OKR vs KPI: Define and Measure Your Project Goals 2025

In project management, measuring performance and progress is essential. Two frameworks dominate: OKR (Objectives and Key Results) and KPI (Key Performance Indicators). While often confused, they serve different needs. Discover how to use them effectively.

What is a KPI?

Definition

A KPI (Key Performance Indicator) is a key performance indicator that measures the effectiveness of an activity or process against defined objectives. KPIs are typically stable over time and measure the operational health of an activity.

KPI Characteristics

Nature:

• Continuous measurement indicators
• Measure current state and evolution
• Focused on operational monitoring

Temporality:

• Measured regularly (daily, weekly, monthly)
• No defined end date
• Tracked long-term

Objective:

• Maintain performance
• Detect anomalies
• Monitor activity health

Project Management KPI Examples

Timeline KPIs:

• On-time delivery rate: 85% of tasks delivered on time
• Average ticket resolution time: 2.5 days
• Average schedule variance: +3%

Quality KPIs:

• Production bug rate: 2.1 bugs per release
• Customer satisfaction rate: 4.2/5
• Negative user feedback count: 12 per month

Cost KPIs:

• Budget variance: -5% from initial budget
• Cost per delivery: $2,500
• Average monthly expenses: $45,000

Team KPIs:

• Resource utilization rate: 78%
• Team average velocity: 45 points per sprint
• Turnover rate: 8% annually

Value KPIs:

• Project ROI: 185%
• Return on investment time: 14 months
• Value delivered per sprint: $120,000

What is an OKR?

Definition

An OKR (Objectives and Key Results) is a framework for defining and tracking ambitious goals. It consists of an Objective (qualitative, inspiring) and 2 to 5 Key Results (quantitative, measurable) that enable achieving that objective.

OKR Structure

Objective:

• Qualitative and inspiring
• Ambitious and motivating
• Answers "Where do we want to go?"

Key Results:

• Quantifiable and measurable
• 2 to 5 per Objective
• Answer "How will we know we've achieved the objective?"

OKR Characteristics

Nature:

• Ambitious and transformational goals
• Focus on change and improvement
• Oriented toward achieving a target outcome

Temporality:

• Short cycles: quarters or semesters
• Defined end date
• Regularly reevaluated

Objective:

• Push for innovation
• Align teams on common priorities
• Achieve extraordinary results

Project Management OKR Examples

OKR 1: Drastically improve product quality

Objective: Become the quality reference in our industry

Key Results:

• KR1: Reduce production bug rate from 15 to 3 bugs per release
• KR2: Achieve an NPS score of 50 (currently 32)
• KR3: Reach 95% automated test coverage (currently 65%)
• KR4: Reduce average incident resolution time from 4h to 1h

OKR 2: Accelerate value delivery

Objective: Double our delivery capacity while maintaining quality

Key Results:

• KR1: Increase team velocity from 40 to 80 points per sprint
• KR2: Reduce lead time from 20 days to 10 days
• KR3: Deploy to production minimum 2 times per week (currently once weekly)
• KR4: Automate 80% of current manual tests

OKR 3: Transform user experience

Objective: Create an exceptional user experience that builds loyalty

Key Results:

• KR1: Reach 100,000 monthly active users (currently 45,000)
• KR2: Increase D+30 retention rate from 40% to 65%
• KR3: Reduce checkout abandonment rate from 75% to 40%
• KR4: Achieve a SUS (System Usability Scale) score above 80

OKR vs KPI: Key Differences

1. Purpose and philosophy

KPI:

• Measure and maintain current performance
• Ensure everything works as expected
• Detect problems and deviations

OKR:

• Push toward ambitious goals
• Transform and significantly improve
• Innovate and exceed current limits

2. Temporality

KPI:

• Continuous and permanent
• No end date
• Measured regularly over time

OKR:

• Cyclical (quarterly or semi-annually)
• Defined start and end date
• Change each cycle

3. Nature of metrics

KPI:

• Measures of existing state
• Health indicators
• Stable values with slight variations

OKR:

• Improvement targets
• Significant changes aimed for
• Large gap between starting point and objective

4. Ambition level

KPI:

• Realistic and achievable
• 100% achievement is the goal
• Failure if objective not met

OKR:

• Ambitious and stretch goals
• 70% achievement considered success
• Encourage aiming high

5. Scope

KPI:

• Operational and tactical
• Measure specific activities
• Often departmental or by process

OKR:

• Strategic
• Result and impact oriented
• Aligned with company vision

6. Review frequency

KPI:

• Continuous dashboard
• Weekly or monthly review
• Automatic alerts if deviation

OKR:

• Regular check-in (weekly or bi-weekly)
• Complete end-of-cycle review
• Key Results adjustment if needed

When to use KPIs?

