How can OKRs and KPIs be combined? How they differ?

The OKR structure consists of “Objective” and “Key Results” written beneath it. You can coordinate the objectives and other departments of the organization thanks to OKRs. It is an approach that also emphasizes priorities and makes measurability smoother.

A key performance indicator, or KPI, is a metric that assesses how well an organization, team, person, or project is performing.  It is one of the key methods for determining whether your aims or goals have been attained.

While OKRs are used to create new things, enhance existing ones, or rebuild things, KPIs are utilized for what we refer to as “Business as Usual.”

  • A KPI evaluates the effectiveness, result, quantity, and standard of an ongoing process. The dream, the most important objective, is reached by using OKR.
  • KPIs are metrics that exist in a framework while OKR provides a strategic framework.
  • The KPI helps monitor performance and identify problems and areas for improvement. OKR helps solve problems, improve processes and drive innovation quickly and in an agile manner.

KPI examples

Here are some common examples of KPIs for various industries:

Retail Sector: Revenue per square ft, store sales, sales per employee

HR Department: Turnover rate, employee net promoter score, average hiring time

Sales Department: Customer lifetime value, sales revenue, number of customer visits

Technology Sector: Monthly recurring revenue, customer retention and churn, call resolution time

Health Sector: Patient waiting time, average treatment fee, number of training programs

OKR examples

Here are some examples of OKRs:

Objective: Creating value for all stakeholders by achieving sustainable growth

  • KR1: 5% increase in revenue growth in dollars compared to last quarter
  • KR2: To increase the total assets to 50 thousand dollars by ensuring the asset-liability balance until the end of the second quarter.
  • KR3: Increasing the return on tangible equity from 15.4% to 17%

Objective: To be the most preferred company by employees in our sector

  • KR1: Ensuring 5% improvement in employee engagement and employee satisfaction survey rates by the end of the year
  • KR2: Filling 30% of open positions with 5 talent programs designed to recruit the best young talents of the USA

As a result, KPIs and OKRs take entirely different tacks. They are not mutually exclusive. They help a company achieve the best results when used together. If you want to move forward with solid data and confidently walk towards your aligned goals, combine these two methods and make it easier to achieve success.