OKR vs. KPI: Similarities, Differences and Examples
By Indeed Editorial Team
Updated 1 December 2022
Published 27 April 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
If you're interested in tracking progress during your career, you can measure the performance of a business, team, project or individual to find strengths and areas of improvement. You can use various criteria to understand the performance, including key performance indicators (KPIs) and objectives and key results (OKRs). Understanding the difference between OKR vs. KPI can help you pick the criterion that's right for your goals. In this article, we explain what OKRs and KPIs are, explore their similarities and differences, list examples, analyse the importance of measuring performance and answer commonly asked questions about them.
OKR vs. KPI
When comparing OKR vs. KPI, it's helpful to review the definitions of each. KPIs are numbers that show how effectively the entity moves towards set targets. KPIs help organisations, teams, departments and individuals set definitive objectives and monitor their progress as they pursue them. Most companies' KPIs reflect the periodic growth of different business metrics and revenue targets. These targets can be annually, monthly, daily, quarterly or hourly. Organisations use KPIs to analyse past performance and predict the future.
OKRs are strategic frameworks that help entities establish objectives and quantifiable key results that support each objective's achievement. Companies can use OKRs to communicate desired outcomes, prioritise areas for improvement and deliver essential results for the entity. OKRs often reflect objectives or areas for improvement that can help the organisation achieve KPI targets. Organisations can use key results to develop initiatives that help them pursue their objectives.
OKR and KPI similarities and differences
Here are the similarities and differences to help you compare OKRs and KPIs:
Similarities between KPIs and OKRs
OKRs and KPIs can have these similarities:
They're both specific, measurable and clear.
They require users to prioritise a few of each essential criterion. This is typically eight to 12 KPIs and three to five key results.
You can have KPIs or OKRs for organisations, teams, departments, positions, projects or individuals.
They can help you manage an organisation by aligning stakeholders around clear measures of success and well-defined targets.
Differences between KPIs and OKRs
Here are the differences between KPIs and OKRs:
OKRs are action-oriented targets called objectives and their measures are key results, while KPIs are numbers or metrics that assess progress.
OKRs are directional and future-focused, while a KPI can be a leading indicator or result.
OKRs can be bold and aggressive to help the organisation pursue strategic targets, while KPIs monitor the progress and provide benchmarks that prompt actions if the company can improve.
OKRs have a specified timeline and change periodically as you progress, while an organisation may assess KPIs continuously as the organisation's targets change.
Importance of measuring performance
Measuring and reviewing performance can be the best way to improve during your career. Setting and reviewing individual objectives periodically enables you to develop professionally. For example, if you work in customer service, you may make an objective to increase your customer satisfaction rating, and you can track this metric over time to assess whether you're successful. If you're not reaching your objective, you can create a plan to improve.
Measuring performance can also help you answer stakeholders' questions, depending on your role. Managers, project leaders and employees may pursue set targets for the business. Measuring performance enables them to know their progress and update stakeholders. These stakeholders can continue to support the company if they understand its performance.
Examples of KPIs and OKRs
Here are some examples of OKRs and KPIs:
Here are some KPIs examples for various teams:
Sales KPI examples
A sales team may have KPIs like this:
the number of new leads per month is 500
average order value is $100
lead response time is 2 days
lead conversion rate is 4%
upsell is 50%
average sales cycle time is 3 months
Marketing KPI examples
A marketing team can have these KPIs:
the number of MQLs (marketing qualified leads) is 800
the number of SQLs (sales qualified leads) is 80
cost per lead is $100
monthly organic traffic to a site is 120,000 new visitors
conversion rates from a site visitor to a lead is 15%
CLV (customer lifetime value) is $900
Customer success KPI examples
A customer success team can use these KPIs:
customer churn rate is 5%
ARPU (average revenue per user) is $1,500
FRT (first response time) over chat is 2 minutes
CRC (customer retention cost) is $100
CSAT (customer satisfaction score) is 80%
NPS (net promoter score) is 70
Product management KPI examples
A product management team can have these KPIs:
the number of DAU (daily active users) is 1,000
retention rate is 20%
on-time delivery (each release) is 10 days
session duration is 15 minutes
number of user actions per session is 15
bounce rate is 30%
Here are some examples of OKR:
Sales OKR examples
A sales team's objective can be to use a personalised sales approach and nurture prospects better. The sales team's key results may include the following:
KR1: Increase follow-up email open rate from 13% to 40%
KR2: Increase the touchpoints with a lead from 2 to 5
KR3: Reach a 7/10 average rating on a customer satisfaction survey with over 100 responses
Marketing OKR examples
A marketing team's main objective can be to use social proof to improve reputation and increase credibility. Marketing team key results can include:
KR1: Get at least 10,000 views on the testimonials webpage
KR2: Reach an average CTR (click-through rate) of 15% in the communication campaign
KR3: Increase social media shares from 200 to 1,000
KR4: Reduce the average acquisition cost per client from $200 to $50
Customer success OKR examples
A customer success team objective can be to increase new paying customers' engagement. The customer success team's key results may include the following:
KR1: Increase the open rate of the in-product communication from 3% to 20%
KR2: Increase the number of follow-up sessions booked from 5 to 20 per week
KR3: Achieve a service quality rating of 8/10 in the after-meeting poll
KR4: Reduce the average response time from 10 hours to 2 hours
Product team OKR examples
A product team's aim can be to increase product engagement. An organisation's product team's key results may include the following:
KR1: Increase the average session duration from 15 minutes to 25 minutes
KR2: Analyse competitors' offerings and execute top 3 improvement ideas
KR3: Increase the average daily activity per client by 12%
Frequently asked questions about KPIs and OKRs
Here are some frequently asked questions about KPIs and OKRs:
What are the benefits of OKRs?
OKRs can create intense focus and teach teams or individuals to be result-oriented. They can help them embrace initiatives and have a unified understanding of success. OKRs can also align the organisation and move stakeholders in the same direction by enhancing transparent and effective communication processes. OKRs can also help teams drive innovation, improvement and growth by supporting organisational objectives and improvement areas.
How can I get my colleagues or team members to embrace OKRs or KPIs?
If your colleagues or team members are hesitant about new KPIs or OKRs, you can use various strategies to onboard them. Inform them of your reasons for introducing these criteria, get their feedback, guide them if they have concerns and answer their questions. You can also hire a professional to train your team members or colleagues about KPIs and OKRs. Onboarding your colleagues can help them accept these criteria and be proactive when implementing them.
How can I define my KPIs?
You can define your KPIs by determining the needs they address, aligning indicators with the entity's objectives and strategy and deriving action plans from indicators. Good KPIs can help you identify the right actions to improve them and the company. Actionable KPIs reproduce the organisation's most essential objectives numerically.
Can you use KPIs and OKRs together?
You can use OKRs and KPIs together. KPIs can help you find areas of improvement, while OKRs highlight a focus area and measurable outputs to prioritise to achieve those improvements or solutions. Analysing the performance against KPI targets enables you to understand your progress. The numbers may require objectives and key results to improve your performance. OKRs highlight where to concentrate your resources and steps to help you actualise your objectives. If you miss your KPI target, you can use OKR to achieve the expected performance.
Should I use OKRs and KPIs?
Which one you choose can depend on your goals. KPIs may be the better alternative if you wish to scale or improve a previous project or plan. KPIs are straightforward and enable you to add quantification to your current processes and projects. OKRs may be the better choice if you have a bigger vision or wish to change your direction. These strategic frameworks have a greater depth that enables you to stretch your target further and be creative in your plan to pursue them.
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