The only way to know if your business is growing or not is to measure its performance. For several businesses, it is vital to know the current state to make better decisions suitable for business growth. Having your key performance indicators (KPI) is as essential as having objectives and key results (OKRS)
What Is KPI?
KPI short for Key Performance Indicators; measurable numbers are used to show how effectively your business is inching close towards attaining set goals such as expected end-year revenue. KPIs assist companies, teams, individuals, and organizations’ departments formulate goals and objectives and follow up on achievement progress.
In most businesses, KPIs demonstrate revenue targets and monthly growth of different business metrics. You can keep track of all routine activities in your business with KPI.
What Is OKR?
OKR, on the other hand, stands for Objectives and Key Result- this is a goal-setting framework that assists companies to develop objectives together with the measurable key results that provide support in the attainment of each set Objective. OKRs in business are used by businesses to communicate desired outcomes within the organization, concentrate on the most crucial areas that require changes, and produce critical results for your business.
KPI Vs. OKR: Objectives
In most circumstances, OKRs will point to your areas of improvement objectives- this is aimed at assisting you to attain KPI targets. Crucial results usually weigh OKRs to track the effects of the changes and improvements your employees decided to take. You can decide any area of your business with OKRs after learning about the differences between OKR vs KPI.
OKRs aims to help you decide what points exactly you need to improve on in your business and, based in line with that, how you will spend your time and resources in the next few months.
KPI Vs. OKR: Metrics
KPIs are metrics used by businesses to show performance. On the other hand, OKR is a goal-setting method that can help you improve performance, thus a positive change in your business. Usually, KPIs let point the areas to analyze, forming the basis for your OKRs.
Direction to Take
Although KPIs are used to measure performance, they don’t tell you what areas of your business require a change to grow. They are top-notch business performance metrics that you can analyze with precise frequency, such as weekly, monthly, and yearly.
OKRs are helpful in deciding what areas need to be changed, corrected, or improved. Once you’ve decided on the areas you believe need improvement, you can create an Objective focused on that specific area and Key Results- this is used to measure how far you’re from getting to this key Objective. Therefore, key results are specific to a particular focus area reflected by an Objective.
Have You Decided On KPI VS OKRs?
OKRs may be a new goal-setting framework, but every business has a plan and a yearly budget. These plans and the corresponding budgets are usually based on projections of KPIs, usually based on what you did in the past and what you target or expect to achieve.