In this article we will compare two control methodologies for measuring performance and getting real results.
As always, our goal is to provide you with all the information and tools you need to enable you to achieve your goals, which is why today we will try to give an answer to this “simple” question:

Can KPIs and OKRs operate together?

First of all, we need to be clear about what we are talking about.
We have already talked about KPIs in a previous article, run and read it if you need a little refresh!

ragazza al computer analizza i KPI

Let’s define them briefly:

  • What Key Performance Indicators (KPIs) are? Key Performance Indicators are defined as the various quantifiable metrics that help assess the progress of an activity, the effectiveness of specific processes, and the performance of specific departments within an organization. They will enable you to conduct analysis, based on circumscribed data, that will allow you to assess the progress you have made during your climb toward achieving predetermined goals and targets. They will provide you with a snapshot of performance by highlighting trends and areas that need more attention, so you can correct your shot by increasing your chances of hitting the target.
Simplifying, we can say that KPIs define the “what,” referring to results as measurable values today.
  • What OKRs (Objectives and Key Results) are? They are a framework for defining a company’s Objectives, clarifying direction and aspirations, representing the goal you need to achieve. Each Objective has its Key Results, measurable metrics that specify the outcomes that you need to achieve to guarantee goal success, help you monitor and track progress that indicate how far you are from the set goal.
OKRs focus on achieving meaningful outcomes aligned with the company’s overall vision and mission.
 Simplifying, we say OKRs help you define the “what, how and when,” referring to the process in the making.

Let's compare them: KPIs vs OKRs

KPIs and OKRs offer distinct methodologies for measuring performance and achieving goals. While KPIs measure the performance and results of existing processes, OKRs allow us to consider future goals in a flexible way.

team di ragazzi si confronta sugli obiettivi da raggiungere

We divide the differences that distinguish them into 4 main categories:

1 Strategy and operations: macro vs micro

OKRs are strategic, ambitious goals that outline direction and refer to the company’s overall vision. They promote innovation and create alignment among teams. They deal with the “macro,” planning the road to success.

KPIs focus on specific aspects of performance and certain operational metrics.
You can use them to monitor ongoing activities, measure efficiency and evaluate the success of operational processes. So we can say they go deeper into the heart of the business by targeting specific aspects with accuracy and efficiency, they work on the “micro.”

2 Benefits: short term vs long term

KPIs facilitate day-to-day decision making and help you optimizing processes. By providing a clear, measurable picture that consider the performance and results of current processes, they will enable you to identify strengths and weaknesses day by day, setting more short-term goals.

OKRs, by promoting a results-oriented culture, encourage continuous learning and improvement. They inspire teams to achieve complex goals and realize big visions, incentivize cross-functional collaboration moved by the achievement of a common goal, and provide a prospectus for strategic alignment. They represent future goals that require longer time horizons that can be managed with more flexibly.

ragazza analizza i KPI e gli OKR dell'azienda

3 Alignment-company and measurement-department

OKRs align with the strategic direction of the company so they are established at the corporate level and transmitted to the various departments.

KPIs calculate and refer to specific operational aspects and performance indicators for this reasons they can be targeted for individual departments or areas within the company.

4 Disadvantages: limited vs keep calm

KPIs definitely have a limited range; when we find ourselves talking about broader strategic goals there are some aspects that they undoubtedly fail to capture. In addition, defining which strategic KPIs to analyze and the accuracy of the data are also a challenge.

Critical points can also be highlighted for OKRs when thinking about the need not to get too carried away by seeking too ambitious and vague goals to achieve. Not to mention that constant communication and meticulous alignment, which are essential for achieving goals, often turn out to be easier solutions to achieve in theory than in practice.

So what our conclusions are?

We can say that by using these goal-setting approaches you will be able to optimize performance, improve operational efficiency, and achieve the goals you set for yourself. Not bad, right?!
What is best to choose, however, depends on your organization’s goals and context; keep in mind that many companies opt to employ a combination of both.

So answering the question we posed at the beginning, the answer is:

YES,
KPI and OKR can coexist and work together synergistically. The combination of both will enable you to leave nothing to chance, providing a comprehensive approach to measuring and defining your company’s goals.