I got asked again last week: “What’s the difference between KPIs and OKRs?”
The person asking was a PM at a mid-sized company. Smart guy. Been in product for five years. His company had just rolled out OKRs and he was staring at a template, genuinely confused about what to write. Here’s what he’d drafted as his objective: “Be a high-performing team.”
This is the problem in miniature. Not just for him, but for most people encountering OKRs for the first time. They treat OKRs like slightly fancier KPIs, or they make them so vague they could mean anything, or they confuse aspirational states with actual strategic objectives. The result is a lot of effort creating documents nobody reads and goals nobody achieves.
So let’s clear this up.
KPIs measure what you’re already doing
Key Performance Indicators are your dashboard. They tell you if the engine’s overheating, if you have enough fuel, if you’re maintaining speed. Customer satisfaction score. Monthly active users. Time to close a ticket. Revenue per customer. These metrics matter enormously. You watch them, you optimize them, you nudge them gently upward over time.
KPIs are for steady-state operations. They answer the question: “How are we doing at the thing we do?” And for many teams, that’s exactly the right question to be asking. Your accounting team should have KPIs—close the books in X days, maintain Y error rate. Your legal team should have KPIs—contract turnaround time, compliance audit scores. These teams don’t need to revolutionize their function every quarter. They need to be consistently excellent at what they do. Getting a little better each year is not just acceptable, it’s the entire point. That’s not insulting to these teams. It’s appropriate to their role in the organization.
OKRs are for change
Objectives and Key Results aren’t about maintaining anything. They’re about transformation. An OKR says: “We are here. We need to be there. This quarter, we’re going to make that leap.”
OKRs are your GPS when you’re driving somewhere you’ve never been. They’re directional, they’re ambitious, and they have an expiration date because once you arrive at your destination, you need to pick a new one. You don’t use the same OKR forever because the whole point is that you’re trying to change something specific about your current reality.
Product teams need OKRs because product is fundamentally about change. You’re launching new features. Revamping experiences that aren’t working. Entering new markets. Trying to 10x a metric that’s currently stuck or declining. You’re not asking “how do we do this thing 5% better?” You’re asking “what would it take to completely solve this problem?” or “what would it look like if we captured this opportunity?” Those are different questions that require different tools.
Why “Be a high-performing team” fails as an OKR
Go back to that PM’s draft objective: “Be a high-performing team.” Let me count the ways this doesn’t work.
First, it’s too vague to drive action. What does high-performing even mean in this context? Shipping faster? Better collaboration? Fewer bugs? Lower attrition? Higher innovation? All of the above? When everything’s a priority, nothing is. Teams need to know what specific thing they’re trying to change, not what virtuous state they’re trying to embody.
Second, it’s not measurable in any meaningful way. What are your key results going to be? “Team happiness score above 4.0”? “Ship 100% of committed features”? These might be perfectly fine KPIs to track over time, but they don’t tell you what’s changing this quarter. They don’t point to a destination.
Third—and this is the real issue—being a high-performing team isn’t a destination you arrive at. It’s baseline. It’s what you should be doing all the time, every quarter, whether you have OKRs or not. It’s like saying your objective is “Be a professional” or “Do good work.” Yes, obviously. But what are you actually trying to accomplish?
An objective needs to answer a very specific question: What change do I want to see this quarter?
Not “what should we always be good at?” Not “what virtues should we embody?”
What. Must. Change.
What good OKRs actually look like
A product team launching a new feature might write:
- Objective: Make [new feature] the primary way users accomplish [core task]
- Key Results: 60% of active users try the feature in first month; 40% become regular users (weekly); NPS for feature above 50
A product team revamping an existing experience might write:
- Objective: Transform checkout from a conversion killer into a competitive advantage
- Key Results: Reduce cart abandonment from 70% to 50%; increase mobile conversion rate by 30%; decrease support tickets related to checkout by 40%
See the difference? These aren’t about “being good” at something in the abstract. They’re about making something specific and different happen in the world. They’re about going from one state to another state. The objective tells you where you’re going. The key results tell you how you’ll know when you’ve arrived.
When you don’t need OKRs at all
Here’s something people don’t say often enough: not every team needs OKRs every quarter. Not every team needs to be transforming something all the time.
If your accounting team is humming along, closing the books on time, maintaining clean records, staying compliant—they don’t need an OKR. They need KPIs and maybe one or two annual improvement goals. If your support team is hitting their response times and satisfaction scores and customers are happy—great. Keep doing that. Watch those KPIs and celebrate when they improve.
OKRs are for when you need a team to focus on making a significant change. When you need to transform something that isn’t working, capture a new opportunity, or make a strategic bet. When you need to shift from state A to state B and that shift requires focus, coordination, and ambition.
If there’s no change needed, there’s no OKR needed. Don’t force it. The tool exists to solve a problem, not to make your organization look like Google.
The question that fixes everything
When someone shows you a draft objective like “Be a high-performing team” or “Deliver excellent customer service” or “Build a great product,” there’s one question that cuts through all the vagueness:
“What change do you want to see this quarter?”
Not what you should keep doing well. Not what you’d like to be good at forever. What specific change are you trying to create in the next 90 days?
That single question forces clarity. It forces strategy. It forces people to think about the gap between where they are and where they need to be, and what it would take to close that gap.
Maybe the real change is “Reduce our time-to-value for new customers from 30 days to 7 days.” Maybe it’s “Make our product accessible enough that non-technical users can accomplish [key task] without help.” Maybe it’s “Shift revenue mix from 80% enterprise/20% SMB to 60/40 to reduce customer concentration risk.”
Those are changes. Those are transformations. Those can drive meaningful OKRs that a team can rally around.
“Be high-performing” is not a change. It’s a state you should always be working toward, which makes it a terrible objective because it never ends and never provides direction.
Use the right tool for the job
KPIs keep the ship running smoothly. Watch them, optimize them, celebrate incremental improvements. They tell you if what you’re doing is working.
OKRs point the ship somewhere new. Use them when you need to make a leap, solve a hard problem, or seize an opportunity that requires focus and transformation. They tell you where you’re trying to go.
Most teams need both. Very few teams need to revolutionize everything every quarter. Know which tool you need for which job, and then use it properly. Write KPIs that you can track over time. Write OKRs that describe a specific change you’re trying to create.
And for the love of all that is holy, don’t write an objective that’s just a virtuous aspiration. Ask yourself what change you’re trying to make. Then write that down clearly enough that everyone on your team knows exactly where you’re headed.