OKR vs KPI: What's the difference? – Weekdone Academy

While KPIs are business metrics that reflect performance, OKR is a goal-setting method that helps you improve performance and drive change. So KPIs let you know ... Skiptothecontent CloseMenu English(EN) Showsubmenu EN Product BookaDemo Prices ResourcesShowsubmenu Ebooks Webinars OKR:TheUltimateGuidetoObjectivesandKeyResults Plans,Progress,Problems LearningCenter LeadershipBlog Startforfree LoginShowsubmenu Signin Forgotpassword SigninwithGoogle Loggedin Measuringbusinessperformanceisthekeytoyourgrowth. Foranybusiness,it’simportanttounderstandthecurrentstateoftheprogress,whatworks,andwhatdoesn’t.However,withsomanyperformancemetricstotrackit’ssometimeschallengingtounderstandwhichonessuityourbusinessbetterandactuallydrivechanges. What’sevenmorechallengingistounderstandhowexactlytodrivethesemetricsandwhoshouldberesponsibleforthem.That’swhysettingyourKPIs(KeyPerformanceIndicators)isasimportantassettingyourOKRs(ObjectivesandKeyResults)tomeasuretherightthingsandmovetheneedle.  Inthisarticle,we’recomparingOKRvsKPI,twocommonlyusedbusinessperformanceframeworks,toshow: WhatdoOKRandKPIstandfor?What’sthedifferencebetweenOKRandKPI?WhatareOKRandKPIexamples?CanOKRsandKPIsworktogether? Withoutfurtherado,let’sstart. WhatisaKPI? KPIstandsforKeyPerformanceIndicators,measurablenumbersthatdemonstratehoweffectivelyyourbusinessismovingtowardssetgoalssuchastargetedquarterlyrevenueortargetednewcustomerspermonth.KPIshelpcompanies,departments,teams,andindividualssetcleartargetsandmonitorhowachievingKPItargetsisprogressing.  Inmostcompanies,KPIsreflectrevenuetargetsandmonth-on-monthgrowthofvariousbusinessmetrics.YoucantrackallofyourregularbusinessactivitieswithKPIs,i.e.: revenueis$100,000MRRcustomeracquisitioncostis$100 monthlywebsitetrafficis10,000newvisitorsaveragetransactionvalueis$1,000dealsclosedbyasalespersonpermonthis10salesbytheregionis100,etc. Thesetargetscanbeannual,quarterly,monthly,daily,orevenhourly,dependingonwhatyouwishtokeepaneyeon.  ThepurposeofKPIistoanalyzepastperformanceandmakepredictionsforthefuture:whichmonthsorregionsaregoingtobringinsales,howmanydealswillbeclosedbyasalesperson,orwhatanaveragetransactionvaluetoexpect. WhatisanOKR? OKRstandsforObjectivesandKeyResults,agoal-settingframeworkthathelpscompaniesestablish“objectives”alongwiththemeasurable“keyresults”thatsupporttheachievementofeachobjective.OKRsinbusinessareusedtocommunicatedesiredoutcomesthroughouttheorganization,focusonthemostimportantareasthatneedimprovement,anddelivervaluableresultsforthebusiness. Inmostcases,OKRsreflectareasofimprovement(aka‘objectives’)thataremeanttohelpyouachieveKPItargets.OKRsaremeasuredby‘keyresults’thatyouusetotracktheimpactofthechangesandimprovementsyourteamdecidedtomake.YoucanimproveanyareaofyourbusinesswithOKRsi.e.: increaseengagementintheproduct,personalizesalesapproachandnurturenewpotentialcustomersbetter,leverage“socialproof”toincreasecredibilityandimprovereputation,increasethenumberofhighqualityleads,scaleQAEngineeringteam,buildafinancialplanningenginethatimprovesaccountingprocessesandacceleratesbusinessgrowth. What’sthedifferencebetweenOKRsandKPIs? ThepurposeofOKRsistodecidewhatexactlyyouneedtoimproveinyourbusinessand,basedonthat,howyouwillspendyourtimeandresourcesinthenext3months.It’sasmuchaboutsaying“no”toopportunities,asitisaboutpursuingthem. WhileKPIsarebusinessmetricsthatreflectperformance,OKRisagoal-settingmethodthathelpsyouimproveperformanceanddrivechange.SoKPIsletyouknowwhatyouneedtoanalyzetodeterminethebasisforyourOKRs. BothOKRsandKPIsaremeasurableandbothreflecttheteam’sperformance.ComparingOKRsvsKPIs,what’sdifferentiswhatexactlyyoumeasureandhowyoucomeupwiththosemeasurements.  