OKRs vs. KPIs with examples
If you’re looking at shifting from a traditional KPI (key performance indicator) and metric-based system to an OKR (objectives and key results) goal management system, you may be wondering how to get started and how to differentiate your KPIs from OKRs.
For starters, OKRs don't replace KPIs, they complement and utilize them. KPIs correspond to the detailed work within an organization that facilitates the delivery of their projects. OKRs are the major elements of the corporate strategy that need to be accomplished to deliver the mission and vision consistent with the values.
For example, there are numerous KPIs that track the development team's progress toward a specific product release. While all of them are important to deliver the product, what is important to the corporate strategy is the actual product delivery milestone. That milestone would roll up to a specific key result for the objective of a product launch. This is what matters to the success of the company, and is the event with which marketing, sales, and support need to align their deliverables.
At the same time, the sales and customer success teams want to achieve a particular objective of 98% customer satisfaction or 1% turnover. They may have as one of their KPIs to do QBRs and/or customer surveys. Planning and executing those may entail multiple intermediate KPIs, but the actual completion milestone would roll up to a key result that supports the corporate customer satisfaction objective.
The goal is to enable executive management to efficiently manage, and clearly understand the progress towards, achieving their key objectives by viewing a concise set of information (OKRs), rather than a large, complex stream of data (KPIs).
If you’re finding that KPIs and key results are overlapping, remember that a key result is an outcome, and a KPI is a measurement.
- Unrealistic or ambiguous
- Task lists
- General action you plan to take
- Overly specific to be constraining
Learn about red flags to watch for when rolling out an OKR program here.
- A measurement that gauges performance
- Can roll up to a key result
- An outcome
Sales OKR example:
Objective: Increase sales funnel by 35% by Q4
- Number of salespersons increased by 2.5 times by Q2
- Monthly 12,000 active prospects in sales funnel
- Daily 30 lead conversions
Objective: Increase nationwide reach of product by 35% by Q4
- Distribution channel expanded to become 2nd largest in the nation
- Sales expanded to 1 new state every month
- E-commerce website created to expand the reach of product
Sales KPI examples:
- Monthly sales growth
- Visitor-to-lead conversion rate
- Sales cycle length
Marketing OKR example:
Objective: Become No. 1 standalone goal management product by 2020
- Number of MQLs increased by 1,500 per month
- Revenue increased at CAGR of 42% every quarter
- Increase market reach by 35%
- Landing page conversions
- Cost of customer acquisition
- Website traffic
- Blog post visits
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