OKRs provide the missing link between ambition and reality. They help you break out of the status quo and take you into new, often unknown, territory. If you have a big dream—an inspiring ultimate goal for your company, you need OKRs that take you there.
A KPI, on the other hand, measures the success, the output, quantity, or quality of an ongoing process or activity. They measure processes or activities already in place.
Very often, a KPI that needs improvement will be a starting point for creating an OKR, and it will become a Key Result of an Objective. Accordingly, an OKR vs. KPI comparison is a bit like comparing a fruit salad with an orange, they both contain fruit, but one is a combination that contains the other.
OKRs and KPIs
So how are they different?
Well, some companies make the mistake of believing that they can use OKR to replace KPI, but that doesn't make any sense. And to illustrate this,let's take an example of a car.
If you're driving your car and the car is, let's say, your organization and you're heading to your desired destination and that destination is your ultimate vision, then OKRs would be the tool that you'd use to map out your optimal path to their destination. But as you drive that car, you also need to keep an eye on your dashboard to make sure that the engine doesn't overheat and that you don't run out of gas. And these things that you have in your dashboard that you have to constantly watch are best measured using KPIs.
You need to monitor them on an ongoing basis to make sure that they stay within predefined thresholds. So the use case for OKR is to serve as a map to take you to your desired destination.
So to summarize,OKR is the evolution of KPI or we can also say OKR is the updated version of KPI.