Translated from Português (Brazil) • View original Há a lot of confusion about the meaning of these terms. Take your dúvidas KPI (Key Performance Indicator), the famous Key Performance Indicators or OKR (Objectives and Key Results), are three-letter acronyms used by countless organizations on the planet. However, for a management focused on the innovation with so many attributes impacting the matrix market reasoning in which we are inserted, it is necessary for people to question the difference between OKR x KPIs. The challenge is that "KPI" can mean different things to different people, which makes this discussion somewhat timely. Throughout my 22 years of marketing experience doing innovation management in industry and retail, I have tried countless different ways to reflect on this topic and finally found one that seems to resonate with the demands of the modern world. The first issue regarding this subject that you need to understand is that OKR is a system that forces you to separate what really matters from the rest and to set clear priorities. To do this, you need to learn to say "no". Because if everything is a priority, in reality, nothing will be. This approach is a significant departure from the way many organizations track results. Companies often have a monthly meeting where employees consult KPIs page after page, in a mind-numbing exercise that can last for hours. There is so much going on that employees lose sight of what is important. But what happens in reality is that they are drowning in a sea of conflicting metrics and priorities. In this sense, we need to be clear that we cannot forget the definition of the "K". The letter "K" in KPI and OKR stands for "key". They must be few, the most important. The use of KPIs should force companies to separate what really matters (the key indicators) from the other factors, but many people forget that. If you have 30 "KPIs," you don't really have any — just indicators. That's why in OKRs we limit the number of Key Results. A project should have only one goal in a given period of time, with ideally up to five Key Results. On the other hand, it's also important to make it clear that OKRs aren't about tracking everything you do. Otherwise, company OKRs would have to include key results to keep the lights on, clean the office, etc. An excellent way to understand the difference between your OKRs and everyday work is to think about the goals you have in your personal life: you can save money for a trip, spend more time with your family, or lose weight. I bet buying groceries isn't one of your goals, but you still need to do them. What if your trips to the grocery store start to take up so much time that they start to detract from your personal goals? Then you'll need to change the way you perform them. When people say they can't achieve OKRs because their daily work gets in the way, it's because they don't understand. Good OKRs force you to reevaluate low-priority or non-value-added activities, as well as reduce, automate, or outsource them so you can focus on what really matters. OKR is about creating sustainable change with a focus on effective performance. This means that simply using a system to produce a temporary improvement isn't enough. OKRs focus on changing behaviors, systems, tools, or processes so that you can develop new and better levels of performance. The question regarding OKR reviews is, "If all areas of our company continue at their current level of performance, which areas will the changes have the most impact?" To set relevant OKRs, you must evaluate the different aspects of your business and identify the ones where a change in performance would have the greatest impact. What happens when a metric/KPI that is not in your OKRs starts to deviate from the previous trend? Then you need to act on that and you may even need to include it in OKRs to ensure that it goes back to where it should be. And if something is unstable, you can create an OKR to go back to the "steady state". To understand how to do this in practice, let's take a trip. Imagine that you want to take a trip. The first thing you need to decide is where you want to go, so use a travel guide and choose to travel by car from São Paulo to Rio de Janeiro. Once you decide where you want to go, get in the car and enter the destination into your GPS, which will help you track if you are on the right track. Finally, while you drive to your chosen destination, your car also has a dashboard that tracks many other metrics and tells you, for example, how much fuel you have. As long as the dials on the dashboard are within certain limits, you don't care about them. What matters is getting to where you want to be. But if your dashboard shows that you're running out of fuel, you'll need to adjust the course and find a gas station. This analogy is a great way to understand the difference between strategy, OKRs, and KPI monitoring. Strategy: It's the process of deciding your destination. This helps you decide where you want to go. OKR: It's your GPS, i.e., your car's navigation system. It will help you track if you're on the right track and, if necessary, correct the course. And just like a GPS, OKR doesn't help you decide the destination, nor formulate your strategy. KPIs: These are the dials on your car's dashboard. They tell you if everything is correct. Ultimately, success is only proven when behaviors change, and you no longer need to include that topic in your OKRs. All you need is basic business rigor to make sure nothing is slipping down. But the most important thing is when everyone in the organization understands why OKRs. Source: Época Negócios