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Prioritization

OKRs vs KPIs

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OKRs vs. KPIs: What’s the difference?

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OKRs vs KPIs

OKRs and KPIs are both common and effective ways to measure performance. They’re often used in conjunction with each other, which can blur the lines between them. Key Performance Indicators (KPIs) are measurable numerical targets businesses use to work towards specific goals. Objectives and Key Results (OKRs) can be numerical targets but can also represent inspirational targets.

Let’s dive a little deeper into OKRs, KPIs, and their differences.

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What are OKRs?

Objectives and Key Results are a way to measurably align individual performance with overall goals.

It’s a reliable way to boost your team’s efforts and ensure long-term goals are met. 

A well-defined OKR will include an objective, which is your overall goal, and one or more key results that you will use to identify when you have achieved that goal. 

It’s best to use OKRs when your company wants to achieve expansive growth, energize complacent teams when KPIs aren’t working, or when you have other ambition-based goals.

What are KPIs?

A Key Performance Indicator is a measurable value that aligns directly with an overall goal or business objective. The KPIs you use will vary depending on your goals. You need to choose KPIs that will support long-term goals, whether you’re working with a small team or working towards objectives that affect the entire business. 

Well-defined KPIs should be quantifiable using real-world metrics like percentages or a target number. They should be clearly linked to the overall goals of your business and be simple enough to be understood by anyone in or outside of your business. 

KPIs are best used when a business has a clearly defined and measurable goal. This can include staying the course, verifying business sustainability, or even measuring past performance. 

Can OKRs and KPIs be combined?

Absolutely! The majority of the confusion between OKRs are KPIs stems from their ability to be combined.

Both measurements have a different focus and can give you a much more accurate indication of success when used together.

Examples of OKRs and KPIs

The simplest way to understand the difference between OKRs and KPIs is by looking at examples of when each is used. Here are some common examples of when to use OKRs and when to use KPIs.

Examples of KPIs

  • Number of new subscribers per period

  • Growth in revenue

  • Percentage of market share

  • Time to market

  • Employee satisfaction

  • Monthly website traffic

  • Conversion rate

Examples of OKRs

Objective: Improve our sales performance

Key result: Increase conversion rate from 20% to 25%*

Key result: Improve follow-up communication with leads

Objective: Increase brand awareness in new markets

Key result: Increase web traffic in target markets by 15%* 

Key result: Increase newsletter signups by 25%*

*These key results can also be used as KPIs.

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Tips and best practices for setting OKRs and KPIs in product management

Set SMART goals

SMART goals are goals that are Specific, Measurable, Attainable, Relevant, and Time-Bound. SMART goals ensure that all metrics are clear, focused, precise, and easy to understand.

Don't try to track everything

It’s worth remembering that the K in OKR and KPI stands for “Key.” This is important because you could spend months chasing KPIs and OKRs that don’t add any value to your business. Only try to track things that actually matter.

Regularly review your OKRs and KPIs

Product management is a rapidly changing area, and you should review your goals regularly to ensure they’re still relevant and add value.

OKRs vs. KPIs

General FAQ

How are KPIs and OKRs different?
KPIs are used to measure quantifiable goals, while OKRs can also be used for inspirational goals.
Can OKRs and KPIs be combined?
Absolutely. Both measurements have a different focus, and they can give you a much more accurate indication of success when used together.
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Mastering Prioritization
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Glossary categories

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