Do OKRs replace KPIs?
There’s a lot of buzz about OKRs (Objectives and Key Results), and for good reason. Businesses are shifting to more agile ways of working—moving faster from concept to validation to implementation. Traditional annual planning cycles are being replaced with shorter, more responsive 90-day (quarterly) planning cycles. To keep up, businesses need a new way to set focus areas and track progress. That’s where OKRs help sharpen the focus.
“We don’t need KPIs anymore now that we have OKRs,” a prospective client told me recently. Their thinking? KPIs are too slow, too rigid. OKRs are more dynamic and responsive. So out with the old, in with the new!
But that’s a misunderstanding of what they are and what they do. OKRs and KPIs serve different purposes, and both are valuable for leadership of any growing business.
So let’s set the record straight.
KPIs and OKRs: Complementary, Not Competing
There’s a reason KPIs and OKRs often get mixed up—they both involve measuring performance. But here’s the crucial difference:
- KPIs track what’s happening—they ensure the business is running effectively.
- OKRs drive what’s next—they define where the business is going.
Both play a role, but they aren’t interchangeable. Let’s break them down.
What is a KPI?
A KPI is an ongoing measure of business performance. It’s a small set of key metrics that help track whether your business is healthy, efficient, and on track—not just in terms of results but also in early signals that indicate whether performance is trending in the right direction.
KPIs typically fall into core areas like:
Sales Performance – Not just total revenue, but what drives it for example:
• Pipeline health (e.g., the number of high-quality leads generated vs. targets)
• Conversion rate at key sales stages (Are deals progressing, or is there friction in the process?)
Operational Efficiency – Metrics that ensure smooth delivery, like:
• Customer response times (How quickly are support queries being acknowledged and resolved?)
• Order accuracy rates (Are mistakes happening that could damage customer trust?)
Financial Stability – Not just end-of-month profit, but financial resilience such as:
• Cash runway & liquidity ratios (Can we cover upcoming costs without stress?)
• Average debtor days (Are clients paying on time, or are payment terms becoming longer?)
KPIs should highlight problems before they affect performance—giving leadership confidence in where to focus, while also freeing them up to concentrate elsewhere when everything is running smoothly.
What Is an OKR?
While KPIs focus on tracking ongoing business health, OKRs are about driving change—they define what needs to improve, evolve, or transform to achieve strategic goals.
OKRs follow a simple structure:
📌 Objective → A clear, ambitious goal that pushes the business forward.
📌 Key Results → Measurable outcomes that indicate progress toward the objective.
For example:
🎯 Objective: Improve customer satisfaction across all service channels.
✅ Key Result 1: Reduce average response time from 5 hours to 2 hours.
✅ Key Result 2: Increase CSAT (Customer Satisfaction Score) from 80% to 90%.
✅ Key Result 3: Implement a new AI chatbot for 24/7 support.
OKRs set ambitious targets that push teams toward progress, innovation, or transformation. They are temporary—once an objective is achieved, the OKR disappears. It’s not about maintaining but about achieving something new.
How OKRs and KPIs Work Together
Let’s say you’re expanding your SaaS business into Europe. You need to drive growth while keeping the business running efficiently.
📌 OKR: Expand our market share in Europe by 20%
✅ KR1: Increase inbound leads from EU by 50%
✅ KR2: Improve conversion rate from 15% to 25%
✅ KR3: Launch localised marketing campaigns in 3 new countries
At the same time, you still need to track ongoing business performance. That’s where KPIs come in:
📊 Supporting KPIs:
✅ Monthly EU Sales Revenue – tracks whether the expansion is delivering real growth
✅ Customer Acquisition Cost (CAC) per Region – ensures the new market is profitable
✅ Churn Rate – makes sure customer retention isn’t being neglected while focusing on new business
OKRs push progress. KPIs keep everything stable.
If you drop KPIs, you have no idea if your business is running efficiently. If you ignore OKRs, you might be maintaining the business, but not moving it forward. That’s why they work best together.
Bringing It All Together
OKRs and KPIs aren’t competitors—they’re complementary. Used well, they bring focus and balance, helping businesses drive strategic change without losing sight of the fundamentals.
Yet many companies get this wrong:
🚩 Some chase OKRs without a strong foundation, leading to chaos
🚩 Others obsess over KPIs but fail to push forward, resulting in stagnation
The best-run businesses know it’s not about choosing one—it’s about using both effectively.
So, here’s the real question: Are your KPIs and OKRs working together? Or are they pulling in opposite directions?
If you’re unsure—or you suspect there’s room to improve—let’s talk. I help business leaders cut through the noise—designing OKRs and KPIs that actually work, so they drive clarity and growth (without the clutter).
⬇️ Book a call in below and let’s make sure your metrics move you forward ⬇️
