OKR vs KPI: Understanding the Key Differences

OKRs, KPIs, MBOs, BSCs, EOS—with so many acronyms and metrics floating around, it's no wonder there's confusion about how they all fit together. If there's one question I get asked most often as an OKR coach (next to “How do I connect OKRs to performance pay?”) it's this:

"What's the difference between a Key Result and a KPI?"

I get it. Both involve metrics, both track important business information, and tons of organizations use the terms interchangeably. But treating them as the same thing? That's one of the fastest ways to completely undermine your goal-setting efforts.

The Real Distinction: What KPIs Actually Are

Let's just get clear on vocabulary here. KPIs are Key Performance Indicators, and they're often implemented in organizations as goals—but that's not actually coherent.

The meaning is right there in the name. KPIs indicate your performance.

If your organization had a human body, KPIs would be like its vital signs—the metrics you monitor to make sure everything's functioning properly. Think of them as your business health indicators.

When customer satisfaction drops, you know something's wrong. When employee retention starts trending downward, that's a signal you need to pay attention. But these aren't goals in themselves—they're telling you about the health of your business.

What OKRs Actually Do

OKRs are Objectives and Key Results, and those are aspirational, inspirational, experimental goals that help your organization transform, grow, and innovate. Key results are your stretch goals—they challenge you to go beyond the status quo and make meaningful improvement on what matters most.

So key results set a target for what wild success might look like if everything were to go right.

Here's where people get tripped up: they go straight to their existing metrics and KPIs and call them key results. But there's a real distinction here.

KPIs tell you how you're doing. Key results challenge you to make things better.

Let me show you what this looks like: Imagine you're tracking customer satisfaction as a KPI. If that goes down, you know something's wrong—the KPI identifies that there might be an issue. But a key result would be about improving that score, like increasing it from 80% to 90%. The KPI identifies the metric that needs attention. The key result puts a line in the sand about what improvement actually looks like.

The Trap Most Organizations Fall Into

Some organizations try to solve this by creating KPIs first and then writing key results for those KPIs. And look, identifying KPIs is never a bad thing. But taking this route can lead to long lists of key results that aren't prioritized because—if we look at our KPIs—we're gonna want to improve everything.

In that situation, you're measuring what you can measure instead of setting goals around what's truly most important to improve or change.

Here's what I encourage instead: start with the question, "What's actually most important to achieve measurably?"

You can also ask yourself: "How might we know objectively that we're making progress?" Even if you can't measure those things perfectly today—they might not be instrumented business metrics—there are all sorts of ways to create measurability or instrument a new metric when it's important enough to do so.

Don't limit yourself to what you're already measuring. That's how organizations miss opportunities for meaningful transformation.

How They Work Together

The most effective organizations I work with use both KPIs and Key Results as part of an integrated system:

Your KPIs are the vital signs you're monitoring. Customer satisfaction scores, employee retention rates, monthly recurring revenue—the metrics that tell you if your business is healthy.

Your Key Results are the specific targets you're actively pursuing during a goal period. "Increase customer satisfaction by 15% from 8.0 to 9.2 by improving our onboarding experience." "Reduce customer onboarding time by 40% from 10 days to 6 days."

Notice how the KPI provides ongoing monitoring while the Key Result drives focused improvement effort.

The Exception: When KPIs Become Key Results

There's one important situation where a KPI can become a Key Result: when it's trending in the wrong direction and needs focused attention to improve.

If customer satisfaction has been dropping for three months, that KPI might need to become a Key Result with a specific improvement target. Once you've improved the metric to a healthy level, it goes back to being a KPI you monitor rather than actively work to improve.

Getting This Right

Remember: KPIs tell you if your business is healthy. Key results challenge you to make it better.

Keep them distinct, and you'll have much more clarity about what you're trying to achieve. Not every KPI needs to become a Key Result, and not every important outcome needs constant KPI monitoring.

Create Key Results when you need improvement or transformation, not just tracking.