KPIs and OKRs: enemies or allies?

Since 2013, with a video on YouTube where the CEO of Google Ventures it explains how Google used OKRs back then and later in 2018 with John Doerr's book, '0Evaluate What Matters’, OKRs have become popular in the world and what we see since then is a confusion with the alphabet soup of management tools, after all: what is the difference between KPIs (Key Performance Indicators) and OKRs (Key Performance Indicators) and OKRs (Key Objectives and Key Results)?

Come on, KPIs are key metrics that indicate the past, are rearview indicators, which show how was the progress, the situation, the health of processes and daily activities. From these historical data, it is possible to make decisions about what to do next. In general, they are indicators of revenue, customer satisfaction, quantities sold, costs, among others, and do not have a set deadline.

OKRs are framework setting ambitious goals with their own structure with Objective and Key Results, are a look forward. They have a deadline, usually quarterly, and it is recommended to use the other characteristics of SMART goals. And instead of using rearview indicators, it is more appropriate to use trend indicators in these KRs. Therefore, clearly the two tools have different purposes.

Back in 2017, when I found myself in the middle of the largest implementation of OKRs in the Americas, the following analogy helped us discern the best role of each: the KPIs are the indicators on the dashboard of a car: fuel, oil, among others. While the OKRs are the Waze. You need to know if you have gasoline to reach your destination, and you can miss the route along the way and recalculate it to reach your goal.

On the other hand, if the purposes are different, why do people confuse? The point is that, within the management process, at various times, the application of the concepts of the tools mix. KPIs exist by the nature of the operation, of what the company does and the current processes. Both have metrics and we see a KPI being KR, as well as improving a KPI being a goal. They are metrics and people want to improve the metric.

Deep down, confusion happens even when we do not identify the best time to use one concept and another. For this reason, it is essential to know and be able to apply both tools simultaneously, as they complement each other and will improve your management as a whole. It is like an art, there are different ways to apply a brush, an ink and both are means to create the final product.

In this sense, you need to pay close attention to the reality of your company in general and how management is being conducted, because from an existing indicator (a KPI), a business goal may arise (an OKR), but not all KPIs will need to be improved, including, often we will not have financial, material and even human resources to improve several at the same time.

In this scenario, it is necessary to learn to prioritize, choose where to bet the chips at that particular time: these chips are OKRs. That is, you need to analyze the KPIs, which are the indicators that have already happened, to be able to plot the OKRs, which will still happen. And so, everything will be interconnected and making sense, so that you meet your goals, achieve your goals and achieve the best results at the end of the cycle.

You can not solve several problems at once, you need to understand what problems you face to eventually increase your revenue. Only from this, it is possible to define your OKRs, prioritize the problems and as you move forward in the direction of solving them properly, then you choose another, adjusting your route and going increasingly against your goal.