OKR vs KPI: Differences, Examples and When to Use Each

The simplest OKR vs KPI examples show the difference in one line: a KPI such as “gross margin” or “on-time delivery rate” tells you how healthy the business is right now and stays on your dashboard for years. An OKR such as “Win our first five clients in healthcare, measured by 20 discovery meetings and five signed contracts by 30 June” describes a change you want this quarter. Use KPIs to monitor. Use OKRs to improve.

Below you will find side-by-side examples for common teams, a comparison with SMART goals and a decision rule you can apply to your own dashboard in ten minutes.

What is the difference between OKR and KPI?

Both are measures, and both use numbers, which is why they get confused. The difference is purpose and time.

John Doerr’s site, whatmatters.com, puts the split neatly: OKRs measure change, while KPIs measure the health of an ongoing operation. A useful picture is a car. KPIs are the dashboard: speed, fuel, engine temperature. You watch them all the time and act when one moves out of range. An OKR is the trip you plan: where you want to be by Friday and the milestones that tell you whether you are on the way.

In practice:

• KPIs are permanent. You will probably track revenue, margin, churn and cash for as long as the company exists.
• OKRs are temporary. They usually run for a quarter. When the change is achieved, the objective is retired and its measure may return to being a KPI.
• KPIs have a normal range. OKRs have a target that stretches beyond normal.

What is a KPI?

KPI.org, run by the Balanced Scorecard Institute, describes KPIs as the critical, quantifiable measures of progress toward a desired result. Most KPIs are lagging measures: they report results after the fact. Robert Kaplan and David Norton’s balanced scorecard, first published in Harvard Business Review in 1992, encouraged managers to look beyond financial KPIs and add measures for customers, internal processes and learning.

There is no magic number of KPIs. The right list is the smallest set that tells you, at a glance, whether something important is going wrong. If a KPI has not changed a decision in six months, question whether you need to report it. For examples by role, see our list of KPI examples for employees.

What is an OKR?

OKRs were developed by Andy Grove at Intel. John Doerr learned the method there as an engineer in the 1970s, introduced it to Google’s founders in 1999, and later popularised it in his 2018 book Measure What Matters. Doerr’s site suggests a simple sentence to write one: “I will (objective) as measured by (key results).”

• The objective is qualitative, short and motivating. It answers “where do we want to go?”
• The key results are measurable and time-bound. They answer “how will we know we got there?” Doerr’s site recommends three to five per objective.

Google’s re:Work guide adds two practical rules. First, pick three to five objectives with about three key results each. Second, score each key result from 0.0 to 1.0 at the end of the period. Because good OKRs stretch, Google treats an average of 0.6 to 0.7 as the sweet spot. Hitting 1.0 every time suggests the goals were too easy. Doerr’s site also distinguishes committed OKRs, which you are expected to hit fully, from aspirational ones, which are deliberate stretches.

Want ready-made examples? Our list of OKR examples for managers has copyable OKRs for sales, operations, customer service and more.

OKR vs KPI examples side by side

The table below shows how the same area of the business can have a KPI you watch and an OKR you pursue. All examples are hypothetical and meant as templates.

Team	KPI (monitor all year)	OKR (change this quarter)
Sales	Monthly new revenue; win rate	O: Break into the healthcare segment. KR1: 20 discovery meetings with clinics. KR2: 5 signed contracts. KR3: Average deal size of at least $8,000.
Customer service	First-response time; customer satisfaction score	O: Make support a reason customers stay. KR1: First response under 2 hours on 90% of tickets. KR2: Satisfaction score from 82% to 90%. KR3: Publish 25 help articles for the top questions.
Operations	On-time delivery rate; rework rate	O: Deliver every order right the first time. KR1: Rework rate from 6% to 3%. KR2: On-time delivery from 88% to 95%. KR3: Pre-dispatch check used on 100% of orders.
Marketing	Qualified leads per month; cost per lead	O: Become the go-to voice on our niche. KR1: Grow newsletter from 800 to 2,000 subscribers. KR2: 3 guest articles on industry sites. KR3: 40 qualified leads from content.
People	Staff turnover; time to fill roles	O: Make our first year a great experience. KR1: 100% of new hires complete a 30-day plan. KR2: 90-day retention of new hires at 95%. KR3: New-hire survey score of at least 4.5 out of 5.

Notice two things. Several key results are simply KPIs with a new target and a deadline. And the OKR covers only one area that needs to change, while the KPIs keep running in the background.

OKR vs KPI vs SMART goals

SMART goals come up in every conversation about OKRs and KPIs, so it helps to place them. In a short 1981 article in Management Review, George T. Doran proposed that a well-written objective should be Specific, Measurable, Assignable (someone owns it), Realistic and Time-related. Later versions often swap in “Achievable” and “Relevant”. SMART is a writing checklist for one goal, not a goal system.