Appropriate contexts

1. Operational monitoring You manage an established activity and need to monitor that everything works correctly.

Examples:

• Track server utilization rate
• Measure average API response time
• Monitor service availability rate

2. Recurring processes Your team executes repetitive processes that must remain stable and performing.

Examples:

• Sprint on-time delivery rate
• Average bugs per feature
• Average code review time

3. Compliance and governance You must prove compliance with standards, regulations, or contractual commitments.

Examples:

• Contractual SLA compliance
• GDPR compliance (request response time)
• Test coverage rate for certification

4. Financial management You track project financial and budget health.

Examples:

• Monthly budget variance
• Cost per velocity point
• Burn rate

When to use OKRs?

Appropriate contexts

1. Transformation and change You seek to significantly change how the team or product functions.

Examples:

• Move from monolithic to microservices architecture
• Transform waterfall team to agile team
• Migrate to cloud

2. New product or major feature launch You need to align the entire organization on an ambitious goal.

Examples:

• Launch new product and reach 50,000 users in 6 months
• Conquer new geographic market
• Create new revenue stream

3. Critical problem resolution You face a major challenge requiring drastic improvement.

Examples:

• Drastically reduce customer churn
• Significantly improve application performance
• Resolve major technical debt

4. Strategic alignment You need to align multiple teams on common priorities.

Examples:

• Align Product, Engineering, and Marketing on growth
• Coordinate multiple teams on major redesign
• Create cohesion around company objectives

Can both be used together?

Absolutely! It's even recommended.

OKRs and KPIs are complementary and serve different needs. A mature organization uses both.

Coexistence model

KPI: The operational dashboard

• Maintain business as usual
• Ensure nothing degrades
• Trigger alerts in case of problems

OKR: The strategic compass

• Define where the organization wants to go
• Challenge to significantly improve
• Create alignment and motivation

Concrete example: Product development team

Permanent KPIs (always monitored):

• Average velocity: 50 points/sprint
• Availability rate: > 99.5%
• API response time: < 200ms
• Test coverage rate: > 80%
• Production bugs: < 5 per release

Q1 2025 OKR:

Objective: Radically transform our users' mobile experience

Key Results:

• KR1: Increase mobile conversion rate from 2.3% to 5%
• KR2: Reduce initial loading time from 4s to 1.5s
• KR3: Achieve Lighthouse score of 95+ (currently 68)
• KR4: Increase mobile engagement from 3 min/session to 8 min/session

In this example:

• KPIs ensure fundamentals remain solid
• OKR pushes team to accomplish something ambitious
• If KPIs degrade, alert and act immediately
• If OKR only reaches 70%, it's still success as we progressed significantly

How to define good OKRs?

Golden rules

1. Inspiring and qualitative objectives

• Avoid flat and bureaucratic formulations
• Use inspiring and motivating language
• Ask yourself: "Does this make me want to get up in the morning?"

Bad example:

• Objective: Improve product metrics

Good example:

• Objective: Become the most loved product in our industry

2. Measurable and verifiable Key Results

• Each KR must have a number
• Must be objectively verifiable
• Always include starting point and target

Bad example:

• KR: Improve customer satisfaction

Good example:

• KR: Increase NPS from 32 to 50

3. Ambitious but achievable

• Aim for 70% achievement as success
• If you systematically reach 100%, your OKRs aren't ambitious enough
• If you never reach 50%, they're too ambitious

4. Limited in number

• 3 to 5 Objectives maximum per quarter
• 2 to 5 Key Results per Objective
• Focus rather than dispersion

5. Vertically and horizontally aligned

• Team OKRs must contribute to company OKRs
• OKRs from different teams must be coherent with each other

Template for writing an OKR

OBJECTIVE: [Action verb] + [Inspiring result]

I will achieve this objective as measured by:

KR1: [Metric] will go from [Current value] to [Target value] KR2: [Metric] will go from [Current value] to [Target value] KR3: [Metric] will go from [Current value] to [Target value]

Applied example:

OBJECTIVE: Become the reference platform for creative freelancers

I will achieve this objective as measured by:

KR1: Active registered users will go from 12,000 to 35,000 KR2: Transaction volume will go from $450,000/month to $1,200,000/month KR3: Recommendation rate (NPS) will go from 28 to 55 KR4: Creatives with 5+ completed projects will go from 230 to 800

How to define good KPIs?

