Are OKRs replacing KPIs?

In today’s fast-paced business world, companies are always looking for ways to stay competitive and enhance performance. KPIs (Key Performance Indicators) and OKRs (Objectives and Key Results) have long been go-to tools for tracking progress and driving results. However, with more organisations embracing OKRs, a new question is gaining traction: Can OKRs replace KPIs?

Let’s break it down.

What are OKRs and KPIs?

OKRs (Objectives and Key Results) are a goal-setting framework made popular by former Intel CEO Andy Grove in the 1970s. They help organisations set ambitious goals and measurable results to drive performance across teams. At their core, OKRs answer two questions: “What do we want to achieve?” and “How will we know we’re getting there?”

The beauty of OKRs lies in their flexibility. They’re meant to stretch teams, foster alignment, and inspire innovation, all while staying measurable and trackable.

KPIs, on the other hand, are metrics used to gauge performance against specific, often operational, goals. Whether it’s monthly sales, churn rates, or customer satisfaction scores, KPIs help leaders understand if their business is moving in the right direction.

Both frameworks are valuable but now, many leaders are asking: Can OKRs replace KPIs, or is there a better way to use them together?

Advantages of OKRs vs. KPIs

The OKR Software framework is beneficial for businesses as it enables organizations to set dynamic, measurable objectives and track progress in real-time. By setting a timeline and figure for each result, employees have a better understanding of what success looks like for each task or project. 

Additionally, OKRs are easier to analyze than KPIs as they provide a snapshot of the entire organization’s progress at once, which makes it easier to identify which goals have been met and which need further work.

OKRs provide a more comprehensive view of an organization’s performance than KPIs, as they measure progress against both short-term and long-term goals. 

This allows organizations to adjust their strategies and objectives to ensure they always work towards their desired outcomes. Furthermore, OKRs are more flexible as they can be adjusted to fit the changing needs of the organization.

Can OKRs Replace KPIs Entirely?

Let’s tackle the big question head-on: Can OKRs replace KPIs entirely? In most cases, probably not. And here’s why.

OKRs and KPIs serve different, complementary purposes. OKRs are all about where you want to go, while KPIs tell you how you’re doing along the way. OKRs provide strategic direction, while KPIs provide the dashboard metrics.

However, if your organisation is over-reliant on KPIs and feeling stagnant, switching to OKRs might spark innovation and growth. In such scenarios, OKRs can supplement or even partially replace KPIs but the key is integration, not replacement.

The Differences Between OKRs and KPIs

When we ask, Can OKRs replace KPIs, it helps to understand their core differences:

How to Use OKRs and KPIs Together

Instead of choosing between the two, consider how OKRs and KPIs can work hand in hand. Even if OKRs can replace KPIs in some contexts, integrating both ensures you’re not missing key performance metrics while pursuing strategic goals.

Here’s how to make it work:

1. Start with High-Level OKRs

Define your big-picture goals. These should be ambitious, aligned with your company’s mission, and focused on outcomes that truly matter.

2. Add Measurable Key Results

Each OKR should be accompanied by 2–5 key results that help you measure progress. Make them specific, time-bound, and tied to your objective.

3. Use KPIs to Support Key Results

Here’s where the magic happens. Choose KPIs that provide supporting data for your OKRs. If your OKR is to “improve user experience,” your KPI might be “reduce app crashes by 20%.”

This way, you’re not asking, can OKRs replace KPIs, but rather, how can KPIs enhance your OKRs?

4. Monitor and Adjust Regularly

OKRs thrive on agility. Review them regularly, adjust as needed, and ensure they align with evolving business priorities. At the same time, keep an eye on KPI trends to inform your strategic shifts.

Example: OKRs vs KPIs in a Sales Team

Company: Hypothetical SaaS Company – “Softwave”

Scenario:

The sales team at Softwave traditionally used KPIs like:

• Monthly revenue target: $500,000
• Number of calls per rep: 50 per day
• Conversion rate: 25%

These KPIs measured outputs, but didn’t show if the team was adapting or innovating to grow sustainably.

 Old KPI-Only Approach:

• Reps hit their call targets but weren’t improving pitch quality.
• Conversion rates stagnated.
• No one knew why performance varied quarter to quarter.

Shift to OKRs:

Objective: Improve the effectiveness of our outbound sales motion.

Key Results:

1. Increase the conversion rate from cold calls from 25% to 35%
2. Test and validate three new outbound sequences
3. Train all SDRs on objection-handling techniques and certify by the end of Q1.

Insight:

With OKRs, the team focused not just on hitting numbers, but on the levers that drive sustainable performance. KPIs still tracked outcomes like revenue and call volume, but OKRs gave them strategic direction.

 Result:

• Higher engagement from the team
• Improved win rates over two quarters
• Better alignment between Sales and Product teams through shared OKRs on messaging

Final Thoughts: Should You Replace KPIs with OKRs?

So, can OKRs replace KPIs? The short answer is: not entirely. But they can replace the overuse of KPIs and shift your focus from simply measuring activity to driving meaningful outcomes.

The most successful organisations aren’t choosing between OKRs and KPIs. They’re combining them. OKRs provide the “why” and “what,” while KPIs deliver the “how.” Used together, they offer a robust performance management system that strikes a balance between ambition and accountability.

To understand how your business can reap the benefits of both OKRs and KPIs, book a consultation call with the experts today!