OKR vs KPI: how do you make a difference?

In the professional world, there are a multitude of acronyms and acronyms that are important to know and master. For example, this is the case of CDI (permanent contract), DIF (individual right to training), SMEs (small and medium-sized enterprises) or even SMIC (minimum interprofessional growth wage), for the best known.

But do you know OKRs and KPIs? These are tools that allow you to define your priorities, plan your goals, and measure your progress. While these two acronyms are similar, they provide different approaches and perspectives on business performance and success. They are therefore not similar but rather complementary.

Don't try to choose between OKR and KPI, but make sure you use both. To help you find your way around, here is their definition and what differentiates these two tools.

Definition: What are OKRs or Objective and Key Results?

In English, OKR stands for Objectives and Key Results. The goal is what you want to achieve or improve, the direction you want to go in, and key results are how to get there. In other words, an objective is linked to key results.

In a business, a distinction is made between daily and routine tasks that allow an entire organization to function, and important tasks that allow you to achieve strategic goals and move the business forward. OKR forces you to reassess, reduce, automate, or outsource activities that don't add value and don't have priority in order to focus your efforts on what really matters.

OKR is a method that allows you to effectively define and manage your goals and to set a global direction for your employees. Each quarter, you define one or more goals for your employees, your team, your department or your company. This way, you avoid dispersing yourself by trying to reach a multitude of goals at the same time, and you focus your efforts for three months on achieving the goal (s) you have set for yourself.

For each objective, you need to determine between two and five key outcomes. Your goals must be qualitative and stimulating in order to generate employee engagement. As for the associated key results, they should be measurable in order to determine if you are on the right track and, if necessary, be able to provide a rapid response to remedy them.

The OKR method is known to be used by large multinationals such as Google, Amazon, Netflix or Disney. Leaders use this method when they want to achieve powerful results, become more successful, and improve their business on an ongoing basis.

What are OKRs? How do you define them?

To define your OKRs, you need to ask yourself these two questions:

• Where do you want to go?
• How do you know if you are going?

The answer to the first question corresponds to the goals you want to achieve. The OKR method is characterized by ambitious goals, but they are still achievable. The idea is to encourage you to challenge yourself, to get out of your comfort zone.

Key results answer the second question. Concrete and easily measurable, they show you how to achieve the objective (s) set.

OKR examples

Here are two examples of OKRs.

Objective: increase your turnover by 20% within six months.

• Key result 1: acquire 20 new customers per month.
• Key result 2: offer three new products for sale.
• Key result 3: increase the number of prospects by 20%.

Objective: recruit 100 new people in 2021.

• Key result 1: receive 1000 resumes at the beginning of the year.
• Key result 2: receive 500 people for interviews in the second quarter.
• Key result 3: choose 100 people and have them sign their contract before the end of the year.

What are KPIs?

KPI is an English acronym that stands for key performance indicator, or key performance indicator (ICP) in French. These indicators make it possible to assess the performance and success of an action, a project, a marketing campaign or, more generally, of a company.

This is numerical data that tells you where you are in relation to the goals set. You can use them from time to time to assess the effectiveness of a specific action or continuously to measure the results of a process or device, a service, a team, an employee etc. A KPI allows you to precisely measure a situation at a given moment, and thus to make an appropriate decision. To facilitate their understanding, they are generally represented in the form of a gauge or traffic lights.

It is preferable to define your KPIs in advance, before starting the action whose results you want to assess. But it is always possible to set up KPIs to measure the effectiveness of an action in progress.

How do I determine a KPI?

A valid key performance indicator must meet several characteristics.

He must:

• measuring a specific objective;
• be realistic, quantifiable, and time-bound;
• be simple and understandable by everyone;
• based on regularly updated data;
• provide reliable results;
• encourage decision-making and action based on the results displayed.

What are the types of KPI indicators?

Here are some examples of KPIs according to business areas.

• Business Indicators : number of orders placed per month, number of new customers, loyalty rate, etc.
• Financial indicators : real cost, rate of return, return on investment, etc.
• Marketing indicators : website traffic, number of leads generated (Marketing Qualified Leads), call-to-action click rate, conversion rate per channel, etc.
• Organizational indicators : employee turnover, absenteeism rate, work accident rate, etc.

How can you tell the difference between a KPI and an OKR analysis?

OKR and KPI are not interchangeable. They are different and complementary. So, to develop and improve your business, it is in your best interest to combine the use of these two tools.

KPIs allow you to look back and measure the effectiveness and success of the actions you have already put in place. They help you improve an existing project or process.

OKRs allow you to define a direction to follow and move forward in that direction. They are generally ambitious and push your teams to surpass themselves. Often, key results (called KR for key results) are KPIs.

Small summary table

The OKRs are The KPIs are ambitious goals, realistic and achievable, qualitative, quantifiable goals, a motivational tool, a performance-assessment tool, focused on growth, focused on results

In short, OKRs show you the direction to take and KPIs are used to assess the effectiveness of the means used to get to your destination.