OKRs or KPIs?

OKRs vs KPIs: Which is Right for Your Business?

If you’ve been in business long enough, you’ve likely heard the buzzwords “OKRs” (Objectives and Key Results) and “KPIs” (Key Performance Indicators). Both are valuable tools, but many business owners and leaders struggle to understand their differences and, more importantly, when to use each. Let’s break it down, plain and simple, so you can decide which best fits your business goals.

The Role of OKRs: Driving Big, Bold Change

OKRs are all about ambition...think "SMART goals" here. Think of them as your roadmap for achieving transformative goals. They answer the question: “Where do we want to go, and how will we know when we’ve arrived?”

• Objective: The “where” — a qualitative, inspirational goal. For example, “Become the go-to IT service provider in our region.”
• Key Results: The “how” — specific, measurable milestones that tell you if you’re hitting the mark. For example:
  • Achieve a 25% increase in recurring revenue this year.
  • Reduce average response time to client inquiries by 50%.

OKRs push your team beyond their comfort zone. They’re not about maintaining the status quo; they’re about growth, innovation, and forward momentum. If you’re aiming to expand into new markets, launch a new product, or transform your company culture, OKRs can provide the clarity and drive to make it happen.

The Role of KPIs: Maintaining Business Health

KPIs, on the other hand, are your business dashboard...think weekly scorecard. They track the critical metrics that keep your business running smoothly. KPIs answer the question: “How are we performing?”

Here are a few examples:

• Customer retention rate.
• Monthly recurring revenue (MRR).
• Average client satisfaction score.

KPIs are not inherently tied to a specific goal (though they can be); instead, they monitor the ongoing health of your business. If you think of your company like a car, KPIs are your fuel gauge, speedometer, and oil light — they tell you whether everything is functioning as it should.

Key Differences Between OKRs and KPIs

1. Purpose

   • OKRs are about stretching for future achievements. They inspire progress and focus on what’s possible.
   • KPIs are about tracking current performance. They ensure you’re not losing sight of critical business functions.

2. Timeframe

   • OKRs are typically set for a quarter or year and are meant to be revisited and revised as you move forward.
   • KPIs are often ongoing and consistent — they rarely change unless your business model does.

3. Mindset

   • OKRs encourage a “growth” mindset. They challenge your team to think big and embrace potential failure as part of innovation.
   • KPIs align with a “sustainability” mindset. They focus on stability and consistency, ensuring you don’t let any critical areas slip.

How to Use Both Together

OKRs and KPIs don’t have to compete — they can complement each other beautifully. For example:

Let’s say you’re running an IT service company and set an OKR to expand your client base by 20% this year. Your KPIs, like client satisfaction and ticket resolution time, will help ensure you don’t sacrifice quality while chasing growth.

By using OKRs to drive change and KPIs to maintain stability, you create a balanced approach to leadership and business growth.

Choosing the Right Tool for Your Business

Here’s my advice:

• Use OKRs when you want to drive transformational change. They’re perfect for strategic initiatives, launching something new, or tackling big challenges.  We use these at annual planning and quarterly planning for SMART goals.
• Use KPIs when you need to monitor the health of your business. They’re essential for keeping your finger on the pulse of day-to-day operations.  We use these weekly for our scorecard.

The truth is, a healthy business needs both. OKRs keep you reaching for what’s next, while KPIs make sure you’re staying solid on the foundation you’ve already built.

What’s most important is using these tools intentionally. Don’t let them become just another checkbox on a to-do list. Use them to spark focus, alignment, and action — and watch how your team responds.

Ryan Giles