OKR vs. KPI: Hvilket rammeverk for målsetting er best? (2023)

FAQs

What is the main difference between KPI and OKR? ›

KPIs are used to measure performance but they don't tell you what needs to change or improve to drive the growth of those numbers. OKR is a quarterly goal-setting method that helps businesses improve performance and drive change. OKRs are used to decide what needs to be changed, fixed, or improved.

The difference between OKRs and KPIs

OKRs and KPIs are both methods of performance management, but they help you achieve your goals in different ways. OKRs are a goal-setting framework, while KPIs track goal performance. You can set any goal using OKRs, but companies often use OKRs for bolder, more aggressive goals.

BSC and KPIs emphasize alignment / line of sight while OKRs emphasize agility and autonomy. BSC/KPIs tend to be better for long-term strategy execution and continuous improvement while OKRs are great for individual goal setting, accountability, and action.

KPIs focus mostly on the outcome, whereas OKRs are also concerned with the process. OKRs speak to the larger vision, the big picture of what the company is trying to achieve, whereas KPIs aim to scale or improve a certain project.

OKR Methodology Overview

OKRs consist of an objective, a clearly defined goal, and key results, which measure progress toward achieving the defined goal.

OKRs have two important parts: The objective you want to achieve and the key results, which are the way you measure achieving the objective.

And while KPIs are often considered BAU, there are times when KPIs can inform — and even become — your OKRs if it's a measurement that you want to significantly change. Think of it this way: OKRs describe where you want to be, not where you currently are.

How do OKRs and KPIs work together? While KPIs measure ongoing performance and operational efficiency, OKRs set strategic goals for the future. KPIs can feed into OKRs, providing measurable results for objective progress. Together, they can give a complete picture of the company's health and future direction.

The Four Perspectives of BSC and their Key Performance Indicators (KPIs) Examples. As mentioned earlier, there are four perspectives of balanced scorecards: finance, Customer, process, and Learning & Growth. These perspectives include a mix of financial and non-financial indicators that aid in the growth of a business.

What is the difference between OKR and KPI vs smart? ›

KPIs are just all numbers. SMART goals may be inspiring, and they have numbers. OKRs offer something for people who aren't numbers-driven."

OKRs help organizations operationalize outcomes and become more results-oriented. Outcomes are defined measurably within the framework (in the form of an objective and several key results) and achieved through the direct results of activities or initiatives (output) that are also defined in advance.

OKR (Objectives and Key Kesults) are all goal setting in a trackable matter. Lean strategy is all about waste minimization to keep a competitive edge.

Let's start by defining an OKR and how it differs from a roadmap. Objectives and Key Results (OKRs) is a time-bound agile framework for setting goals and KPIs for the broader organisation and specific teams. A roadmap is a visualisation of your strategic plan to achieve your objectives.

What is the difference between OKRs and performance management? OKRs are a goal management framework designed for and by teams. On the other hand, performance management is an assessment process designed for individuals and overseen by Human Resources or another hierarchical entity.

A typical OKR is made up of 3 to 5 high-level objectives, under which 3-5 key measurable results are listed. The said key results are measurable through a defined set of indicators or scores (usually between 0 and 1.0. The use of quantitative indicators allows an organization to check or measure progress.

Objectives and key results (OKR) is a framework for defining and tracking goals and their outcomes. It was first introduced by Andy Grove, the “Father of OKRs”, during his tenure at Intel, and it is now used by many technology giants such as Google, Twitter, LinkedIn, and Spotify.

OKRs provide your business with five important elements: focus, accountability, engagement, transparency and visibility.

The cycle is just three steps, repeated every quarter: Set, Align, and Achieve. The cycle is based on two assumptions: First, to use goals successfully, we can't just “set” them. We also have to Align them with the rest of the organization and work systematically to Achieve them.

What is OKR methodology? ›

The OKR methodology is a shared goals system which creates clarity and aligns your organization, connects everyone to your top business goals, increases performance and drives better results. Think of the objective in OKRs as a “strategic theme,” a broad, overarching, qualitative headline of what is to be achieved.

Failure to sell the change to the business and a lack of clarity and support from leadership is a main reason why OKRs fail, and can often lead to: Mistrust and anxiety toward OKRs, lowering team morale. Teams enter a compliance mindset just to get them done, poor employee engagement.

Lack of a strong use case or data-driven approach can lead to challenges in drafting realistic OKRs. Another key challenge that makes OKR fail is the resistance to adopting a new system at any level in the organization. ““OKRs are a shared language for execution.

Key Results are most commonly set on a quarterly basis. As a rule of thumb, you typically write three Key Results for each Objective, with a maximum of five. So why are OKRs important?

OKRs are meant to be collaborative and increase innovation

If you were to start penalizing your employees for missing targets, it would encourage them to set lower targets for themselves. This defeats the purpose of setting OKRs, as their higher purpose is innovation rather than measuring employee performance.

