KPIs (Key Performance Indicators) are metrics used to measure the performance of a key area of a company. They are used to track progress and ensure growth. On the other hand, key results are tools that have a positive impact on the performance of a given metric. OKRs (Objectives and Key Results) is a strategic framework, while KPIs are measures that exist within a framework.
The objectives of KPIs are usually achievable and represent the result of a process or project that is already underway, while the objectives of OKRs are more aggressive and ambitious. The key results are the final results that your team uses to measure whether the objective was successful or not. The key performance indicator (KPI) is the quantifiable measure used to evaluate that success. When it comes to using the key results versus KPIs approach, the right choice for your organization depends entirely on your company.
The combination of objective and key results often works best for larger organizations because it is stronger than a list of key performance indicators. Companies generally think that the KPI should be one of the key results of the objective, but this is not the best practice. Team discussions are essential for team alignment, as they allow us to see which areas have more impact than others and have more faith and confidence in some ideas to achieve real change. A shift in nomenclature can turn a key result into a KPI (or vice versa).
The purpose of operating with this goal setting framework in mind is to align executors with the key results that demonstrate success. By setting objectives and tracking key results and performance indicators, it's easier to get the whole team to cooperate.