OKRs vs KPIs: How to Use Both Without Confusing Everyone

Few management topics generate as much confusion as OKRs and KPIs. Some organisations use the terms interchangeably. Others replace their KPIs with OKRs and then wonder why routine performance has slipped. Others add OKRs on top of everything else, so teams juggle dozens of measures with no clear priority.

The distinction is simple once you see it. KPIs tell you whether the business is running well. OKRs describe the few things you are trying to change. Most organisations need both, used for different purposes.

What are KPIs?

Key performance indicators are measures of ongoing performance. They track the health of the business and its processes: revenue, costs, customer satisfaction, delivery times, error rates, staff turnover.

KPIs are like the dashboard of a car. They show speed, fuel and engine temperature. You watch them continuously and act when something moves outside the normal range. They rarely change from one year to the next, because the things they measure remain important.

What are OKRs?

Objectives and key results are a goal-setting method. An objective is a qualitative statement of what you want to achieve, usually something ambitious and time-bound. Key results are a small number of measurable outcomes that show whether you have achieved it.

For example:

• Objective: Make it effortless for new customers to get started.
• Key results: Reduce average time from sign-up to first use from ten days to three. Increase the proportion of new customers who complete set-up without contacting support from 60% to 85%. Raise new customer satisfaction from 7.1 to 8.0.

OKRs are like the destination on a map. They describe where you are trying to get to over the next quarter or year. They change as priorities change.

The key differences

• Purpose: KPIs monitor; OKRs change.
• Time frame: KPIs are ongoing; OKRs usually run for a quarter or a year.
• Number: an organisation may track many KPIs, but should have only a handful of OKRs at each level.
• Ambition: KPIs often have targets set at a level of acceptable performance; OKRs are often deliberately stretching.
• Content: KPIs measure "business as usual"; OKRs focus on improvement, growth or transformation.

How they work together

The two connect naturally. When a KPI moves in the wrong direction, or you decide it needs to reach a new level, that becomes a candidate for an OKR.

For instance, if customer churn has been creeping up, a KPI flags the problem. The organisation then sets an objective to improve retention, with key results that describe the change it wants. Once the new level is achieved and stable, the OKR ends, and the KPI continues to monitor it.

Good practice is to:

1. Keep a stable set of KPIs that show the health of the organisation and each team.
2. Choose a few OKRs for the most important changes this period, often informed by the KPIs.
3. Review both regularly, but differently: KPIs for exceptions, OKRs for progress and learning.

Common mistakes

Turning every KPI into an OKR

If your OKRs are simply your normal measures restated as goals, such as "maintain revenue growth", you have lost the point of OKRs. They should describe change.

Too many OKRs

Teams with ten objectives and forty key results have no real priorities. Three to five objectives, each with two to four key results, is plenty.

Activities as key results

"Launch a new onboarding guide" is an activity. "Reduce first-month support contacts by 30%" is a result. Key results should describe outcomes; activities belong in plans.

Linking OKRs directly to pay

When OKRs determine bonuses, people set safe targets they know they can hit, which removes the ambition that makes OKRs useful. Many organisations deliberately keep OKRs separate from individual performance ratings.

Setting and forgetting

OKRs set at the start of a quarter and reviewed only at the end rarely work. Short, regular check-ins, weekly or fortnightly, keep them alive and allow teams to adjust.

Cascading mechanically

Forcing every team's OKRs to be a direct subset of the level above produces rigid, uninspiring goals. Better to share organisational priorities and let teams propose how they will contribute.

Connecting goals to strategy

OKRs work best when they are clearly connected to the organisation's strategy. If you are not sure your strategy is clear enough to set meaningful objectives, our article on why strategies fail in execution covers the most common gaps.

How mature is your goal-setting and performance management?

Updated October 2026: we have added a Performance Management & OKRs assessment. It covers goal-setting and alignment, progress check-ins, feedback and coaching, evaluation and calibration, recognition, and handling underperformance and development.

For the strategic side, the Strategic Planning & Alignment assessment looks at how priorities are set, communicated and tracked.

Frequently asked questions

Can a KPI also be a key result?

Yes. A key result often aims to move a KPI to a new level, such as raising customer satisfaction from 7.1 to 8.0. The difference is that the key result is a time-bound target for change, while the KPI continues to be monitored afterwards.

How often should OKRs be set?

Many organisations set annual objectives with quarterly key results. Others use quarterly OKRs throughout. Choose a rhythm that matches how quickly your priorities and environment change.

Do small organisations need OKRs?

Not necessarily. Small organisations can benefit from the discipline of a few clear goals with measurable outcomes, but a formal OKR process is optional. A short list of priorities reviewed monthly may be enough.