How Are OKRs and KPIs Similar?

How Are OKRs and KPIs Similar?

The OKR system, which stands for Objectives and Key Results, is a goal-setting system made popular by John Doerr, a venture capitalist that implemented such systems with great success into many Silicon Valley tech companies.

OKRs are the representation of a company’s choice of how they allocate time and energy and allow you to coordinate the actions of individuals, teams, and departments to achieve the company’s overall goals. They’re used to plan goals, coordinate priorities, track progress, and stay focused, and are what an organization agrees needs special attention because of the value they add.

KPIs are a navigational tool that helps organizations understand whether a department, team, or project is on track to accomplishing its objectives. They help your company focus on what matters for optimal strategic and operational improvements. They also create an analytical basis for decision making, directing teams and individuals within an organization to accomplish goals based on tangible numbers: data and metrics. Of course, to be able to measure a KPI, goals must be set. After all, how can you track progress, if you don’t know where you’re going?

KPIs also link an organization’s overall vision to an individual employee’s action, increasing engagement and commitment by departments, teams, and individuals.

If the two sound very similar, that’s because they are:

  • Both track progress towards a goal
  • Both should be limited in number (key word is ‘Key’), so organizations can truly focus on what matters, and prioritize.
  • Both require frequent check-ins and measurement of progress
  • Both are used to coordinate the actions of people and smaller business units with larger business units (teams, departments, the overall organization) to achieve goals
  • Both give employees a greater sense of ownership of their tasks by showing them how they contributes to the company’s overall goals

Whether you are using the KPI system or the OKR system, their end results are the same: creating a metric-driven culture and that promotes employee engagement and organizational alignment in the pursuit of a few carefully selected, important goals.

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