OKR examples:

Company - OKR 1

Objective: Become the top most-downloaded iOS Productivity App 

Key Result 1: Conduct survey to identify 10 most-requested features and launch 5 of the top most-requested features by Dec 15 Key 

Result 2: Conduct 10 user tests to identify UX issues 

Key Result 3: Show at least 50% improvement in satisfaction with UX (via customer survey) 

Key Result 4: Earn 200 5-star ratings by Dec 31

Company - OKR 2

Objective: Increase brand recognition and awareness 

Key Result 1: Increase media engagement by 20% 

Key Result 2: Launch customer referral program by Jan 1 

Key Result 3: Extend social media reach and visibility to two new target markets 

Key Result 4: Expand thought leadership program by placing guest articles on four industry-related sites with an Alexa ranking of at least 30,000

Marketing Team OKR

Objective: Increase social media engagement by 35% 

Key Result 1: Research and identify three most popular social media sites among two new target audiences and develop engagement strategy by Jan 1 

Key Result 2: Participate in six Twitter chats involving industry leaders 

Key Result 3: Respond to new Facebook comments within three hours 

Key Result 4: Increase number of followers on Facebook and Twitter by 20%

Individual OKR

Objective: Increase number of social media connections by 25% 

Key Result 1: Increase posting frequency on Twitter to 8x daily and Facebook to 3x daily 

Key Result 2: Establish social media presence on two new sites: LinkedIn and Quora 

Key Result 3: Join 5 LinkedIn groups with at least 2,500 members each and leave comments on the 10 most popular discussions in each group 

Key Result 4: Gain 15 followers on Quora by posting three answers and one question every week

The Difference Between KPIs and OKRs

One of the key differences between OKRs and KPIs is the intention behind the goal setting. KPI goals are typically obtainable and represent the output of a process or project already in place, while OKR goals are somewhat more aggressive and ambitious.

Which One is Better?

When evaluating whether to use OKRs vs. KPIs, it's really up to you and what you're looking to measure.

For example, if you're looking to scale or improve upon a plan or project that's been done before, KPIs might be the better option. They're straightforward and allow you to add a measurement system to your ongoing projects and processes.

However, if you have a larger vision or are looking to change your overall direction, OKRs might be the better alternative. They have greater depth that will allow you to stretch your goals even further and allow you to be a bit more creative on how you plan to reach those goals.

Importance of Measuring Performance

Regardless of which technique you choose, the bottom line is: the only way to improve is to measure and review performance. If you don't take the time to set objectives, or you're setting them but not reviewing them at the end of the year/quarter, you miss a prime opportunity to learn and improve. You can actually learn from failures and successes, so make it a top priority to implement performance metrics. You may be surprised how quickly you and your team reach them.

Edited by: 浪子

Bibliography

Brianna Hansen. (2017). KPIs vs. OKRs: How They Compare and Why You Need Both to be Successful. 
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