OKR is currently one of the most popular topics in different industries. One of the most frequent questions that people have related to OKR is the difference between OKR and KPI. As a person who is interested in OKR, you might be wondering how OKR and KPI compare. So, let’s start with the definitions:
What is OKR?
OKR stands for Objectives and Key Results. In detail, OKR is an effective goal setting and tracking method used by individuals and teams to set challenging, ambitious goals with measurable key results. OKR helps organizations define goals or objectives and then track the outcome in companies and at all levels. It keeps teams connected and provides alignment to strategic objectives.
What is KPI?
KPI stands for Key Performance Indicator. KPI measures an organization’s success in achieving its key business objectives, so KPI is considered a performance measurement tool. In other words, KPI evaluates how well different parts of a company are performing on the way to achieving goals.
Differences between OKRs and KPIs
By reading the definitions, you may have noticed some similarities and differences between the OKR and KPI. Both of them are used for goal setting and ensuring that everyone in the organization is doing great. But according to the definitions, there are some important differences between them that should not be ignored.
OKR: Ambitious, challenging and qualitative goals with measurable key results
KPI: Obtainable goals with quantifiable measurements
OKR: Progress and growth
KPI: Success in achieving the expected outcome
The main purpose of use
OKR: Increasing alignment and engagement in the organizations
KPI: Performance appraisal in the organizations
KPI and OKR do not go against each other. In most cases, in your business, you can use them together to get better results. OKR helps you set goals and key results and identify how to achieve them, while KPI helps you evaluate performance against your goals.