OKRs vs KPIs: what’s the difference?
A KPI is a number you keep an eye on all the time, like the speedometer in a car. An OKR is a goal you’re chasing for a stretch of time: one objective in words, plus two or three key results that prove you got there. KPIs tell you how things are going. OKRs say what you’re trying to change.
What a KPI is
KPI stands for key performance indicator. It’s a number that tells you whether something is healthy. A store watches daily sales. A support team watches how long people wait for an answer. A school cafeteria could watch how long the lunch line takes.
Nobody finishes a KPI. You check it every week, and you start asking questions when it moves the wrong way.
What an OKR is
OKR stands for objectives and key results. The objective is the problem you’re trying to solve, in plain words: “Students get lunch fast enough to eat it.” The key results are the numbers that have to be true when you’re done: “Median wait under 5 minutes” and “Nobody waits longer than 10.”
Two or three key results, not ten. And the team chooses them, because the team is the one that has to move them.
The cafeteria manager wants the line fixed. Build the OKR the crew should take on: pick the objective, then the two key results that would prove it.
This is the same exercise that’s in the app.
Step 1 · Pick the objective
Step 2 · Pick two key results
Your OKR
- Objective
- …
- Key results
- …
Notice what the OKR doesn’t say
It doesn’t say “build an app.” A good OKR describes the change you want and leaves the answer open. The boss’s app idea might be the answer. So might a second register, or a cart by the door. That’s the point: an outcome gives the team room to find the cheapest thing that works.
How they work together
A KPI is always on.
The lunch-line wait is something the cafeteria could watch forever.
An OKR is a push.
For one semester, the team takes that KPI and makes it a key result: get the wait from 12 minutes to under 5.
When the push ends, the KPI stays.
The OKR is done. The number keeps getting watched, so if it creeps back up months later, somebody notices.
A quick test for a key result
Ask whether it could be done and nothing would have changed. “Launch the app” can be done with the line still at twelve minutes, so it’s a task, not a result. “Median wait under 5 minutes” can’t be faked that way. Tasks are things you finish. Key results are things that have to be true afterward.
Questions people ask
Can a KPI be a key result?
Yes, and it often is. A KPI is a number you watch all the time. When a team decides to move one on purpose for a quarter, that KPI becomes a key result in their OKR. When the quarter ends, the OKR is finished and the KPI goes back to being watched.
How many key results should an OKR have?
Two or three. One usually misses part of what the objective means, and more than three turns it into a to-do list nobody reads. If you need five numbers to describe the goal, the goal is probably two goals.
Learn it by doing it
The app teaches OKRs in Module 6, Problems to Solve, Not Features to Build, and KPIs in Module 9, Numbers That Matter (and Ones That Flatter).
Product Management is a course for curious teens, in five-minute lessons with something to play with in every one. Part I is free on iPhone, iPad and Android. No account, no ads.