OKR vs KPI? Which one is critical for your organization?

Both OKRs and KPIs are powerful tools available for organizations for effective Goal Management. However there are often questions on when and how to use both of them. Below are some of the common questions that we come across often?

What are KPIs? How are they used?

Key Performance Indicators are the key metrics that help to track health or performance of an organization, team, project or an individual. KPIs help to set clear targets and continuously monitor the progress. Metrics that are critical should only be considered as KPIs. KPIs help to measure the success of anything from a project or individual process.
KPIs are only as effective as the action it inspires. Each company is unique and it is important to identify the right KPIs that help them achieve the targets set for their organization.

KPIs helps organizations

  • Focus on the things that are important
  • Track the health
  • Make adjustments
  • Accountability

How is OKRs different from KPIs

OKRs are a Goal Management methodology or a framework that helps organizations to manage and align their goals while KPIs are measures that track progress and success of specific activity or process.

OKRs can be inspirational, aggressive and ambitious that are meant to push companies forward towards aggressive growth while KPIs are generally attainable targets.

OKRs works well with larger vision and moving companies towards its strategic goals, KPIs are about tracking success of specific targets.

In Spite of their differences, OKRs and KPIs work really well hand in hand and can help in an organization’s growth. KPIs can be used within OKRs to track specific objectives. OKRs can also be used to improve a KPI.

Why need OKRs when you already use KPIs?

OKR helps to align everyone towards the strategic goals, KPIs are for tracking specific objectives

OKR is focussed on business outcome while KPIs are focussed on specific results

OKR also works well when there is a larger vision or change in the strategic direction of an organization. OKR can help organizations execute big major changes and help break out of the status quo.

Sometimes OKRs and KPIs overlap but both are critical to an organization and serve different purposes. KPIs help to monitor performance and health of the critical measures which will help to identify need for improvement while OKRs help to improve processes, drive innovation and achieve faster growth. OKRs and KPIs complement each other and can help organizations realize their strategy.

Examples of KPIs and OKRs

KPI for Sales

  • No of closed details this quarter
  • Deals closed per Sales Rep
  • No of lost opportunities

OKRs for Sales for a specific quarter

  • Increase the number of close deals by 10%
  • Improve Sales enablement Process
  • Reduce number of lost opportunities by 20%
  • Increase average deal amount by 2K

OKRify – OKR Goal Management and Strategy Execution Application for Salesforce provides the ability to manage and track OKRs and KPIs at organization, team or individual levels. OKRify provides the most intuitive user friendly solution in Salesforce for both OKRs and KPIs. KPIs can be based on any standard or custom salesforce objects and can be easily added for a user or a team to constantly monitor important metrics. OKRify seamlessly connects OKRs and KPIs and also provides the ability to track key results for an OKR using KPIs.
Effective use of OKRs and KPIs requires consistent communication between management and employees, tools such as OKRify can help to optimize the use of OKRs and KPIs by integrating with business processes in Salesforce. OKRify also helps management to effectively discuss progress, share feedback and identify risk or opportunities.