OKR vs KPI - How to Use These Two Methods for Your Success

1. OKR Definition - The journey is the goal!
2. KPI Definition - How good are we?
3. Differences between OKRs and KPIs
4. Using OKR and KPI together
5. Software for your OKR management
6. Conclusion

OKR ... KPI ... the world is at your feet ...These two abbreviations, reminiscent of the long-running hip-hop century, actually describe controlling metrics for measuring and directing your business success. In this article, we will lift these two terms out of sound and smoke and provide a memorable definition so you can use them for your own success in the future.

OKR Definition - The journey is the goal!

OKR stands for Objectives and Key Results and translated means: Goals and key results. Specifically, OKR is a framework for companies to align themselves with clearly defined goals, i.e. objectives. To achieve such a qualitative goal, several measurable actions, the key results, are completed within a defined period.

The special thing about the methodology is the integration far beyond your management level. OKRs usually affect every process or team member and promote a proactive corporate culture and the realisation of being part of a successful structure. OKRs are often considered a modern process approach that brings innovative solutions to light. Successful representatives of the OKR Method include Google, Spotify, METRO, HolidayCheck and many more companies that influence their success story with it.

OKR examples in practice:

OKR Example 1: To target improvements to your product marketing, you want to gain deep customer feedback.

Objective: Targeted customer feedback

Key Result 1: Satisfaction mailing achieves a return rate of 20%

Key Result 2: 60 qualitative interviews are generated from the existing customer base

Key Result 3: The customer event achieves 50 registrations

OKR Example 2: As part of your SEO audit, you have found that you have slipped somewhat in the rankings.

Objective: Improving On-Page SEO

Key Result 1: The SEO Health Score achieves at least 90%

Key Result 2: The loading time of 80% of the pages is 3 seconds or lower

Key Result 3: Metadata and descriptions have been reviewed and optimized on all sites

Key Result 4: Amplification of expert podcasts from 2 to 4 per month

You can find more input and other examples on the subject of OKR in our article OKR examples.

KPI Definition - How good are we?

Key Performance Indicators or KPIs in German: performance indicators, are the classic measuring instrument for evaluating progress, setbacks, developments, goal achievement and other success factors.

Every company, no matter what size, can look at KPIs to evaluate profit, sales, productivity, and much more to assess success or compare it with other periods. KPIs are typically used as a permanent measurement tool and look back on a period of time without having affected it.

KPI examples in practice:

KPI Example 1: How quickly does your LinkedIn webinar campaign convert in the B2B sector?

Details:

• Sales channel: LinkedIn
• Product: Webinar "Agile Project Management"
• Unit of measurement: Number of calendar days
• Evaluation period: past 12 months
• Indicator: The lower the number of calendar days, the better

KPI Example 2: How many open tickets are there per IT support staff member?

Details:

• Measurement channel: Jira Service Management
• Unit of measurement: Number of open tickets
• Number of IT support staff: 5
• Evaluation period: continuous
• Indicator: The lower the number of open tickets per employee, the better

Differences between OKRs and KPIs

Although the two measurement instruments are constructed differently, the success of your company is always in the spotlight. While the OKR method is designed for future processes and measures, KPIs look back on a past period to make a current statement of the status quo. To distinguish more clearly the scope and utility of OKR and KPI, we have put together the specific differences in the following graphic:

Graphic: OKR vs KPI

Using OKR and KPI together

Despite their oppositional usage, you do not have to choose one metric to measure the success of your company. For your goal management, it is even an advantage to combine both systems or integrate sub-aspects in each other's measuring instrument or align them. If you want to increase sales, for example, you will read off the status in need of improvement on corresponding performance indicators, i.e. KPIs. In order to promote sales specifically, you initiate measures, which you define in the form of OKRs.

But it also works the other way around, because the key results of an OKR are, as already mentioned, measures that achieve measurable results - also usable as a KPI. Using an even more specific example from practice, the combination of OKR and KPI becomes even clearer:

The performance indicators of your Department for Human Resources show that in the past 12 months, 20% more employees* have left than the average in the five previous years. The number of resignations among your knowledge workers - i.e. employees who have valuable experiences with a strong focus on the core business of your company - has even doubled here.

