You may have heard of OKRs and KPIs before, but what do they actually mean?
In this post, we'll cover:
- What are OKRs and KPIs, and what do they stand for?
- What are the benefits of using OKRs over KPIs, or vice versa?
- Should you use both OKRs and KPIs, or just one of them?
- What's the best way to set up and track OKRs or KPIs in your organization?
Whether you're first engaging in the strategic planning process, or you're a seasoned veteran trying to decide which approach may be a better fit for a new challenge or upcoming project, read on for more on how OKRs and KPIs can be used independently or in tandem to achieve your goals.
What are OKRs and KPIs, and what do they stand for?
OKR stands for objectives and key results and refers to a system of setting objectives and measuring progress towards those objectives.
KPI stands for key performance indicators, or what metrics you measure to ensure you are making progress toward your objectives.
What’s the difference?
Both OKRs and KPIs can help ensure that you are making progress toward your goals. However, it is important to note that they are not the same thing.
OKRs are focused on objectives, while KPIs are focused on specific measures of performance. As a result, you may want to use both OKRs and KPIs in order to get a comprehensive view of your progress.
What are the benefits of using OKRs over KPIs, or vice versa?
Both objectives and key results (OKRs) and key performance indicators (KPIs) are important tools for measuring progress and setting goals. However, they serve different purposes and can be used in different ways.
Objectives focus on what a company intends to do, whereas Key Results concentrate on whether those objectives were actually accomplished; this distinction becomes critical when developing attainable future plans. Furthermore, Objectives should never change during set intervals but rather stay constant so employees have something stable to strive towards, unlike Key Results which may adjust due to fluctuations out of anyone's control.
KPIs are specific measures that can be used to track progress toward objectives. They can help ensure that you are making progress toward your goals, but they should not be used in place of objectives.
Another distinction is that OKRs are typically used to measure progress toward long-term objectives, while KPIs are more often used to assess short-term performance. For example, an OKR might be to increase market share by 10% over the next year, while a KPI might be to sell 100 units per week.
Because of their different focuses, OKRs and KPIs can be used together to get a more holistic view of an organization's progress. Using both types together provides users with greater insight into overall organizational efficiency; however, the correct tool must be chosen for any given task so as not to create confusion or produce irrelevant data sets, e.g., if you're trying to assess short-term performance, KPIs will be more helpful than OKRs.
- OKRs stand for objectives and key results, and they refer to a system of setting objectives and measuring progress towards those objectives.
- KPIs, on the other hand, are key performance indicators. These are specific measures that can be used to track progress toward objectives.
- Both OKRs and KPIs can help ensure that you are making progress toward your goals; however, it is important to note that they are not the same thing.
- OKRs focus on objectives while KPIs focus on specific measures of performance; as a result, you may want to use both OKRs and KPIs in order to get a comprehensive view of your progress.
OKRs or KPIs: What's the best approach for your organization?
When it comes to setting goals and measuring success, organizations have a few different options to choose from. So, how do you decide which one is right for your organization? Here are a few factors to consider:
Consider what you’re measuring
First, think about what you want to measure. KPIs are typically used to track progress toward specific objectives, whereas OKRs are designed to measure overall performance. If you're not sure what you want to focus on, KPIs may be a better option.
Understand how often you’ll be tracking progress
Second, consider how often you need to measure progress. KPIs are typically measured on a monthly or quarterly basis, while OKRs are usually measured annually. If you need more frequent feedback, KPIs may be the way to go.
Consider what data you have at your disposal
Finally, think about how much data you have available. KPIs typically require more data than OKRs, so if you're working with limited data, OKRs may be a better option.
No matter which framework you choose, the important thing is that you're clear about your goals and how you're going to measure progress. If you take the time to consider all of the factors involved, you'll be sure to choose the right option for your organization.
Should you use both OKRs and KPIs, or just one of them?
There's no one answer to the question of whether you should use both OKRs and KPIs or just one of them. It depends on your objectives and what you're trying to measure. If you're not sure which approach is right for you, it might be helpful to talk to a business consultant or try out both methods to see what works best for your company.
For example, say Alphabet Inc.'s objective was becoming the most visited website worldwide within five years; some potential Key Results could include the number of webpages views per day or total minutes spent browsing the site. In this way, Objectives provide a broad overview where Key Performance Indicators give tangible evidence of how close team members are to meeting the end goal even if unforeseen circumstances disrupt the original game plan along the way.
What's the best way to set up and track OKRs or KPIs in your organization?
There are a few different ways to set up and track objectives and key results (OKRs) or key performance indicators (KPIs) in your organization. Whichever method you choose, it's important to make sure that everyone in the organization is aware of the OKRs/KPIs and knows how to update them.
If you’re going to use OKRs, Mural offers a free (and editable) template to help get you started, which includes pre-built sections for each part of the OKR framework.
For KPIs, Mural offers a Product KPIs guide to walk you through each step of the process, including a free business model canvas template linked below.
Periodically, you should review the OKRs/KPIs with your team or department to discuss progress and identify any areas that need improvement. This will help keep everyone on track and ensure that the objectives are still relevant. By tracking OKRs/KPIs regularly, you can stay on top of your organization's performance and make sure that everyone is working towards common goals.
Related: How to Create Better Team Alignment
So, what's the verdict? OKRs or KPIs?
The answer is... it depends. What's most important to your organization? What will help you achieve your goals most effectively? If you're not sure, that's okay! We can help you figure it out. Mural is the perfect platform for project planning, creating a winning strategy, and unlocking innovation, so you can make the best decisions for your team.
Get started today with a Free Forever account, and invite unlimited guests and members, so everyone has visibility into your strategic planning process.
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