Adapt to Win

Chapter 4OKRs in Context

Key Results (KRs) Versus Key Performance Indicators (KPIs)

One topic that often confuses people who are new to OKRs is how to rationalize all the data they’ve historically collected and reported on using key performance indicators (KPIs). KPIs get quite a workout—in some organizations, all their metrics are called KPIs. It’s not unusual to see strategic goals measured by KPIs—some strategy methodologies explicitly use the term, exacerbating the tendency to confuse strategy and tactics. Operational metrics are appropriately called KPIs, but too many organizations track a lot of KPIs, substituting quantity for quality. Organizations that substitute quantity for quality of metrics make a mockery of the “K” in KPI (can all these numbers really be “key”?). I suspect there is an inverse relationship between the number of metrics being tracked and the likelihood that the most impactful metrics are being tracked. It’s not easy, but it is important that leaders invest in aligning everyone on which few metrics are key business drivers and proactively stop reporting on metrics that cannot be correlated with business drivers. It’s also helpful to bias strongly over time to track leading indicators as the organization improves its reporting and forecasting capabilities.

When I’m rolling out OKR programs with clients, I typically tell them to keep the good KPIs they use for operational governance, stop tracking all the extra metrics that aren’t clearly tied to ...