Method

OKR vs KPI

KPIs show the state of health – the pulse of the business. OKRs set a focus for one cycle and change exactly one part of it. Playing them against each other costs you one of the two – here is what separates them, how they work together, and how to spot the usual mix-up.

In short

The difference in one sentence

A KPI is the state of health, an OKR the focus for this cycle.

KPI – state of health, the pulseA key performance indicator permanently measures a number that matters to your business: revenue per customer, utilisation, error rate, attrition. It keeps running whether you are working on it or not, and usually has a normal range rather than a target. That is exactly why KPIs are also health indicators: they show whether the business stays healthy while you work on something else.
OKR – focus and intentAn OKR set describes what you want to change over the next three months or so: an objective as the target state, key results with a baseline and a target. Then the set ends – the metric stays, the intent does not.

Rule of thumb: if you would stop tracking a number once it is good, it was a key result. If you keep watching it, it was a KPI.

Comparison

OKRs and KPIs side by side

The same numbers, a different role.

AspectKPIOKR
Purposemeasure and monitor a statedeliberately change a state
Role in the cyclehealth indicator: must not get worse while you work on the focustarget for change: this is where you want to move something
Horizonpermanent, often across yearsone cycle, typically three months
Number of thema handful per area, easily dozens across the companyone objective with up to four key results per team and cycle
Targeta normal range or threshold ("below 3%")a baseline and a target for this cycle ("from 46% to 65%")
Where it comes fromthe business model and steering, often set top-downderived from strategy and written by the team itself
Ambitionrealistic, plannabledemanding; 70–80% achievement counts as success
Link to payoften part of individual targetsdeliberately not – otherwise goals get written smaller
Rhythmdashboard, monthly or continuous reportingplanning, weekly check-in, review and retro
What happens afterit keeps runningthe set ends, the learning goes into the next one
Together

How the two work together

KPIs provide the trigger, OKRs the change.

In practice a good OKR cycle starts at the KPIs. You look at the dashboard and see which number is out of range, or which one matters most for the strategy of the coming years. That exact KPI becomes a key result for one cycle – with a baseline taken from the dashboard and a target you commit to. Once the cycle is over, the number slides back into monitoring.

The remaining KPIs deliberately stay outside the set and act as health indicators: they are not the focus, but they must not deteriorate either. If first contact resolution climbs while satisfaction drops, you hit the goal and weakened the business anyway – which is why the weekly check-in also looks at the numbers you did not commit to.

That is why the OKR canvas has its own field for up to three key performance indicators above the OKR set. A set never stands on its own; it sits below the strategic initiative and the metrics it was derived from – see the page on the OKR template.

Example: a KPI becomes a key resultThe KPI "first contact resolution" has been at 58% for months, below your own standard. For one cycle it becomes the key result "first contact resolution increased from 58% to 75%". After that it is a dashboard number again – hopefully at a higher level.
Example: a KPI stays a KPIYou watch attrition permanently. As long as it stays in range it does not need an OKR. A team working on onboarding instead takes a key result such as "share of new colleagues able to work independently after 30 days increased from 54% to 85%".
Terms

Key result, KPI, metric and task

Four words that get mixed up every day.

TermWhat it isExample
Metricsomething measurable, without a judgement attachednumber of first conversations per month
KPIa metric you track permanently because it matters for steeringfirst conversations per month, live in the sales dashboard
Key resultan outcome metric with a baseline and a target for exactly this cyclemeeting acceptance rate in the existing base increased from 9% to 20%
Outputwhat you ship – never a key result, always part of the tasksconversation guide finished, CRM rolled out
Taskthe work you do to move the key resultwrite a conversation guide, run two pitch trainings

So the same number can be a KPI or a key result depending on its role. What decides is not the metric but what you intend to do with it.

Pitfalls

The usual mix-ups

Where OKR rollouts fail in the first year.

Complete sets with objective, key results and tasks for six areas are on the OKR examples page.

From metric to key result

The KR & KPI Assistant in OKR Companion suggests fitting metrics and benchmarks for a goal, and the OKR Goal Assistant turns them into written key results. Free to try, no credit card.

Get started

The method behind it – metric logic, how an OKR set is built and how the cycle runs – is covered in the book “OKR compact”*.

* The book link is an Amazon affiliate link – as an Amazon Associate we earn from qualifying purchases.