OKRs and KPIs are standard workplace terms. They are abbreviations for Objectives & Key Results, and Key Performance Indicators. Each term has its importance in the world of work, and this article will break down their difference, when and how to use each.

Resources 📚:

• OKRs vs KPIs: How They Differ, When to Use Each And Best Practices

• From Vision to Strategy Execution: How to Write and Execute Effective OKRs

• 100+ OKR examples/templates for early-stage tech Companies

What are OKRs?

OKRs stands for Objectives and Key Results. It is a goal-setting framework used in companies and organisations to coordinate and align employee actions towards measurable and specific objectives. It involves outlining and defining team-level and company-wide goals to ensure overall focus on the right tasks and targets.OKRs help companies track impact and measure progress.

Here are some examples of OKRs:

Objective: Increase sales revenue

Key Result 1 - Increase average monthly subscription value from $50 to $100

Key Result 2 - Increase web conversion rate by 30%

Objective: Increase brand awareness on social media

Key Result 1 - Increase social media engagement rate from 20% to 50%

Key Result 2 - Retain five influencers as brand ambassadors.

Key results

A Key result must be named to save your objective. Your key result title should be brief but descriptive. These key results will be your tasks to track your objective progress.

Note:

While key results can go over 100% completion, anything over 100% completion will not result in the objective itself going above 100% completion.

Metrics can be measured by a percentage, a monetary value, a number, or completed/not completed.

• Percentage - Using a percentage as the metric for your key result allows you to decide what 20%, 50%, or 100% is. This metric is used for key results where completion seems more subjective.

• Monetary value - Using a monetary value as the metric for your key result means setting a financial goal.

• Number - Using a number as the metric for your key result means setting a specific numeric goal.

• Completed/Not completed - Using completed/not completed as the metric for your key result allows you to focus on your key result as a yes or no task. This metric is commonly used for key results where completion seems more objective or abstract.

Examples of key results using these metrics

% KR: Reduce the cost of hire by 30% (Start value could be higher than the target value here; anything below 30 would be considered 100%)

% KR: Increase the OKRs completion rate for team members from 60% to 70% (Start value would be 60, target value would be 70; anything above 70 would be considered 100% complete)

$ KR: Expand successfully into the EMEA region by achieving $1,000,000 in ARR

$ KR: Increase average account value to $500k (Start value would be 0, target value would be 500 or 500,000; anything above 500 or 500,000 would be considered 100% complete)

KR: Hire and train at least 20 new sales associates

KR: Reduce manufacturing time for Abc product to 5 hours (Start value could be higher than target value here; anything below 5 would be considered 100%)

Completed/Not completed KR: Product design completed by Dec 18

Complete/Not completed KR: Decide on bug ticketing software.

Start and target values

Start values represent where your starting point.

Target values represent where you are aiming to finish. Therefore, your overall objective progress will increase as you approach your Target value.

At this time, Beam does not allow percentages below 0. We suggest using Complete/Not complete as your metric for key results that need a negative threshold.

What are KPIs?

KPIs stand for Key Performance Indicators. They are measurements to track the process efficiency of a particular team/company goals. They typically apply to employee, project and product performance. They quantify how well a business meets targets and evaluate its progress towards stated outcomes.

Here are some examples of KPIs:

1. New inbound leads

2. Lead conversion

3. Customer acquisition cost

4. Organic traffic and leads

5. Actual vs planned hours

6. Cash flow

7. Customer complaints

8. Turnover rates

9. Ticket resolution time

10. Server downtime

Evaluate the success of your organization or specific activities using Key Performance Indicators (KPIs).

Easily store, monitor, and track KPIs to receive automatic updates on progress. KPIs are commonly utilized alongside management methodologies like OKRs to assess performance.

Beam offers real-time and constantly updated KPI data, providing valuable insights for analysis and informed decision-making.