Many organisations track many different performance metrics, yet still seem to struggle to answer one simple question:
What are we actually trying to achieve?
This often comes down to confusing KPIs with OKRs. While they’re closely related, they serve different purposes. Understanding the difference helps businesses measure day-to-day performance while keeping teams focused on longer-term goals.
In this short blog, we’ll explain:
- What OKRs and KPIs are
- How they work together
- Why organisations rely on both to succeed
What Is a KPI?
A Key Performance Indicator (KPI) is a measurable value used to monitor how well part of your business is performing.
KPIs measure ongoing performance against an expected standard. They provide a clear picture of what’s happening today and whether operations are running as expected.
Common examples include:
- Sales conversion rate
- Customer retention
- Call answer rates
- Average handling time
- Website bounce rate
- Customer satisfaction scores
Unlike projects or campaigns, KPIs don’t have an end date. They’re monitored continuously to help businesses identify trends, spot issues early and maintain consistent performance.
For many organisations, KPIs also play an important role in performance management and team development. Combined with effective leadership and regular coaching, they provide valuable insight into where improvements can be made.
What Is an OKR?
OKR stands for Objectives and Key Results.
Where a KPI measures performance, an OKR defines where you want the business to go next. It’s the thing you’re trying to achieve, and the measurable proof that you got there.
An OKR consists of two parts:
Objectives:
The Objective is the goal. Something inspiring, something that gives people a reason to get out of bed.
Key Results:
The Key Results are the 3 or 4 measurable outcomes that prove you hit it.
Example:
Google used OKRs from its very early days, championed by John Doerr. One of their famous objectives was simple: “Make Search the fastest, most accurate search engine in the world.” That’s not a number. That’s a direction. The Key Results underneath it were the measurable bits, things like search speed in milliseconds, accuracy rates, index size.
See the difference? The Objective inspires. The Key Results prove it.
The Difference Between OKRs and KPIs
The biggest misconception is that businesses must choose between OKRs and KPIs.
They don’t.
They answer completely different questions.
KPIs ask: “Is the business healthy?”
OKRs ask: “Where are we trying to get to, and how will we know we’ve arrived?”
A sales team might have a KPI of “85% of calls answered within 30 seconds.” That’s permanent. It runs every month, forever, as a measure of operational health.
But an OKR for that same team might be: “Become the most trusted account partner in the FMCG sector this quarter.” Key Results underneath could be things like landing 3 new strategic accounts, increasing average deal size by 20%, or getting a net promoter score above 60 from key clients.
One measures the engine running. The other measures whether you’re driving somewhere worth going.
Why You Need Both to Succeed
Businesses that only track KPIs end up being in a position of hitting every target while making very little strategic progress.
On the other hand, if organisations that focus only on the ambitious objective and key results, risk overlooking their everyday performance. If this begins to slip, long-term goals become much harder to achieve.
Spotify provides a good example of balancing the two. Individual teams work towards quarterly OKRs aligned with wider company objectives while continuing to monitor core business KPIs such as daily active users, listening hours and customer churn. This allows teams to pursue improvement without losing sight of business performance.
The strongest organisations don’t treat OKRs and KPIs as competing systems.
They use KPIs to maintain operational performance while using OKRs to move the business forward.
Found this helpful? Check out our YouTube video to learn more about OKR’s and KPI’s here:
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