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KPI vs OKR: what makes them different?

NitanshLast Updated: December 13, 2022

In any project, it is vital to understand what’s working and what’s not. KPI and OKR are two metrics that can help you measure, analyze, and manage your project outcome. But how? In this article, we will highlight the key things related to KPI and OKR and what importance they hold in project management. But first, let’s understand what KPI and OKR metrics are.

What is KPI?

KPIs, or Key performance indicators, are the performance metrics that help evaluate the success of any activity. It could be a task, project, program, or product management. However, KPIs do not have set parameters that offer a one-for-all solution. They have to be tailored depending on the task at hand. For example, KPIs for project management may include the timeline, resource utilization, budget, etc.

What is OKR?

OKRs, on the other hand, stands for Objectives and Key Results. It outlines the objectives for a task and measures them against the expected key results. OKRs aim towards defining the measurable steps for achieving the set goals. These are essentially a part of the project planning and can be applied at the organization, team, or even at an individual level.     

How is OKR different from KPI?

The major difference between KPIs and OKRs is the intention behind them. Where KPIs depend on the outcome of a process, OKR is a goal-setting method that represents a more aggressive approach to defining how you can achieve those outcomes. However, both KPI and OKR can be used to reflect on the team’s performance. Wondering how?

KPIs help you identify the key performers in a project, whereas OKRs allow you to plan how you can use those key performers to deliver results.

KPIs tell you what is or is not working for your project, but you cannot use them to drive change or make process adjustments. For that, OKRs have to be put in place.    

When to use KPI and OKR metrics?

OKRs are used to align and engage teams. It plays an important role in risk analysis.  OKR metrics are crucial to defining, tracking, adapting, and evaluating the steps or tasks in a project. It also highlights the key areas to focus on to avoid any discrepancies.

You can use KPIs to set project milestones and benchmarks. It allows you to identify and evaluate glitches in a set process. In addition, you can also use KPIs for performance analysis and management. It could be a team, a process, or even a system.

KPIs are usually defined at the start of a project based on the ideal outcomes expected. So, it kind of works like quality control to determine what deviations have occurred during the process. It is safe to say that works as a precursor to defining the OKRs.

How do KPI and OKR metrics contribute to an organization’s growth and success?

Both KPI and OKR metrics are performance indicators that help you identify deviations in a process even before it occurs. We would all agree that this kind of performance review and analysis is extremely important in making any project successful.

Let’s illustrate KPI vs OKR through an example:

The KPI of any project tells you how your project should perform, and OKR entails how you can achieve the desired outcome. When done consistently for every project, KPIs and OKRs can help align teams with the company’s vision and what it is that the organization aims to deliver. So, even if you face an issue, you can troubleshoot by referring to similar encounters in the past and tackle it in much less time. Hence, increasing the success rate.

Flow Shared Calendar

You can maximize the benefits of KPI and OKR metrics in helping organizations meet and even exceed their objective by real-time tracking of these metrics. Tools like Gantt charts, calendars, and project dashboards can help you achieve it.

Best practices for using KPI and OKR metrics

Here are the recommended practices for using KPI and OKR metrics.

KPI metrics

Try to keep them to a minimum. For most projects, you won’t require more than 15-25 KPIs.

  • Your KPIs should be defining yet feasible objectives. So, while selecting a KPI make sure that it is achievable. Otherwise, it may negatively impact your team’s motivation.
  • Keep a clear and concise approach. Each KPI should focus on a target to achieve. When there is an end goal in sight, teams tend to perform better.
  • Be open to change. Some KPIs may not hold relevance as the project progresses. You should be ready to address them and make appropriate modifications.
  • Don’t shy away from technology. When it comes to metrics like KPI, digital tools can be your best friend. Make sure you leverage them. Don’t just rely on spreadsheets because they are manual and prone to errors.

OKR metrics

  • Start simple. Don’t try to define an entire project all at once. Take it one step at a time keeping in mind the deviations you may face along the process.
  • Do a regular review. Aiming for short-term goals delivers better results because it will help you make decisions based on the real-time situation. Review your OKRs on a monthly or quarterly basis to make appropriate modifications.
  • Involve your team. Before committing to any action plan, it is vital to understand your team’s capability and availability. And this cannot happen without communication. Make sure that you take inputs from all the stakeholders involved in the project.
  • Use tools to automate the process. Manual tracing of OKRs can be a tedious task. Some tools can help you keep track of these processes in real-time and notify you in case there is any deviation.

How can Flow help?

Accelerate your success by using project management metrics like KPI and OKR. Try our tool, Flow, if you are looking for a turnkey platform for all your project management needs. Click here to try it for free.

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