KPIs vs OKRs: Which One is Your Compass and Which One is Your Speedometer?
In this article, we’ll explore the difference between KPIs and OKR framework, their unique features, and how they can be used together to steer your organization towards its business goals. Whether you’re looking for a compass to guide your direction or a speedometer to measure what matters and your progress, read on to discover which metric is right for you.
Tracking Success: How KPIs Help Navigate Business Performance
KPIs, or Key Performance Indicators, are metrics that measure what matters when it comes to the health of an organization. They don’t show you a path or progression, but they tell you that the pulse is still there and working as expected. Think of KPIs as a speedometer for a vehicle. It shows how fast you’re going and how much fuel you have left. Similarly, KPIs provide an overall picture of how the organization is performing and track progress over time. They help determine if the organization is meeting its smart objectives and identify areas that need improvement.
OKRs – Your Compass for Guiding Organizational Performance
OKR framework, or Objective and Key Results, are another way of measuring the success of an organization. Instead of providing insight if the pulse and status is ok, OKRs are designed to build a path for an organization and measure and coach its progress along the way.
Think of objective and key results as a compass that guides the organization towards its business goals. The smart objective is the destination, where the organization wants to go, while the key results are the checkpoints along the way that tell the organization if it’s on the right track. As the organization passes each checkpoint, it knows that it’s getting closer and closer to its business goal.
OKR KPIs vs OKRs – Which One to Use When?
KPIs and OKRs serve different purposes and have distinct applications. Using multiple KPI gives an overall picture of how the organization is performing right now (status), while objective and key results are used to measure what matters and guide change in performance (progress change). KPIs show how an organization is doing in relation to time, while the OKR framework shows how the organization is doing in relation to its goals.
KPIs are useful for identifying trends and patterns over time. They provide a snapshot of how the organization is doing and help in identifying areas that need improvement. Objective and key results, on the other hand, provide a clear sense of direction and enable organizations to track their progress towards their smart objectives.
Using Objective and Key Results and KPIs Together – A Winning Combination
While KPIs and OKR framework serve different purposes, they can both be used together to help steer an organization towards measuring what matters and achieving its business goals. By using both metrics, an organization can compare its current status to where it wants to be and take steps to close the gap. Again, KPIs provide an overview of how an organization is doing over time, while objective and key results provide specific guidance towards achieving specific smart objectives.
Ready to measure what matters and take your organization’s goal setting to achieve business results to the next level?
Start by identifying your KPIs and OKRs. Use KPIs to track your progress over time and identify areas that need improvement, and implement the OKR framework to provide specific guidance towards achieving your smart objectives. With this winning combination, you’ll be well on your way to achieve your business goals.