Let me explain the difference between OKRs and KPIs.

While reading my earlier blog on what is an OKR, I am sure you would have gotten a doubt between OKR and KPI.

Let me explain this using customer service process. If you are running a call center or managing a customer service operation, I am sure you will be tracking no. of complaints or calls you get everyday, the service level (that is the time you take to attend to these calls) and how much time you take to resolve the complaints. So, all these are key performance indicators or measures of a process. They help to determine the health of the process. You will be measuring this for eternity though the target could change from year to year.

On the other hand, your management might say that the cost of running the service operations is high and ask you to bring down the cost by 20% in 6 months. So, this is an objective in OKR process. You might take many initiatives to bring this down but how will you know that you are achieving the goals or on track to achieve the goal. The key results that you will track are productivity and no. of processes automated.

It is possible that productivity could be a KPI in your process. So, we are leveraging the KPI for OKR. Note the objective is for a 6-month time period. After this, I could run another OKR – this time to improve the customer satisfaction – and the key results would be vastly different.

By the way, this is what happens in many organizations right – reduce cost in one year and increase cust sat the next year – and so it goes.