KPIsareusedtomeasureperformancebuttheydon’ttellyouwhatneedstochangeorimprovetodrivethegrowthofthosenumbers.Theyarehigh-levelbusinessperformancemetricsthatyouanalyzewithprecisefrequency(yearly,quarterly,monthly,weekly,etc.). OKRsareusedtodecidewhatneedstobechanged,fixed,orimproved.Andonceyou’vedecidedonwhichareaneedsimprovement,youwriteanObjectivefocusedonthatareaandKeyResultstomeasurehowcloseyou’regettingtothisObjective.SoKeyResultsarespecifictoaparticularfocusarearepresentedbyanObjective. SignuptoWeekdonetotrackKPIs&OKRs Free14-daytrial&nocreditcardrequired.Coaching&onboardingincluded. TalkingaboutOKRsvsKPIs,herearethemaindifferences: KPIExamples HerearesomecommonKPIexamplesforvariousteams.KPIsareusuallyachievedwithbusiness-as-usualandasapartofthedailyroutine.Inotherwords,whenpeoplearedoingwhattheirjobdescriptionsaystheyshouldbedoing,theyshouldbeachievingthesetargets.  Noticehowquantitative,measurableandtarget-orientedtheyare: SalesKPIs: thenumberofnewinboundleadspermonthis1,000leadresponsetimeis2daysleadconversionrateis3%averageordervalueis$1,000averagesalescycletimeis2monthsupsellis50% MarketingKPIs: thenumberofMarketingQualifiedLeads(MQLs)is1,000thenumberofSalesQualifiedLeads(SQLs)is100CostperLeadis$100  Conversionratesfromawebsitevisitortoaleadis10%Monthlyorganictraffictoawebsiteis100,000newvisitorsCustomerLifetimeValue(CLV)is$1,000 CustomerSuccessKPIs: CustomerChurnRateis5%AverageRevenuePerUser(ARPU)is$1,500CustomerRetentionCost(CRC)is$100FirstResponseTime(FRT)overchatis3minutesCustomerSatisfactionScore(CSAT)is80%NetPromoterScore(NPS)is70 ProductManagementKPIs: On-TimeDelivery(eachrelease)is20daysThenumberofDailyActiveUsers(DAU)is1,000Retentionrateis20%Sessiondurationis10minutes Numberofuseractionspersessionis10Bouncerateis30% OKRExamples  HerearegeneralOKRexamplesthatincludeinitiativestosupporteachobjectivealongwithitskeyresults.OKRsarethebridgesbetweenwhereyouareandwhereyouwanttobe.  ThepurposeoftheOKRmethodologyistosingleoutimprovementareasforthequarterandfocusyourteams’attentionondeliveringvaluablebusinessresults.  NoticehowtheseOKRsarenotonlymeasurablebutalsoinspirationalandaction-driven.  ProductTeamOKRs ProductTeamObjective Increaseengagementinourproduct ProductTeamKeyresults KR1:Increaseaveragesessiondurationfrom10minto25minKR2:Analyzecompetitor’sofferingandimplementtop3improvementideasKR3:Increaseaveragedailyactivityperuserby12% ProductTeamInitiatives MakealisttocompareourproductwiththecompetitorandbrainstormideasforimprovementReachouttoloyalcustomersandaskforfeedbackDesignandlauncha“wow”featuretoignitediscussionsandtriggercustomerengagement  MarketingTeamOKRs MarketingTeamObjective Leverage“socialproof”toincreasecredibilityandimprovereputation MarketingTeamKeyResults KR1:Getatleast15,000viewsonourtestimonialspageKR2:Reachanaverageclick-throughrateof20%inthecommunicationcampaignKR3:IncreasethenumberofsharesonLinkedinfrom30to1,000KR4:Reduceanaverageacquisitioncostpercustomerfrom$100to20$ MarketingTeamInitiatives PartnerupwiththoughtleaderstopromoteourtestimonialspageReachouttopowerusersandasktosharetheirsuccessstoriesinvideoformatBrainstormideasforLinkedInmarketing SalesTeamOKRs SalesTeamObjective  Personalizesalesapproachandnurturenewpotentialcustomersbetter SalesTeamKeyResults: KR1:Increasethenumberoftouchpointswithanewleadfrom3to6  KR2:Increasefollowupemailopenratefrom14%to45% KR3:Reach8/10averagescoreoncustomersatisfactionsurveywithatleast100responses SalesTeamInitiatives UpdatethecustomerjourneymaptoimprovethenurturingprocessTakeacourseonbestpracticeemailapproachesandconsultwiththeMarketingteamCreatedifferentoffersfordifferentusecases,reviewthesalespitch CustomerSuccessTeamOKRs CustomerSuccessTeamObjective:  Increaseengagementwithnewpayingcustomers  CustomerSuccessTeamKeyResults: KR1:Increaseopenrateofourin-productcommunicationfrom4%to15%KR2:Increasethenumberoffollow-upmeetingsbookedfrom7to21perweekKR3:Achieveservicequalityrating9outof10basedontheaftermeetinganonymouspollKR4:Reduceaverageresponsetimefrom5hto1h CustomerSuccessTeamInitiatives Analyseopenratefrompreviousquarteranddraftnewcopiesforin-appmessagesPersonalizeoutgoingcommunicationCreateahighqualityFAQsectionandstockanswerstospeedupresponsesSurveyourhighengagementcustomerstoaskwhattheylikeinourservices   👉 Ifyouneedmoreteam-levelOKRexamples,youcanbrowseourOKRexamplesdatabase. CanOKRsandKPIsworktogether? KPIsandOKRsactuallyworktogetherquitenicely:KPIbeingastartingpointofaconversationaboutimprovementstoimplementorproblemstosolve,andOKRspecifyingafocusareaandmeasurableoutcomestobeachievedtodeliveronthoseimprovements.  👉DecidingonwhatmattersmostisthefoundationforwritingObjectivesandKeyResults. AnalyzingyourperformanceagainstKPItargetsallowsyoutounderstandhowtokeepyourbusinessgoing.Simplyput,youcannothaveafunctionalwell-organizedcompanyifyouarenotmeasuringyourKPIs.  However,havingthesenumbersdoesn’treallytellyoudirectlyhowtoimprovethem.Youcannotgrowabusinessbysimplysaying“weneedtohitahigherrevenuetarget”.Andifyou’refallingbehindonyourKPItargets,whatexactlydoyouneedtoimprovetoputeverythingbackontrack? ThisiswherewebegintodiscusshowOKRsandKPIscanworktogether. KPI&OKRBestPractices TherearetwospecificcaseswhenaKPInumbersuggeststhatanOKRisneededtoaddressaparticularissue:  Ifyou’refallingbehindonyourKPItarget,youneedanOKRtoputeverythingbackontrack.IfyouwanttoachieveamoreambitiousKPItarget(likeabigrevenuenumber),youneedOKRsthatwillguideyouthere. Let’stakeanexample.  CompanyA’sCustomerSuccessteamhasaKPItargetof100meetingsperquarter.Theyrealizethattoonboardmorecustomersandincreasecustomerlifetimevalue,theyneedtohavemoremeetings.SotheydecidetopursueamuchhigherKPItargetof300meetingsperquarter.  OncetheKPItargetisclarified,it’sagoodstartingpointtomoveontodiscussingwhatcouldbeimprovedanduseOKRsforthat.So,whatexactlydoestheCustomerSuccessteamneedtofocusontodeliveronthetargetof300meetingsin3months? ThequestionstohelpidentifythemostimpactfulimprovementareasfortheCustomerSuccessteammightbe: