KPIs and OKRs: What they mean and how they work together

Executive overview

KPIs and OKRs are often confused but serve distinct roles. A KPI (Key Performance Indicator) measures how well you are performing on a specific metric. An OKR (Objective and Key Results) is a goal-setting framework: a big destination paired with the milestones needed to reach it.

KPIs track the things you do. OKRs define where you are heading and what results mark progress. They are complementary — KPIs often feed into the key results within an OKR.

The key distinction: OKRs set direction; KPIs measure execution.

KPIs: key performance indicators

• A KPI is a metric that measures performance on something that truly matters.
• Not every number is a KPI — only those that are core drivers of success reach that status.
• Everything else is just a metric, a vanity metric, or a "good to know" number.
• Examples: number of booked sales calls, customer satisfaction score, Google review rating.
• The "key" part requires discretion — fewer, more meaningful metrics, not all measurable things.

OKRs: objectives and key results

• The objective is the overarching destination — the big vision you are working toward.
• Key results are the milestones that must be passed to reach the objective.
• Key results are things you can influence but cannot directly do by checking a box.
• Example: objective = beat the video game; key results = defeat the first boss, reach the next level.
• Business example: objective = grow the client base; key result = win 10 new clients (a lagging indicator you work toward, not a task you complete).

How KPIs and OKRs connect

• Actions and tasks produce KPIs; KPIs feed into key results; key results lead to objectives.
• A KPI might measure the initiatives or tasks that drive a key result (e.g. number of sales calls made).
• Neither replaces the other — they operate at different levels of the same chain.