Quick Insight
KPIs and OKRs share some common benefits and components. However, they serve different purposes. KPIs are an excellent tool for established, stable companies. OKRs better fit smaller and dynamic companies. You can use both KPIs and OKRs.
KPIs and OKRs share some common benefits and components. However, they serve different purposes. How do they fit together, or are they mutually exclusive?
KPIs are an excellent tool for established companies in stable industries or business environments. They provide great focus, clarity, alignment, and motivation over a year.
However, smaller companies quickly make strategic changes. Larger companies in dynamic industries optimize flexibility over efficiency. OKRs better fit the cycle times of these companies.
KPIs focus on assessment, not process. They look at what was accomplished. How things get accomplished is done through other project and task processes.
OKRs combined both assessment and process (i.e., "what" and "how"). KPIs don't include deadlines, while OKRs may include deadlines.
It's possible to manage with both KPIs and OKRs. For example, a company may create a KPI dashboard to monitor the company's health and identify when problems arise. OKRs would be used more for managing and monitoring the progress of the company's advance toward its vision.
- Rob Stephens
Founder of CFO Perspective and the Finance and Strategy Toolkit (FAST)
Further Insight
CFO Perspective Resources
Get all the CFO Perspective resources with a FAST (Finance and Strategy Toolkit) membership.