Another bad OKR example would include Key Results like “Better customer engagement”. Not only is that hard to score, but this OKR is also bad because it's highly subjective. It would mean nothing in the context of setting goals. To make it easier to score, always phrase the Key Results as observable results.

OKR's five key benefits include focus, alignment, commitment, tracking, and stretching — or as John Doerr likes to call them, “the five superpowers” of OKRs.

The 7 essential customer success KPIs that will help you retain loyal customers, regardless of your industry/product are: customer health score, customer satisfaction rate, churn rate, customer lifetime value, retention cost, Net Promoter Score, and expansion revenue.

What are the 7 key performance indicators? ›

These KPIs always exhibit three key aspects: relevance, measurability and simplicity. Let's see what that means in practice.

John Doerr introduced the OKR method to Google when he left Intel in 1999, and Google still uses the OKR method today — along with companies like Netflix, Uber, LinkedIn, and Facebook.

A company's strategy is always designed for the long term. Successful implementation is not always guaranteed, but it does set a direction for the company. OKRs, on the other hand, are set for the medium term, usually on a quarterly basis. Each OKR Cycle helps to meet this medium-term goal.

The term “objective-key performance indicator” (OKR) is often used as a synonym for key performance indicator (KPI), but there is a difference between the two terms.

Outcomes become the success indicators for all your Outputs. The Objective defines the direction and the focus while the Key Results help you to understand what you are looking to achieve. Key Results acts as a measure the success to when you have achieved your Objective.

Each Objective should be supported with 3-5 Key Results that lay out how you measurably achieve them. A Key Result will explain how you follow the North Star. It is specific, time-bound, and measurable. Just like an Objective, a Key Result should also fit on one line.

KPIs are used to measure performance but they don't tell you what needs to change or improve to drive the growth of those numbers. OKR is a quarterly goal-setting method that helps businesses improve performance and drive change. OKRs are used to decide what needs to be changed, fixed, or improved.

Lean Six Sigma uses metrics to measure performance at every level of the organization. The metrics are based on three pillars: customer satisfaction, operational efficiency, and employee engagement. Lean Six Sigma measures these pillars by using a tool called the DMAIC model.

Six Sigma is a better choice if your organization is looking to reduce variability and risk in a more complex environment. Lean might be the perfect fit for your organization if your organization requires a simple, ongoing methodology to direct innovation and improvement.

Is OKR an agile method? ›

Is OKR a Part of Agile? OKR (Objectives and Key Results) is not a direct part of Agile methodology, but it can be used in conjunction with Agile practices to set and measure goals for teams and individuals.

Objective and key results (OKRs) boost efficacy and engagement by telling managers which team members are engaged. This information is easily accessible through a weekly OKR goals check-in process, which gives managers visibility into who's achieving their OKRs.

OKRs provide a framework for setting goals and measuring progress in terms of achieving those goals, while KPIs help identify areas of improvement by providing data-driven insights into what is working and what isn't.

KPIs are just all numbers. SMART goals may be inspiring, and they have numbers. OKRs offer something for people who aren't numbers-driven."

Using both OKRs and KPIs provides a balanced view of organizational performance. While KPIs are great for measuring ongoing performance and operational efficiency, OKRs allow organizations to set, track, and achieve ambitious goals. This combination allows for both short-term and long-term planning and assessment.

But KPIs are NOT the same as goals. The goal is the outcome you hope to achieve; the KPI is a metric to let you know how well you're doing working towards that goal. Metrics shouldn't become targets.

KPIs and OKRs have different purposes and are used in different ways. KPIs are used to measure performance and track progress towards specific goals, while OKRs are used to set and achieve goals by aligning an organization's overall strategy with the goals and objectives of individual teams and employees.

Effective OKRs represent meaningful change, improvement and growth. They're our priorities for the next 30-90 days. Effective Objectives are meaningful, audacious, and inspiring. Effective Key Results are specific and timebound, aggressive and realistic, and measurable and verifiable.

Objectives and key results (OKR) is a goal-setting framework that helps organizations define goals — or objectives — and then track the outcome. The framework is designed to help organizations establish far-reaching goals in days instead of months.

The focus of OKR frameworks is leading indicators and in the case of KPIs it is mainly lagging indicators. Focussed Action prioritized according to its impact in relation to the Company's Vision, Objectives, and other goals tends to result in consistent performance.

What is an example of a smart KPI? ›

SMART KPI examples are KPIs such as “revenue per region per month” or “new customers per quarter”. Iterate and evolve. Over time, see how you or your audience are using the set of KPIs and if you find that certain ones aren't relevant, remove or replace them.

OKR metrics are the quantifiable outcomes used to monitor progress toward a goal. The objective and the key results are the two elements that make up an OKR in most cases. The objective is a particular goal that the business or team intends to accomplish that is measurable, defined, and time-bound.

Goals are the kind of long-term strategy or guideline. They explain what you want to achieve in your organization, and they are usually long-term and global. OKRs are short-term goals (often created quarterly) that are split into two parts: an Objective (the “what”) and Key Results (the “how”).