Strategic execution will make or break many companies. But proper execution is difficult.
In fact, only 2% of business leaders are confident in their ability to achieve 80-100% of their strategic objectives.
All employees work in different ways to achieve the same goals – driven by your company’s priorities. In order to focus on measurable outcomes, you need to provide your team with a common vocabulary and process.
Align what you’re aiming to achieve with Objectives and Key Results (OKR) and Key Performance Indicators (KPI). So what's the difference in OKR vs KPI?
Keep reading to discover the difference between these two management strategies and how establishing these measurable values will propel your team to success.
OKR vs KPI: What’s the difference?
If you have a dream for your company, you need OKR strategies that take you there. But what about the processes already in place? KPIs measure the output and success of your existing activities.
More often than not, a KPI is the starting point for an OKR that will break your business out of the status quo.
Key Performance Indicators (KPI)
KPIs help you evaluate your success at reaching and surmounting goals.
A KPI demonstrates how effectively you are achieving your strategic business objectives. Choosing the right KPI depends on your business and which part of it you are looking to track.
They can track any number of measurements, including timeliness, compliance, behaviors, economics, personnel performance, quality, and more.
As an example, sales metrics are popular KPIs used by management to measure the success of sales activities within a company.
Once selected, you will track KPIs with a real-time reporting tool. Several companies offer dashboards that can extend valuable insights into your company’s performance.
The best KPIs accurately measure targets to provide objective evidence towards reaching a common goal. Businesses use them to monitor the degree of performance changes over a specific amount of time.
Objectives and Key Results (OKR)
OKRs are different, as they’re goals you set within your organization. They connect personal, team, and company goals to measurable results. This helps all members of your organization work in a unified direction.
To implement and track OKRs, you will use specialized OKR software.
With OKRs in place, everyone knows what is expected of them. They are public for a reason – so that team members move towards the same goals with an awareness of what individuals and teams are working on.
To set and manage goals, OKRs are typically a part of a business’s quarterly planning process.
OKR and KPI Work in Harmony
Now that you know what's OKR vs KPI, you know it's hard to have an OKR without effective KPIs in place. The most effective businesses use both to monitor and improve business strategy.
If you’re confident in your existing KPIs, all you need is to develop OKRs that work for your business. Implement OKR software that helps you effectively track your business performance over time.
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