Key Performance Indicators seem like some kind of alternative to OKRs. But they’re not. They’re complementary. KPIs are the day-to-day health checks and performance metrics. OKRs are what we use to improve our KPIs.

The company is an organism. It does business day-to-day. We can monitor its health by tracking some set of standard metrics - our KPIs. These tell us how we’re doing day-to-day. Using the KPIs, we can figure out what we need to improve in the company. Someone in the company will hold the concern for making that improvement, and will engage a Workflow to realize it. That Workflow, through its Q2 promise, includes an OKR focused on achieving those improvements. Once an OKR is achieved, it “precipitates” into the KPIs. For instance, we may monitor the kinds of purchase agreements we’re getting, maybe they’re all small contracts of $20k. We might decide we want to improve that, so we set some OKRs to increase the average size of a contract (which may involve all kinds of objectives and results, including more powerful tools or something). Once we meet the OKRs, they should translate into our KPIs - now our average contract size should be higher, and that’s become our new day-to-day KPI target.

Thus the KPIs become a kind of health check of the company that we can use to determine what OKRs we need to set in the next quarter (or year, etc.) to improve. Over time, many common OKRs will just mature into KPI targets and will become business as usual. This allows our OKR framework to really focus on what we need to do to improve, and take the company to the next level.

For more on the difference between OKRs and KPIs, see