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Updated on May 06, 2021
Hi there! My name is Vasily Ivanov, I am the founder and CEO of KeepSolid. My friends and managers around me raise questions that I find would be interesting to cover to a wider circle of readers. Today's topic is "OKR vs KPI". This is the wording of the question that I hear most often - people set OKR off against KPI to find which is best and which to choose. In this piece, I will tell you my opinion on this topic.
There is a reason why this topic is of particular interest to me: one of our company’s products is called KeepSolid Goals. It was designed with goal-oriented management in mind (for small to large teams and enterprises). The main idea behind this solution is that we need to manage the results that we want to achieve, not the volume of work or man-hours.
To make the process of your goal achievement as efficient as possible, the Goals app lets you use both OKR and KPI. Find out definitions and what is the difference between OKR and KPI below.
What does OKR stand for? OKR is the acronym for Objectives and Key Results. We need to set Objectives that we want to achieve – but since an Objective is something voluminous and laborious, we break them down into intermediate Key Results. Pay attention to the word “key”! There is no need to describe all the results that we want to get daily – just the most important ones that determine the success of the project.
KPI stands for Key Performance Indicators. Any team or position can be described by dozens or even hundreds of different indicators. But we are not interested in all of them – only those are key to the success of our organization. These are what we choose – individual KPIs are determined for each employee and department.
A simple example: I know some IT companies that primarily strive to track employees’ work attendance hours. In our company, this is considered utter nonsense, since the amount of time spent in the office does not at all determine the work result. In our case, the KPIs of a programmer, for instance, would be the number of tasks completed on time or how few errors occurred per the amount of work produced.
Now that we’ve defined OKR and KPI, you may have noticed that the dispute “KPI vs OKR” is similar to the question "warm or soft?" These are incomparable terms that work only in conjunction.
Imagine we have set ourselves a goal and headed towards it, and then do not measure our progress along the way. We just believe that we are going in the right direction. How long do we have to go? What kind of labor does it take to achieve the goal? What budget is required? We do not know. It is KPIs that determine how well we are moving towards our goal.
Let's take a simple example. I love car travel. Imagine there is a mountain top that I want to drive to - this is my Objective. For this, I will have to drive 1000 kilometers. For the car to travel this distance, I should refuel it at least once halfway through - reaching a gas station will be my intermediate Key Result.
With such OKRs, I can decide that after 500 km I will either refuel or I will not go further. If I refuel, I have successfully passed this milestone, my tank is full and I can move on. If not, there is no point in driving further, as the car will stall.
What are my KPIs in this case? During the trip, I look at some indicators on the car dashboard:
These are the KPIs that I keep track of as I move along the route to my Objective. Now imagine that I do not follow these indicators. I just believe that I will get to the gas station, and then to the mountain top. Doesn't that sound like foolhardy management?
Unfortunately, quite a few executives choose to use either OKRs or KPIs, in isolation. For the above reasons, I do not recommend that you do this. But at the end of the day, it's up to you to decide whether to use them together or separately. Write your reviews on Facebook or LinkedIn - what do you think about the topic “OKR vs KPI”? Well, if you decide to use KeepSolid Goals, I will be grateful for your feedback! In the meantime, see more info about the app below.
The Goals app fosters the OKR goal-setting methodology. When you set an Objective in the Goals, you break it down into Key Results, and the Key Results – in Sub-Key Results and Tasks. The OKRs are visually displayed on an Objective map. This makes your objectives more attainable and lets you always have a big-picture view of the entire project.
Among other properties, Key Results, Sub-Key Results, and Tasks have the KPI field. There, you can indicate your OKR metrics. Our OKR software lets you use different types of KPIs (financial, number, and absolute) so that you can easily evaluate performance and progress towards achieving your goals.
Get Goals, set OKRs and KPIs, and reach all your objectives in the most convenient and efficient way.