Willtheyfocusonnewcustomersortheoneswhosubscribedinthepast6months?Howwilltheteamapproachthis:throughemailcommunication,in-productnotificationsoralandingpage?Woulditbemoreimpactfultofocusonlong-termcustomersandengagethemmoreoften?Howmanymeetingspercustomerisenoughtomakesurecontinuoususageandengagement?Ifcustomersarenotbookingfollowups,isitbecauseofthebadfirstimpression?Shouldtheteamconsiderimprovingthesalespitchanddemoapproach? Tofindandprioritizethemostimpactfulimprovementarea,companyA’sCustomerSuccessteamwouldsetupadiscussion.Teamdiscussionsarethekeytoteamalignmentthroughwhichitwouldbecomeclearthatsomeareasaremoreimpactfulthanothers,andyouhavemorefaithandconfidenceinsomeideasfordeliveringactualchange.Theoutcomesofthediscussionwouldserveasabasisfortherightobjectivesetting. 👉UsethisCustomerSuccessOKRtemplateasabasisforyourownObjectivesandKeyResults. Tocontinuewithourexample,let’simaginethattheCustomerSuccessteamdecidedtofocusonthecustomerswhosubscribedinthepast3monthsandincreaseengagementwiththem.Theteamwillapplydifferenttacticstodeliveronthedesirableoutcomes.Butwhichoutcomesaredesirablehere? Usually,companiesthinkthattheKPIshouldbeoneoftheKeyResultsundertheObjective,butthisisn’tthebestpractice.  Insteadofwriting“increasethenumberofmeetingsfrom100to300”,whichisjustreiteratingtheKPItarget,trytoidentifyanoutcomethattheteamcaninfluenceonanongoingbasis.Somethingthattheycantrackeveryweekandtakeactionwhentheprogressisatrisk,forexample:“Improvecustomerloyaltyandsatisfaction.”WhiletheKPItargetwouldbeastartingpoint,theObjectivewouldbeanareaofimprovementthattheCustomerSuccessteamcandirectlyimpacton. 👉SeehoweasyitistosetupKPIsandOKRsinOKRsoftwarelikeWeekdone: 👉TryWeekdoneOKRsoftwareforfreeandsetupyourfirstOKRstoday. UseWeekdonetoMasterYourOKRs&KPIs Free14-daytrial&nocreditcardrequired.Coaching&onboardingincluded. Remember,youshouldhaveatleast2-3andnomorethan5KeyResultsperObjective. ForOKRstowork,youneedtodefinetheObjectivesoclearlythatitwouldshapethethoughtprocessandprioritizationframeworkfortheentirequarter.Knowingtheactualoutcomeshelpstheteamtochoosetherighttaskstoworkon,andnottowastetheirtimeonpursuingeverythingthatcomestomind.Everyoneshouldstayfocused. ThisKPInumbergrowthmightnotbeimmediatebutsuccessisnotasingleleapfromzerotohero.It’saprocessoffixingweaknessesandstrengtheningyourbestfeatures.SoifthisOKRdidn’timpactyourbusinessthewayyouwanteditto,youcananalyzewhatworkedandwhatdidn’t,andcomeupwithabetterapproach,andabetterteamOKRforthenextquarter. ByanalyzingyourOKRprogressinretrospect(inTeamWeeklyOKRCheck-ins),youarefiguringoutanddocumentingexactlyHOWyouaremostlikelytoimproveyourbusinessandachieveyourambitiousKPItargets. Thebottomline Asyousee,the“OKRsvsKPIs”conceptincludestwoframeworksthathavetotallydifferentintentsandlogicbehindthem.KeyPerformanceIndicatorsandObjectivesandKeyResultscoexistverywellandyoushouldusebothframeworksinyourbusinessbutforcompletelydifferentpurposes.UseOKRsforgoal-settingandimprovingyourbusinessandKPIsformonitoringgeneralbusinessperformance. Forimprovement-orientedandfocusedgoal-setting,youshoulddefinitelyuseOKRs.TheOKRmethodologyoffersgreatbenefitsfororganizations.ThebestwaytoachievesuccesswiththemethodologyisbyusingaspecializedOKRsoftwarelikeWeekdonethatallowscompany-widetransparency,effectivecommunicationofpriorities,and,mostimportantly,alignmentofObjectives. SucceedwithOKRs,KPIs&EmpowerYourTeamswithWeekdone Free14-daytrial&nocreditcardrequired.Coaching&onboardingincluded. 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