In our first article on the Definition of KPIs and OKRs, We have already discussed (through concrete examples around digital marketing) the differences in approaches between Key Performance Indicators and the Objectives & Key Results.
Let us state at the outset that OKRs do not replace KPIs. Both, with their specificities, allow for measuring and monitoring the performance and achievement of an objective. Both are therefore adapted to organizations aiming for strong growth in a context of acceleration.
In practice, these indicators prove surprisingly complementary depending on the measures or objectives pursued. Discover below how to make the most of these tools, with a complete comparative table of their characteristics!
The commonalities between OKRs, KR and KPIs
KPIs (Key Performance Indicators) and OKRs (Objectives & Key Results) share similarities that lead to some confusion between the two approaches:
- KPIs and OKRs can be used in organizations of all sizes and apply to the entire company, teams, employees, and projects.,
- The «K» in these two acronyms means « key »(key) which implies that focus on strategic priorities to support the company’s growth,
- KPIs and KRs (« Key Results«Key results) must be quantifiable, clear and precise to enable measure progress and performance in order to align all employees on common objectives.
« It’s not a key result unless it has a number.* »
Marissa Mayer, former VP of Google & CEO of Yahoo!
*it’s not a key result unless it’s quantified
OKR and KPI methods: what are the complementarities?
Different approaches to drive performance
As detailed in our first article, the Objectives & Key Results and the Key Performance Indicators They operate under different logics :
- OKR are a method, a concise and representative framework for the company’s strategy to inspire and moving from vision to execution, Whereas KPIs are quantified indicators used to measure and monitor the performance of a particular project or action,
- OKR are focused on strategic objectives with indicators called key results (KR) representing performance, the «return on investment», the Path towards achieving the goal, while KPI are metrics for monitoring these performances at a key moment at time T,
- Since the OKRs are deliberately ambitious, the KR targets overachievement – the achievement of a certain level of performance. Key Result At 70, success % will be considered achieved as long as the ambition is high – whereas the KPIs are more realistic with indicators usually being reached at 100 %.
« One must always aim for the moon, because even in the event of failure, one lands among the stars. »
Oscar Wilde
These different approaches also highlight the complementarities between OKRs and KPIs, since OKRs can include KPIs as measures of key results, becoming indicators in service of achieving the OKRs!
Complementarity between OKRs and KPIs: examples in marketing
Let’s return to our examples in the world of marketing to better understand them. How to measure the KR (Key Results) based on the KPI.
⬜ Key marketing objective: ”Our marketing is a desirable catalyst for the growth of our communities” (period from January to March)
| Examples of KR (Key Results) | Associated KPIs (measure of the progression of the KR) |
|---|---|
| % 50 active subscribers to the new newsletter every month over the period | Open rate >= 50 % (non-robot openers) (monthly measure in the email tool) |
| +10 % members on our LinkedIn page every month over the period | 50 new subscribers in the first quarter (monthly measure in LinkedIn) |
| 100 “incoming” requests per month thanks to the enrichment of our 2-course curriculum Lead nurturing enriched over the period | 3 new content per journey, that is 6 content per quarter (monthly measure in the marketing automation tool) |
| 5% of the website’s audience came from the campaigns retargeting at the end of the period | 1,000 unique visitors cumulatively at the end of the quarter (monthly measure in Google Analytics) |
⬜ Key marketing objective: ”The web is our primary source of lead generation” (period from January to March)
The differences between OKRs and KPIs (comparative)
Here is a summary table comparing OKRs and KPIs to help you become proficient in both these specific yet complementary approaches!
| OKR (Objectives and Key Results) | KPI (Key Performance Indicators) | |
|---|---|---|
| Perimeter | Management method that enables defining and implementing the company’s, teams’ and employees’ priority objectives by concretely measuring the results achieved | Indicators that measure the performance of individuals, teams, or projects by tracking progress and working through a measurement system |
| Objectives | The objectives are not quantified. They must be ambitious and inspiring.
The Key Results must be measurable and have a time limit. |
The measures are realistic, achievable, results-oriented, and designed to achieve a task successfully. |
| Timeliness | The KR are reviewed periodically, usually every three months | KPIs are generally calculated on a continuous basis. |
| Efficiency | The Key Results measure progress towards the target rather than its achievement and are adjusted periodically. | Metrics change less frequently, but objectives can change |
| Transparency | The OKRs are transparent within the company and for all team members. | KPIs may be less transparent and communicated more restrictively |
| Performance | OKR are not a HR evaluation tool or a variable remuneration system | KPIs are generally reviewed during performance reviews |
In conclusion, OKR and KPI are two effective tools for measuring performance and staying in a dynamic of continuous improvement. They are suitable for any type of organization, team, or individual. While each has its own specificities and is used based on the desired objectives or measures, they remain complementary, even… inseparable! Together, OKR and KPI will be more effective in measuring overall performance while aligning the entire company with common goals.