So you have read the concrete status quo knowledge from the following - exemplary - KPIs:

• Number of resignations in the calendar year
• Number of resignations in the calendar year in professionally significant positions

You now have the task of recruiting new employees, training them, and naturally hoping to bear the circumstances and additional costs caused by the situation only in the short term. Additional costs that can also be read off KPIs in the next reporting phases. Here are some more examples:

• Cost of placing advertisements
• Cost for external headhunters
• Time spent on application interviews
• Time spent on orientation
• Lower performance in understaffed teams
• Lower performance in strategic knowledge work

As you can see, the small numbers from your HR department are pulling quite a few after-effects with them. In order to get these back in the green zone in the long term, measures are required. However, satisfaction cannot be gained from paperwork or calculation programs. That's why you take action and come up with some immediate measures to prevent losing more colleagues, find qualified personnel and better bind the entire team to the company. To track these qualitative projects, you set measurable, quantitative factors - or in other words: you determine OKRs.

Objective: Survey of employee mood and satisfaction

Key Result 1: 70% of employees participate anonymously in a digital survey

Key Result 2: Interviews with all team leaders

Key Result 3: Weekly short surveys provide an insight into the current mood

Objective: Efficient recruiting

Key Result 1: Shortening the response to 5 working days

Key Result 2: Interview feedbacks are given within 24 hours

Key Result 3: Initial interviews are held 100% via video conference

Key Result 4: Shortening of the entire application process from 30 days to max. 20 days

Objective: Successful Loyalty Program

Key Result 1: Evaluation of the current Loyalty Program and comparison with employee programs in the environment

Key Result 2: Comparison of the Loyalty Program with competitors in the DACH area

Key Result 3: Adjustment of the own program with 15% more budget

Objective: Improved further qualification

Key Result 1: Training budget is doubled

Key Result 2: Mentoring capacities are increased by 30%

Key Result 3: Expansion of the HR department by two Learning & Development responsible

Objective: Expansion of the LinkedIn profile and creation of a campaign for senior positions

Key Result 1: Establishment of the LinkedIn profile as an additional application channel with a 30% increase in response

Key Result 2: Generation of at least 100 potential application candidates as new followers

Key Result 3: Creation of an application campaign on LinkedIn for the knowledge sector

Key Result 4: Overhaul of the internal application portal according to UX in order to receive 10% more unsolicited applications

These or similar measures will help to promote the mood and satisfaction of your teams. After the individual actions have been set, the key results are measured and compared with the planned target. After all, all measures contribute to the profitability of your company. For the following fiscal year, you can expect more than just your HR KPIs bobbing along in the usual average. Much more, you can expect top marks in several sectors, because you have invested in a highly motivated and capable team.

You can learn about another example of the practical link between the two measurement instruments in this Video.

Software for your OKR management

Alignment, transparency and full focus on your OKRs - the following tools support you in OKR management with features like:

• Goal management
• Staff development
• KPI monitoring
• Feedback management
• Strategic planning
• Central status quo tracking
• Instant messaging

With the help of OMR Reviews on the topic OKR Software you can get a precise picture of how practical the tools are and how they have been rated by real users. We also recommend contacting the manufacturers about free demo versions to thoroughly test the systems yourself.

