OKR vs. KPI: Is it necessary to choose?

For every organization, objectives and the strategy to achieve them are fundamental. Let’s look at two goal-setting approaches — KPI and OKR, which help build a “roadmap” from the current reality to the desired future.

OKR (Objectives and Key Results) is a two-part system that includes an objective with one or more key results. The objective sets the direction of your efforts, while the key results are the indicators needed to reach the defined goal. OKRs are used to create, improve, or innovate and should be updated quarterly or annually to track progress and support development at new stages.

KPI (Key Performance Indicators) are metrics that have existed for almost a century and are indicators of a company's “health.” Many organizations use KPIs — and those that don’t often just don’t realize it ????. They are ideal tools for monitoring the current state of the business. There are many types of KPIs, and each is selected based on the needs of specific departments to evaluate the achievement of particular objectives.

Thus, OKRs and KPIs are different types of goals with different purposes. OKRs connect ambitions to reality, help create new growth conditions, and uncover hidden opportunities. KPIs, on the other hand, monitor the execution of current processes, overseeing how the business and its departments operate.

Both tools are effective when used together. Moreover, an OKR can become a KPI, and a KPI can be improved using OKRs. OKRs solve problems and drive improvement, while KPIs are ideal for monitoring business performance. To grow your company, you need both instruments.