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Written by Pete Wilkinson

Last updated 8 April 2022 ·

How OKRs and KPIs work together to accelerate results

How do KPIs, key performance indicators and OKRs, objectives, and key results fit together? They’re both used to set, track, and achieve measurable goals that help accelerate results. You can use KPIs and OKRs to develop these goals so everyone can work effectively towards them, regardless of their position in the company.

This blog will show you how OKRs and KPIs can be used to measure your business’s performance, improving how data-driven decisions are made and how effective a well-cascaded business strategy can be over time. Read on to learn more about the similarities and differences between these two goal-setting approaches and discover how you can use them together to achieve more substantial results for your company.

What are OKRs and why are they effective?

OKRs, objectives and key results provide a goal-setting framework that cascades strategic priorities throughout all levels of an organisation to achieve a tighter focus, increased productivity and high performance for faster results. Used by many successful businesses and initially created by Andy Grove whilst working at Intel, OKRs provide an effective way to ensure more effective and efficient strategy execution at pace, leading to faster growth.

Key Performance Indicators (KPIs)

KPIs, key performance indicators, are metrics that track and monitor progress towards a specific goal. KPIs should be clearly defined, measurable, and directly tied to a business goal, expressing a single detailed result. Used in combination with Objectives and Key Results (OKRs), KPIs can be highly effective at accelerating results.

What can businesses do to set goals?

Goal setting is an excellent way for companies to measure their progress and growth and ensure they move in the desired direction. However, it can be challenging to know how best to set and implement goals effectively. Goals should be set initially at a business level, tying in with the overall purpose and vision, and then communicated throughout all teams to get everyone on board and working hard to achieve them.

Once the business goals have been decided, it’s important to set measurable targets and use analytics to monitor progress and achievements being made over time. Businesses can use the popular OKR framework to effectively establish and cascade these goals. KPIs come in at the key result stage within the OKR process, providing specific, measurable achievements that signify progress towards achieving each of the objectives.

How are OKRs different from KPIs?

There are many similarities between OKRs and KPIs; however, the main difference is that OKRs provide a company-wide method of goal-setting, which engages and empowers people at all levels with the main strategic focus for the business to enable more informed decision making. On the other hand, KPIs represent more individual level goal-setting metrics and tend to provide more abstract measurements of performance.

An organisation may set several key results as part of the OKR process that cascades the overall business strategy throughout all teams, with individual KPIs being used to measure the success of each of these key results. An organisation will likely use KPIs in tandem with OKRs in order to accurately gauge overall performance.

When should companies start tracking their KPIs?

KIPs, key performance indicators are tracked alongside OKRs, objectives and key results in many companies. The difference between goals and KPIs is subtle but essential. Goals focus on achieving a result, while KPIs measure your company’s ability to execute specific strategies or initiatives at an individual level. Some would argue that a KPI should be included as a key result. For example, a key result set within the OKR framework for a marketing executive level could be to increase social media followers by 20% over the next six months. This would then become one of the KPIs for the marketing team to achieve. For more examples of OKRs in action, check out our blog OKR examples to help you get started.

How to track progress

KPIs can be tracked using spreadsheets or shared documents. However, as we have recognised KPIs form an essential part of the more cohesive OKR framework, using an OKR software tool can dramatically help integrate KPIs within the overall business planning and execution.

OKR software can help set, cascade and monitor progress towards achieving strategic business goals. The Reclaro 1-3-5® OKR software has been built around the award-winning 1-3-5® business planning methodology, which is proven to improve communication of business goals and priorities to speed up the pace of execution significantly.

To learn more about how the Reclaro 1-3-5® OKR software has benefitted other businesses, check out our Customer Stories.

To start using OKRs in your business, download our free resource - The OKR Builder™, today!

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