• Mooncamp The OKR software supports you in the development of agile organizational structures at all levels. Company goals, team OKRs and also personal productivity can be determined with Mooncamp. GDPR-compliant features such as data encryption and granular access management, as well as cloud hosting based in Germany, speak for the manufacturer.
• Leapsome With Leapsome, you have a very intuitive and flexible system at your disposal, with which you can manage the performance of your employees* and create a personalized learning cycle. Leapsome puts the engagement of your teams in the foreground and unifies the representation of processes and orientation of the company.
• Loopline This manufacturer supports you in the continuous and automated survey of your employees. For this purpose, you are provided with detailed questionnaires on variable topics. With just one click, the cloud software collects all answers and delivers the results.
• Workpath Agile goal management with OKR, holistic, result-oriented and strategic management - these are the focal topics that you can use with Workpath. In addition, the software can be easily integrated into your process and system landscape to organize goals, metrics and projects centrally.
• Loopline The function of LoopNow focuses on feedback discussions and OKRs. Constructive feedback, improved collaboration and performance evaluations can be optimized. An integrated notebook also supports you in documenting successful as well as improvement-worthy meetings and aligning development steps with them.
• WeekdoneWith the help of Weekdone, OKRs, week reports, dashboards and feedbacks can be created and used. The tool provides a quick overview of the status quo of projects, allows feedback and supports interaction among colleagues via newsfeed.
• Zielnavigator With this software, the name is program. Zielnavigator helps your company to implement strategies, bring users up to date with the mission, vision and strategy, and communicate progress transparently. Additional features include the key figure module or the API interface for reading in data from third-party systems.
• Haufe X360 The OKR tool from Haufe supports the organization of OKRs as well as the linking of strategic plans with operational team goals. Dependencies are displayed transparently and centrally to simplify the OKR process. In addition to practical feedback options, the software also helps you to introduce the right mindset in order to firmly anchor the principles of OKR.
• WorkBoard Workboard provides real-time goal management solutions to improve company results and support executives. Defining goals clearly, working flawlessly and better coaching along with feedback are also central features that the US software manufacturer offers you.
• 15Five This software is especially a smart tool for HR executives to promote engagement and performance and combine them with OKRs. Support for strategic decisions and the encouraged influence of talents on company growth are at the forefront of the performance spectrum. In addition, 15Five offers training, coaching and a strong community for lively exchange.
• Mirro.io Mirro helps to set the priorities of a team and gives each team member enough room for exchange and feedback and promotes collaboration through simplified processes. With this tool, you put the individual as well as personal development of each entity of your company back clearly into the focus.
• Ally.io The OKR software from Ally gives managers, teams, and individuals insight into the entire work process and connects everyday tasks with the most important goals of your company. It follows the approach typical for OKRs that teams that see what they are accomplishing, engage more to create the best possible results.
• Quantive Alignment, transparency, and full focus on your OKRs - that's what Gtmhub sets. Focused alignment, agile organizational structures and engagement are the cornerstones taken up by Gtmhub using transparent OKRs. Whiteboards, sessions, KPIs and an intuitive structure ensure that you document your strategies and communicate them accessibly.
• Betterworks Betterworks provides clear and focused goal setting to support your team's performance, supported by check-ins, continuous feedback and reviews. In addition, Betterworks collects feedback from employees to prioritize desired measures and build trust.
• Kepp Solid Goals was designed to support business owners and project employees to stick to complex and particularly challenging goals. The software provides a practical roadmap to identify milestones and key results to stay on track.
• Perdoo The tool links OKRs with KPIs to make the direct impact on business success evident and facilitate decisions. Perdoo also helps to communicate strategies effectively so that employees are fully informed and can participate in creating value.

You want to learn more about the tools from Haufe? Then take a look at the overview page of the software manufacturer. Here you can find an overview of all products from Haufe and further information.

Conclusion

KPIs are the dashboard of your company, they show your vital signs and point to optimization potential. Which feature button you press or which lever is set in motion by your people when and how to influence these data is described by OKRs. They are the interactive echo to KPI controlling, without being a rigid instrument themselves. OKRs take place in your teams, they promote agile organizational design and describe proactive design elements to ultimately promote innovations and added value or simply to solve problems better.

OKRs and KPIs are therefore not in contradiction to each other, but rather - matched to each other - put the successful management of your company in the foreground. With the help of the right OKR software, you can depict this control centrally and transparently in order to realize your missions more easily. As already started at the beginning: OKR ... KPI ... use the two measurement instruments and thus lay the world of business at your feet.