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How are OKRs different from KPIs?

OKRs (Objectives and Key Results) and KPIs (Key Performance Indicators) are both ways to track progress towards specific goals, but there are a few key differences between the two.

One difference is the level at which they are used. OKRs are typically set at the organizational level, and are used to align the efforts of all teams towards a common vision. This means that OKRs are often broad and abstract, and focus on long-term outcomes rather than specific tasks or projects. For example, an organization’s OKRs might include objectives like “Improve customer satisfaction” or “Grow market share,” and key results such as “Increase customer satisfaction score by 5% in Q3” or “Capture 10% of the target market within the next year.”

KPIs, on the other hand, are typically used at the department or team level, and are focused on specific metrics that help teams measure their progress towards specific targets. These targets might be set by the organization, but are more often defined by the team itself. For example, a sales team’s KPIs might include metrics like “Number of sales closed per month,” “Average deal size,” or “Lead response time.”

Another difference is in the way they are measured. OKRs are typically measured as a percentage of completion, with the goal being to reach 100% by the end of the specified time period. This means that even if an organization doesn’t fully achieve its OKR, as long as there has been progress made towards the objective, the OKR is considered a success. KPIs, on the other hand, are often measured in terms of specific targets or thresholds. For example, a KPI might be “Increase website traffic by 50% in Q3,” and the team would be considered successful if they reach that target or exceed it.

Finally, OKRs are generally more forward-looking, as they focus on the goals and outcomes an organization wants to achieve. KPIs, on the other hand, are often used to measure past performance and track progress towards specific targets. This means that OKRs are typically set at longer intervals (e.g. quarterly or annually) while KPIs are often measured on a more frequent basis (e.g. monthly or weekly).

In summary, both OKRs and KPIs can be useful tools for tracking progress and measuring success, but it’s important to understand the differences between the two and use the appropriate tool for your specific needs. OKRs are best used for setting broad, long-term goals at the organizational level, while KPIs are better suited for tracking specific metrics and targets at the department or team level. So, it is very important to understand the difference between OKRs and KPIs and use them effectively in order to achieve your goals.