OKR vs KPI vs SMART goals

	KPI	OKR	SMART goal
What it is	An ongoing health measure	A goal system: objective plus key results	A checklist for writing one goal
Time frame	Continuous	Usually a quarter	Whatever the goal states
Ambition	Stay in a healthy range	Stretch; 0.6 to 0.7 is a good score	Realistic by design
Origin	Performance management, balanced scorecard	Andy Grove at Intel; John Doerr	George T. Doran, 1981
Best for	Spotting problems early	Focused change and alignment	Making any goal clear
Typical owner	A function or role	A team, with named owners per key result	An individual or team

Why bother with specific goals at all? Edwin Locke and Gary Latham’s 2002 review of goal-setting research found that specific, difficult goals consistently beat vague encouragement. In their words, “when people are asked to do their best, they do not do so.” Both KPIs with targets and OKRs give people that specific reference point.

A worked example: one company, KPIs and one OKR

Here is a hypothetical example to show how the pieces fit. Imagine a 25-person company that installs and maintains office IT equipment. Its owner reviews six KPIs every month: monthly revenue, gross margin, number of active maintenance contracts, contract renewal rate, average time to resolve a support ticket and cash in the bank.

Five of the six are stable. One is not: the renewal rate on maintenance contracts has slipped over three quarters. Nobody owns a plan to fix it, because everyone is busy with day-to-day work.

At the quarterly review the leadership team turns that one KPI into an OKR:

• Objective: Make renewing with us the obvious choice.
• KR1: Raise the contract renewal rate from 78% to 88% by the end of the quarter.
• KR2: Hold a review meeting with 100% of clients 60 days before their renewal date.
• KR3: Cut average ticket resolution time for contract clients from 9 hours to 6 hours.

They then add one weekly lead measure for the account managers: “renewal review meetings booked this week”. The other five KPIs stay on the dashboard, watched but not pushed.

At quarter end, the team scores each key result between 0.0 and 1.0 and asks what they learned. If renewals are back in a healthy range, the measure returns to being a plain KPI and the team picks the next number that needs attention. If not, they keep the objective for another quarter with sharper lead measures.

The numbers in this example are invented. The pattern is what matters: many KPIs to watch, one OKR to change, and a weekly behaviour that connects the two. Delegating ownership of each key result to a named person, as described in our guide on how to delegate tasks effectively, keeps the work from falling back to the owner.

When should you use OKRs, KPIs or both?

Use this matrix on each measure that matters to you. Ask two questions: how important is this to the business, and does it need to change significantly in the next three months?

Decide: KPI, OKR or neither?

Importance to the business

HighLow

KPI: monitorImportant and healthy. Keep it on the dashboard and set an alert range.

OKR: change itImportant and off track, or needs a step up. Make it a key result this quarter.

Drop or automateNot important, no change needed. Stop reporting it by hand.

Team taskNeeds fixing but is not strategic. Handle it as a normal project.

LowNeed for change in the next 90 daysHigh

A simple decision rule for small teams:

1. If a measure is healthy, it is a KPI. Watch it monthly.
2. If a vital KPI is drifting, or you need a step change, write one OKR around it for the next quarter.
3. If you have more than three company OKRs, you have too many. Move the rest back to KPIs or to next quarter. Our guide on how to prioritize when everything is important helps with that cut.

How do OKRs and KPIs work together?

The best setups connect them in a loop. KPIs show where change is needed. OKRs drive the change. Lead measures turn the change into weekly behaviour.

Connect KPIs, OKRs and weekly action

1. 1Review KPIsOnce a quarter, look for the one vital number that is off track.
2. 2Write one OKRObjective in plain words, three measurable key results.
3. 3Add lead measuresOne weekly behaviour that predicts each key result.
4. 4Check weeklyReview progress in a short team meeting.
5. 5Score and resetScore 0.0 to 1.0, then return stable measures to KPIs.

Step 1: Review your KPIs once a quarter

Look at your dashboard and ask: “Which one number, if it improved, would make the biggest difference?” That is your candidate.

Step 2: Write one OKR

Use Doerr’s sentence: “We will (objective) as measured by (key results).” Keep key results to outcomes, not tasks. “Launch a new onboarding email” is a task. “Raise 90-day retention from 70% to 80%” is a result.

Step 3: Add a lead measure to each key result

Key results are usually lag measures. They tell you at the end whether you made it. Add one behaviour per key result that the team controls weekly. Our pillar guide on lead and lag measures shows how to choose them and how to lay out a scoreboard.

Step 4: Check progress every week

A 20-minute slot in your weekly team meeting is enough. Review the scoreboard, discuss what blocked progress and agree one or two commitments each.

Step 5: Score and reset at quarter end

Score each key result, talk about what you learned and decide what moves back to the KPI dashboard. Keep OKR scores out of bonus decisions. Doerr’s site describes OKRs as divorced from compensation, because linking them to pay pushes people toward safe targets. Use KPIs, behaviour and results when you write a performance review.

What are the most common mistakes?

If your team struggles with focus more broadly, the discipline of choosing one wildly important goal from the 4 Disciplines of Execution is a good complement to OKRs. It forces the same hard choice: what matters most right now?

Summary

KPIs and OKRs answer different questions. KPIs ask, “Are we healthy?” and run all year. OKRs ask, “What must change this quarter?” and run for a set period with a stretch target. SMART is the checklist that makes either one clear. Start with a short KPI dashboard, turn the one drifting vital number into an OKR, give each key result a weekly lead measure, and review progress every week.

Ready to draft your first one?