KPIs and OKRs are two of the most-used — and most-confused — acronyms in business. They are not rivals; they answer different questions. KPIs tell you whether the business is healthy right now. OKRs tell you what you are trying to change next. Use the wrong one for the job and you either drift without direction or chase goals while the basics slip.
What is a KPI?
A KPI — key performance indicator — is a metric that tracks the ongoing health of something that matters: monthly revenue, churn rate, on-time delivery, average response time. KPIs are usually steady measures you monitor continuously against a target or threshold. A good KPI answers, "Is this part of the business performing as it should?"
What is an OKR?
An OKR — objective and key results — is a goal-setting framework. The Objective is a qualitative, ambitious goal ("make onboarding effortless"); the Key Results are two to five measurable outcomes that prove you hit it ("cut time-to-first-value to under a day," "raise activation to 60%"). OKRs are set for a period — usually a quarter — and are meant to stretch you.
The key differences
- Purpose: KPIs monitor health; OKRs drive change.
- Timeframe: KPIs run continuously; OKRs are set per cycle.
- Ambition: KPIs should stay in a healthy range; OKRs are meant to be a stretch.
- Nature: a KPI is a single metric; an OKR is a goal plus the metrics that prove it.
How they work together
The best operators use both. KPIs are the dashboard you watch to keep the business running; OKRs are the projects you take on to move it forward. Often a KPI that is drifting becomes the reason for an OKR ("churn is creeping up — this quarter's objective is to fix retention"), and a Key Result is frequently just a target on an existing KPI. Monitor with KPIs; improve with OKRs.
When to use each
Reach for KPIs when you need to keep a steady eye on performance and catch problems early. Reach for OKRs when you want to rally the team around a small number of ambitious goals for the quarter. If everything is a KPI, nothing changes; if everything is an OKR, the day-to-day slips. Balance the two.
Frequently asked questions
Can a key result be a KPI?
Yes — very often it is. A Key Result is usually a target on a metric, and that metric may already be a KPI you track. The difference is that the KPI runs continuously while the Key Result is a specific target for the OKR cycle.
Are OKRs better than KPIs?
Neither is better; they do different jobs. KPIs monitor ongoing health, OKRs drive focused change. Most teams need both.
How many KPIs and OKRs should you have?
Keep both few. A handful of KPIs per team keeps the dashboard readable, and one to three objectives with two to five key results each per quarter keeps focus. Too many of either dilutes attention.
Both live or die on the numbers you choose to watch — see our guides to what to track in an operations dashboard and running a weekly operations review.
FulcrumGrid Command Center
See your KPIs and OKRs in one place
Command Center puts your live KPIs and quarterly OKRs on one dashboard — so you can monitor the health of the business and track the goals moving it forward, side by side.