21 Aug OKRs Vs KPIs
As people leaders, we all need systems of management, ways to measure performance and to assess whether or not our teams are reaching their goals but it can be a challenge to choose the right ones. When it comes to goal-setting specifically, there are many different frameworks out there with Key Performance Indicators being a popular choice while Objectives and Key Results (OKRs) is another. In this article OKRs Vs KPIs, we examine both.
If we pit both OKRs Vs KPIs frameworks against each other in the goal-setting boxing ring, we are one hundred per cent in the corner of OKRs. We are on their team. So much so, it’s the structure we favour in our product as well as in our company. But with many businesses still using KPIs as their metric, we want to look at why it’s time to leave them and move forward with what we believe to be the better solution.
Let’s get into the details of OKRs Vs KPIs, starting with KPIs. They are about what you want to achieve and when you want to achieve them. There are a whole host of categories covering the various elements of a business such as sales, operational and customer KPIs. An example of a sales KPI could be the average conversation time while a customer one might be the number of customers retained. These are hugely beneficial. Everyone needs to know the what and when but the main differences between KPIs and OKRs is the how.
With OKRs, you can be broad and ambitious in your objective yet still be specific in terms of your key results. Similar to the above, they cover all the areas. An example of a marketing OKR could be the objective to increase website conversions while the key results could be to increase the number of visitors to the website by 5% per month, grow conversions on landing pages by 10% in Q2 and get 15 backlinks from other websites.
It’s this piece in the middle, the stepping stones between the goal and reaching it, where the magic happens. OKRs allow for more strategic goal-setting and create more transparency when it comes to working as a team. They allow for everyone to be better aligned and understand the overall priorities of the business as well as what individuals and teams are working towards. This not only supports clarity and consistency around goal-setting but gives people a greater sense of purpose in their work and how that contributes to the wider company strategy.
OKRs are more than a metric the same way your people are more than an employee. They are the people-centred option. Companies are moving in this employee-focused direction and anyone failing to move this way risk losing their best people. Your employees want to evolve, contribute and achieve their goals. OKRs help you as their leader to accomplish this.
Some of our team have used KPI’s in the past but we are all in agreement that OKRs are the way forward. The same can be said for our customers. The OKR feature of our product has replaced their KPI way. Our customers benefit from clearly communicating and sharing the company OKRs as a first step and then aligning individual and department level goals directly to those. It adds value by bringing their goal-setting to the next level as it does for us too.
If you are new to OKRs, and you’d like to learn more about them as a goal-setting solution, you can do so with our eBook ‘OKRs – How To Reach Goal Setting Goals’ where we give examples, guidance on how to implement them as well as what to avoid. In our opinion, KPIs are old business while OKRs are the new. When it come to OKRs Vs KPIs, KPIs have their place, but it’s not in modern leadership. We believe they are for managing while OKRs are for leading.
We hope you enjoyed this piece on OKRs Vs KPIs. As we establish a new way of working, we’re here to help you and your people make the transition.
Get in touch with Ronan from the team Frankli today to see how.