OKRs vs KPIs: When to Use Goals vs Metrics

Overview

OKRs and KPIs answer different questions. KPIs (Key Performance Indicators) answer: "Is the business healthy right now?" OKRs (Objectives and Key Results) answer: "What specific change are we driving this quarter?"

The confusion between them causes real problems. Teams that treat KPIs as OKRs end up "setting a goal" to maintain the status quo. Teams that ignore KPIs in favor of OKRs lose sight of operational health while chasing new outcomes.

This guide breaks down when each works best. And how to use them together.

Quick Comparison

OKRs. Deep Dive

OKRs were formalized by Andy Grove at Intel and popularized by John Doerr at Google. The structure is simple: an Objective (qualitative, inspiring) paired with 3-5 Key Results (quantitative, measurable).

Example:

• Objective: Make onboarding so good that users don't need support
• KR1: Reduce support tickets from new users by 40%
• KR2: Increase onboarding completion rate from 60% to 80%
• KR3: Achieve Day-7 retention of 50% for new cohorts

Strengths

• Forces focus. You can only have 3-5 Objectives, which means saying no to everything else
• Aligns teams. Company OKRs cascade to team OKRs, creating a clear line from strategy to execution
• Encourages ambition. The 70% target norm means teams stretch beyond comfortable goals
• Separates outcomes from outputs. Key Results measure what changed, not what shipped

Weaknesses

• Quarterly cadence can feel forced. Some meaningful outcomes take 6-12 months
• Easy to game. Teams set sandbagged Key Results they know they'll hit
• Requires discipline. Poorly written OKRs become task lists disguised as goals
• Overhead. Writing, aligning, scoring, and reviewing OKRs takes real time each quarter

When to Use OKRs

• You need to align multiple teams around shared outcomes
• You want to shift behavior rather than maintain current performance
• Your product strategy requires focused bets this quarter
• You're trying to break out of a local optimum (e.g., growth has plateaued)

For a step-by-step guide to setting OKRs, see the full OKR guide. For a ready-to-use template, try the OKR template.

KPIs. Deep Dive

KPIs are the vital signs of your product. They tell you whether the system is healthy without requiring a new goal every quarter. Good KPIs are stable. You track the same ones for years.

Example KPIs for a SaaS product:

• Monthly Recurring Revenue (MRR)
• Customer churn rate
• Net Promoter Score (NPS)
• DAU/MAU ratio
• P95 API response time

Strengths

• Always relevant. KPIs don't expire at the end of a quarter
• Easy to understand. A single number with a clear threshold
• Early warning system. A KPI moving in the wrong direction triggers investigation before it becomes a crisis
• No setup overhead. Once defined, KPIs run on dashboards without quarterly ceremonies

Weaknesses

• Don't drive change. Tracking churn doesn't reduce churn
• Can become vanity metrics. Teams track numbers that look good but don't matter
• Lagging indicators. Many KPIs (revenue, churn) reflect decisions made months ago
• No prioritization signal. Knowing 8 KPIs are "green" doesn't tell you what to work on next

When to Use KPIs

• You need to monitor ongoing health of a mature product
• You want executive dashboards that summarize performance at a glance
• You're tracking metrics tied to your North Star
• You need alerting thresholds that trigger action when something breaks

Decision Matrix: Which Approach to Choose

Choose OKRs when:

• You need to drive a specific change over the next quarter
• Multiple teams need to coordinate toward a shared outcome
• Leadership wants to communicate strategic priorities clearly
• Your product is in a growth or turnaround phase where the status quo isn't acceptable

Choose KPIs when:

• You need to monitor business health on an ongoing basis
• You want automated alerting when metrics cross thresholds
• Your product is mature and stable. The priority is protecting what works
• You need a common language for cross-functional performance reviews

Use both when:

• You want KPIs as the baseline health check and OKRs as the quarterly improvement lever
• One of your OKRs targets improving a specific KPI that has been underperforming
• You need to ensure teams don't break existing KPIs while chasing new OKR targets

How They Work Together

The most effective teams run both systems in parallel:

1. KPIs as guardrails. Define 5-8 KPIs that must stay within acceptable ranges. If churn spikes, that takes priority over any OKR.

1. OKRs as focused bets. Pick 2-3 areas where you want to drive meaningful change this quarter. These often target a KPI you want to improve. But the OKR adds the ambition and the plan.

1. Review cadence. Check KPIs weekly. Review OKR progress bi-weekly. Score OKRs at end of quarter.

Example of the interplay:

• KPI (always tracked): Customer churn rate. Target: below 5% monthly
• OKR (Q2 focus): Reduce churn among mid-market accounts from 7% to 4% by improving the first 30-day experience

The KPI tells you there's a problem. The OKR focuses the team on solving it.

Common Anti-Patterns

"Our OKR is to maintain 99.9% uptime." That's a KPI, not an OKR. If you're already at 99.9%, there's no change to drive. Track it as a KPI.

"We track 30 KPIs." If you track everything, you're monitoring nothing. Ruthlessly cut to the 5-8 that would actually change your behavior if they moved.

"We set OKRs but never score them." The learning happens in the scoring conversation. If you skip it, OKRs become decoration.

"Our Key Results are all tasks." "Launch feature X" is an output, not an outcome. Rewrite it as the measurable change you expect the feature to produce.

Bottom Line

KPIs are the dashboard. OKRs are the steering wheel. You need both, and they serve different purposes. KPIs tell you where you are. OKRs tell you where you're going this quarter. And whether you got there.

The mistake isn't choosing one over the other. It's confusing them. Keep your KPIs stable and your OKRs ambitious, and you'll have both operational clarity and strategic focus.