A brief explanation of the different between OKRs and KPIs, and how KPIs can help you set better OKRs.
What's the difference between OKRs and KPIs?
Should OKRs replace KPIs? The simple answer is no.
There can be some confusion between the two are sometimes your Key Results will re-use some of the metrics that you have in your KPIs. But the purpose is different.
- KPIs: they're a stable set of metrics that helps you track the health of your business.
- OKRs: they change every quarter to help you improve a specific part of your business.
KPIs = monitoring general health
A KPI dashboard is usually a metric-based representation of your user journey. How many people sign up, engage with your product, convert, etc... There's no real qualifying statement such as "Improve retention by XX%". But it helps you keep an eye on your metrics and see when things change abruptly.
KPIs should also be stable through time to allow you to observe long-term movements. It wouldn't make sense for you to change your dashboard every quarter—which is something that is almost a requirement for OKRs.
OKRs = strengthening aspects of your health
The general confusion between KPIs and OKRs comes from the fact that OKRs may sometimes use the same metrics as your KPIs. But the intent is different as the goal is to improve said metrics to establish new baselines: "Our activation rate increases from 23% to 45%".
It may sound similar, but the purpose is quite different. This is also why your OKRs, unlike your KPIs dashboards, will change often—you move your focus from one set of metrics to the next one.
Having KPIs will make OKRs-setting easier
You should absolutely keep your KPIs dashboard along with your OKRs. Having a clear set of KPIs (along with a vision doc) will make it easier for people to create their first OKRs plan.
Data is not everything, but it will provide a solid anchor to start the goal-setting discussions.
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