SMART criteria

A good KPI must be:

Specific:

• Measures one precise thing
• No ambiguity about what's measured

Measurable:

• Quantifiable with a number
• Easily calculable

Achievable:

• Realistic given resources
• Under team's control

Relevant:

• Aligned with business objectives
• Important for decision-making

Time-bound:

• Defined measurement frequency
• Allows tracking evolution over time

Questions to ask

1. Does this KPI help make decisions? If the answer is no, it may not be a good KPI.

2. What happens if this KPI degrades? Define alert thresholds and associated actions.

3. Who is responsible for this KPI? Each KPI must have a clearly identified owner.

4. What's the ideal measurement frequency? Neither too frequent (noise), nor too rare (late reaction).

KPI sheet template

KPI name: [Explicit name] Description: [What exactly this KPI measures] Calculation formula: [How to calculate it] Data source: [Where to find the data] Measurement frequency: [Daily / Weekly / Monthly] Owner: [KPI responsible] Target objective: [Aimed value] Alert threshold: [Value below which to alert] Action if alert: [What to do if threshold crossed]

Applied example:

KPI name: Team velocity Description: Average story points completed per sprint Calculation formula: Sum of story points of "Done" stories / Number of sprints Data source: Jira (agile board) Measurement frequency: End of each sprint (every 2 weeks) Owner: Scrum Master Target objective: 50 points per sprint Alert threshold: < 40 points per sprint Action if alert: Dedicated retrospective to identify blockers

Tools for managing OKRs and KPIs

Dedicated OKR tools

Perdoo:

• Simple and clear interface
• Visual OKR alignment
• Easy check-in

Gtmhub (Quantive):

• OKR + Advanced analytics
• Numerous integrations
• Suited for large organizations

Weekdone:

• OKR + PPP (Plans, Progress, Problems)
• Simple and affordable
• Good for SMEs

Ally.io (Microsoft):

• Enterprise-grade OKR
• Microsoft ecosystem integration
• Advanced reporting

General tools

Notion:

• Flexible and customizable
• OKR templates available
• Real-time collaboration

Asana:

• Goals + Projects
• Good visualization
• Numerous integrations

Monday.com:

• Customizable dashboards
• KPI and OKR tracking possible
• Workflow automation

Google Sheets:

• Free and accessible
• Total control
• OKR templates available

KPI / Business Intelligence tools

Tableau:

• Powerful visualizations
• Interactive dashboards
• Connection to multiple sources

Power BI (Microsoft):

• Microsoft ecosystem integration
• Real-time dashboards
• Good value for money

Databox:

• KPI dashboards
• Mobile-friendly
• Marketing/sales integrations

Klipfolio:

• KPI dashboards
• Automatic alerts
• Affordable price

Common mistakes to avoid

With OKRs

1. Confusing OKRs with tasks

Mistake:

• Objective: Migrate to React 18

Correction:

• Objective: Offer an ultra-smooth and performant user experience
• KR1: Reduce loading time from 3s to 1s
• KR2: Achieve Lighthouse score of 95+
• (React 18 migration is a means, not the objective)

2. Too many Key Results

Mistake:

• 8 Key Results for a single Objective

Correction:

• 3 to 5 Key Results maximum
• Focus on essentials

3. Non-measurable Key Results

Mistake:

• KR: Improve code quality

Correction:

• KR: Reach 90% test coverage (currently 65%)

4. Never adjusting

Mistake:

• Keep an OKR that became irrelevant during the quarter

Correction:

• Regularly reevaluate
• Adjust Key Results if context changes significantly

With KPIs

1. Too many KPIs

Mistake:

• Dashboard with 45 KPIs

Correction:

• 5 to 10 KPIs maximum
• Focus on what really matters

2. Vanity metrics

Mistake:

• Measure unique visitors without looking at conversion

Correction:

• Measure actionable metrics
• Link to behaviors that create value

3. KPI without owner

Mistake:

• KPI tracked by "the team" without clear owner

Correction:

• Each KPI has a named owner
• This person is responsible for the metric

4. No alert thresholds

Mistake:

• KPI that slowly degrades without action

Correction:

• Define thresholds
• Automatic actions if crossed

Checklist: Are you ready?

For your OKRs:

• [ ] Do you have 3 to 5 Objectives maximum?
• [ ] Are your Objectives inspiring and qualitative?
• [ ] Does each Objective have 2 to 5 Key Results?
• [ ] Is each Key Result measurable with a number?
• [ ] Have you indicated current value and target for each KR?
• [ ] Are your OKRs ambitious (70% = success)?
• [ ] Are they aligned with overall strategy?
• [ ] Have you scheduled regular check-ins?

For your KPIs:

• [ ] Have you limited the number of KPIs (5-10 max)?
• [ ] Is each KPI SMART?
• [ ] Does each KPI have a clearly designated owner?
• [ ] Have you defined measurement frequency?
• [ ] Are alert thresholds defined?
• [ ] Are actions in case of alert defined?
• [ ] Are your KPIs accessible in real-time (dashboard)?
• [ ] Have you automated data collection?

Conclusion

OKRs and KPIs are not competitors, they're complementary allies in managing your projects. KPIs ensure your daily activity remains healthy and performing, while OKRs push you toward ambitious and transformative goals.

The key to success:

• Use KPIs to monitor and maintain your fundamentals
• Use OKRs to transform and innovate
• Keep both simple, focused, and actionable
• Review regularly and adjust if necessary

Start small: define 5 essential KPIs for your project, then add one ambitious OKR for the next quarter. Iterate and improve over time. Data-driven management is a journey, not a destination!