Let’s begin our study with general definitions of each abbreviation. So, KPI (key performance indicators) are key performance indicators, the goals in KPI are specific and achievable.
OKR (Objectives Key Results) is a methodology for setting and achieving ambitious goals.
OKRs and KPIs can be set at the company, team or group of departments level, or at the individual level.
Key differences between OKRs and KPIs.
• OKRs are used to manage change and innovation, while KPIs are used to manage processes.
• Unlike KPIs, OKRs are not part of compensation/pay
• OKR principle: no more than three to five goals.
• KPIs must always be 100% achieved.
• OKR achieved at 70% is cool.
• KPIs are not open at all levels in the company
• OKRs should be open within the company and always publicly available to employees
• OKRs can be implemented both top-down and bottom-up, but KPIs are organized only top-down
Therefore, it is important to understand that OKRs and KPIs are different: OKRs are about ambitions that should contribute to a breakthrough in business, while KPIs are about maintaining the planned positions that we set for ourselves. Having implemented both approaches in the company, it is extremely important to distinguish between them and take into account the peculiarities and ultimate goal of each of them.