KPIs vs. OKRs: Both Are Needed to Be Successful
The year is going to end in the next quarter, so it's a good time to check in on those resolutions you have made in the beginning of the year.
Are you able to meet your goals ?
What are the challenges you are facing?
What has been your team’s resolution for this year?
Which specific initiatives were effective?
It’s significant to review your overall performance when you gauge what you’ve accomplished throughout the year.
However, it's just as important to look forward as it is to look back. The last few weeks of the year are ideal for goal setting.
Are you familiar with the terms like KPI and OKR?
If you're familiar with neither, don't panic. The tech world is filled with buzzy jargon and acronyms so it can be hard to keep them all straight.
The common purpose of both KPI and OKR is to establish and plan quarterly or annual goals.
What is a KPI?
Key Performance Indicators (KPIs) are defined as performance metrics that evaluate the success of an organization or of a particular activity.
KPIs can apply to projects, programs, products, and a variety of other initiatives. They can measure the success of anything from sales goals to social media metrics.
KPIs should be tailored to your specific organizational objectives, how you plan on achieving them, and who can act on this information.
Let's take a look at an example.
Let's say your KPI was to increase Marketing Qualified Leads (MQLs) by 30%. Here's how you define it:
KPI for MQL Growth
What:: Increase MQLs by 30% this year
Why:Achieving this target will allow the business to become profitable
How:Hiring additional sales staff, improving existing marketing strategies, adopting a new tool, creating more content, etc.
Who:VP of Marketing is responsible for this metric
When:The KPI will be reviewed on a quarterly basis
This is how KPI works for an organization.
Now let’s try to comprehend what is an OKR?
According to The Best OKR coach Suresh Mansharamani enunciates that Objectives and Key Results (OKRs) are defined as a metric that outlines company and team "objectives" along with the measurable "key results" that define the achievement of each objective.
OKRs represent aggressive goals and define the measurable steps you’ll take towards achieving those goals. They're typically used to set quarterly goals, but can also be used for annual planning.
The rising popularity of OKRs is mainly attributed to Intel and Google, who have adopted this technique for their planning.
OKRs are set at the company, team, and individual level.
Let’s have a glimpse of a handful of OKR examples:
Company OKR:
Objective:Increase brand recognition and awareness
Key Result 1:Increase media engagement by 20%
Key Result 2:Launch customer referral program by Jan 1
Key Result 3:Extend social media reach and visibility to two new target markets
Key Result 4:Expand thought leadership program by placing guest articles on four industry-related sites with an Alexa ranking of at least 30,000
Marketing Team OKR:.
Objective:Increase social media engagement by 35%
Key Result 1:Research and identify three most popular social media sites among two new target audiences and develop engagement strategy by Jan 1
Key Result 2:Participate in six Twitter chats involving industry leaders
Key Result 3:Respond to new Facebook comments within three hours
Key Result 4:Increase number of followers on Facebook and Twitter by 20%
Individual OKR
Objective:Increase number of social media connections by 25%
Key Result 1:Increase posting frequency on Twitter to 8x daily and Facebook to 3x daily
Key Result 2:Establish social media presence on two new sites: LinkedIn and Quora
Key Result 3:Join 5 LinkedIn groups with at least 2,500 members each and leave comments on the 10 most popular discussions in each group
Key Result 4:Gain 15 followers on Quora by posting three answers and one question every week
The difference between KPIs and OKRs
According to Suresh Mansharamani, one of the best OKR specialists, One of the key differences between OKRs and KPIs is the intention behind the goal setting. KPI goals are typically obtainable and represent the output of a process or project already in place, while OKR goals are somewhat more aggressive and ambitious.
However, while OKR goals should be bold, they shouldn't be unreachable. The idea behind this strategy is that by crafting aggressive OKRs, you can push your team and yourself to perform that much better.
Which one is better?
This is a question which OKR experts in India often come across.
Moreover, at this point you're probably wondering, "what's the difference between OKR and KPI?" and you wouldn't be the only one. When evaluating whether to use OKRs vs. KPIs, it's really up to you and what you're looking to measure.
For example, if you're looking to scale or improve upon a plan or project that's been done before, KPIs might be the better option. They're straightforward and allow you to add a measurement system to your ongoing projects and processes.
However, if you have a larger vision or are looking to change your overall direction, OKRs might be the better alternative. They have greater depth that will allow you to stretch your goals even further and allow you to be a bit more creative on how you plan to reach those goals.
Importance of Measuring Performance
Regardless of which technique you choose, the bottom line is: the only way to improve is to measure and review performance. Suresh Mansharamani, the best OKR consultant in India suggests that if you don't take the time to set objectives, or you're setting them but not reviewing them at the end of the year/quarter, you miss a prime opportunity to learn and improve. Remember, you can actually learn from failures and successes, so make it a top priority to implement performance metrics. You may be surprised how quickly you and your team reach them.
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