While there can be overlap (more on that later), these two concepts are really very different. You can’t really compare OKRs and KPIs because they’re both part of the same picture. OKR is all about bringing in a sustainable change in performance to get to your objectives. X. KPI stands for Key Performance Indicator. Difference Between KPI and OKR. You use KPIs for Dashboards, when doing diagnostics and strategy creation, and when telling the story of your company to 3rd Parties e.g. KPIs are lag goals, which describe and verify the desired, measurable final result. industry average, year-over-year growth, etc.). OKRs help us to focus and align on the right things, in oder to influence KPIs positively. OKRs are not equal to KPIs. – The approach to OKR is very simple. OKR is just new terminology probably invented to simplify but has also taken credit away from the real guru’s that developed the ideas. There is no doubt that KPIs are important to monitor, but they are more describing the big elephant for the year. It is a collaborative framework that uses certain measurable values to track the attainment of your goals. In other words, KPIs are related to observations about the processes of projects under construction, while OKRs include tactics for new breakthroughs and developments. The challenge is that “KPI” can mean different things for different people, which is confusing. There is no need to resubmit your comment. KPIs goals are typically obtainable. Click To Tweet. OKRs, on the other hand, are not a tracking system but a goal-setting tool that sees organizational objectives as inspirational goals that the company wants to achieve with measurable results. So, comparing KPIs with OKRs is like comparing apples with oranges. KPI is about identifying the key metrics that can be used to drive organizational behavior. They are usually set by c-level executives for the whole company to follow, keeping everyone on the same path. To understand the interplay of the two concepts, a differentiation into lead and lag goals is helpful. OKRs, as the name suggest, use objectives and key results to set goals – objectives represent where you want to go and key results determine how you plan to get there. Two concepts stand out when it comes to managing goals and performance. Essentially, the OKR system sets targets and provides a means of measuring results. A KPI, on the other hand, measures the success, the output, quantity, or quality of an ongoing process or activity. Typically, an organization will have three to five high-level objectives and three to five key results per objective. Simply put, the KPIs define the “what” while OKRs define the “what”, “how”, and “when”. OKR is a strategic framework, whereas KPIs are measurements that exist within a framework. These terms are often thrown around during performance review meetings. Your objective is what you want to accomplish. The main reason for the difference between KPI and OKR is why they are set and for what purpose. OKR is About Creating Sustainable Change in Performance. OKR is the acronym for objective and key results—more specifically, an objective is tied to key results. If you want your company to be an industry leader, then the objective of KPIs maybe to increase revenue by at least 10 percent. The three letter acronym, KPI, or Key Performance Indicator, goes by many names and it can be seen as a kind of metric that drives organizational behavior. Though both KPI and OKR help you measure performance and motivate you to accomplish your goals, they both are different from each other. The difference between KPIs and regular metrics is that KPIs are the things that—if you don’t do them well—the business is almost guaranteed to fail. In that way, KPIs are an important component of OKRs. Difference Between Vitamin D and Vitamin D3 - 118 emails Difference Between Goals and Objectives - 102 emails Difference Between LCD and LED Televisions - 89 emails The relation between these is that the existing KPI is the then OKR, that is those KPIs matter most and they will be part of your OKR. When comparing OKRs vs. KPIs, we’ve used some clear-cut examples. So the OKR is the lofty goal your company dreams up, and the KPI presents you with the reality – how successful you are at achieving those ambitious goals. It’s important to note that, unless you have a very small company, your KPIs can and should be broken down by department (and by industry if you are a conglomerate). For each OKR, there is an objective to be achieved, along with a set of metrics that will measure the achievement of that objective, called key results. It is only natural that people question the difference between OKR vs. KPIs. By continuing, you agree to our use of cookies to optimize and personalize your experience on our site. OKR is a goal-setting tool that sees organizational objectives as inspirational goals that the company wants to achieve with measurable results, whereas KPIs are health metrics that help measure the success of your ongoing activities, processes, projects, etc. About the process of the two concepts are really very different oder to influence KPIs positively KPIs go! Reach said goal financial KPIs are measurements that exist within a framework KRA. That they are set and for what purpose, measurable final result and the metrics. Objectives and three to five key results per objective desired, measurable final result for! On, ClearPoint can help you drive it all with our comprehensive system for strategy.. 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