KPIs and OKRs: The Speedometer and the GPS

Most companies conflate KPIs and OKRs. They use them interchangeably, or worse, try to replace one with the other.

This is a category error. KPIs and OKRs are different instruments that answer different questions. You need both, and you need to understand what each one does.

The clearest mental model: KPIs are your speedometer. OKRs are your GPS.

The speedometer: what KPIs do

A speedometer tells you one thing: how fast you're going right now.

It doesn't tell you where to go. It doesn't judge your destination. It just gives you real-time feedback on a single dimension of your current state.

KPIs work the same way:

• Monthly Recurring Revenue (MRR)
• Activation rate
• Customer churn
• Deployment frequency
• Net Promoter Score

These are vital signs. You glance at them continuously to see whether you should act: slow down, speed up, or maintain.

The GPS: what OKRs do

A GPS tells you where you're going and whether you're on track to get there.

It sets a destination (the objective) and shows a route (the key results). It tells you if you've drifted off course. It might even recalculate when conditions change.

OKRs work the same way:

• Objective: Become the default choice for SMB software teams
• Key Result: Increase sign-ups from 500 → 1,500/month
• Key Result: Achieve 60% activation rate for new users

These are directional. They express ambition and create alignment.

Why you need both

Each instrument has a blindspot that the other covers.

Healthy KPIs + off-track OKRs = The machine works, but it's pointed wrong. You're efficiently going nowhere.

On-track OKRs + unhealthy KPIs = You're reaching goals at an unsustainable cost. The engine is overheating.

KPIs alone lead you astray

You could be driving 80km/hr toward a cliff. The speedometer just tells you you're going 80.

Similarly, healthy KPIs don't mean you're building the right business. You could have great sign-ups, activation, and retention, for the wrong customer segment. The dashboard is green, but you're building the business the market gave you by default, not the one you intended.

A KPI-only approach is also reactive. You're saying, "We'll keep doing whatever makes these numbers healthy." That works until the market shifts, and by then you've lost months.

And eventually, KPIs hit a ceiling. There's only so far you can push "more revenue" or "better retention" within your current model. To break through, new markets, new products, repositioning, you often need to accept short-term KPI declines for long-term growth. If you're only watching KPIs, those strategic moves look like failures.

KPIs alone create blind spots

When all metrics are green, KPIs give you no signal for where to invest next. They're neutral. You need something that says: "Even though everything is stable, this is what we're pushing on this quarter."

And since no dashboard covers everything, teams over-optimize what's measured at the expense of what isn't. Measure sign-ups, get more sign-ups, maybe at the expense of lead quality. Measure velocity, get faster shipping, maybe at the expense of stability.

OKRs force you to name your strategic assumptions explicitly and revisit them each cycle. KPIs alone let the strategy hide inside the dashboard, unexamined.

Using them together

Different cadences

KPIs should be glanceable at any moment: dashboard visible to leadership, thresholds that trigger alerts, reviewed briefly in weekly meetings. They're facts. When they move, you notice. When they cross a threshold, you act.

OKRs operate on a longer rhythm: set at the beginning of a cycle (usually quarterly), reviewed weekly for progress and confidence, graded at cycle end. They're commitments that drive prioritization.

The integration point

The magic happens when you connect them:

• Some key results should be KPIs with targets attached ("Increase MRR to $500k")
• KPI movements should inform OKR confidence ("Churn spiked, our retention KR is now at risk")
• Both should be visible in the same system

They're not the same thing, but they're deeply connected.

The operating rhythm

Daily/Weekly: Glance at KPIs. Are we in normal range?

Weekly: Review OKR progress and confidence. What's off-track?

Monthly: Look at KPI trends. What patterns are emerging?

Quarterly: Reassess OKRs. Are we pointed the right direction?

Common mistakes

Treating all metrics as OKRs. Not every metric needs to be improved. Some just need to be maintained. Making "maintain 99.9% uptime" an OKR adds noise. That's a KPI, watch it, don't goal it.

Having OKRs without KPIs. Some companies set ambitious goals without monitoring operational health. This leads to blind spots and surprises.

Too many of either. If you have 15 KPIs and 12 OKRs, you have no focus. The power of both instruments comes from constraint: 5-7 KPIs that capture system health, 2-3 objectives per team that capture direction.

The principle

Don't confuse them. Don't replace one with the other. Use them together, and you'll have the clarity to make good decisions.