OKR vs KPI:

How to Supercharge Your Objectives, Key Results, and Wildly Important Goals

Mark Josie, Senior vice president of strategy execution and sales performance, FranklinCovey
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All leaders know that results require both strategy and execution. Unfortunately, we overvalue strategy and underestimate the challenges of execution.

— Sean Covey

Our research shows that organizations spend more than $30 billion each year on strategic execution. However, tens of billions of dollars are lost each year because 80% to 90% of organizations fail to successfully execute their strategies. The kicker? A simple, proven formula for strategic execution could have prevented those losses. 

To execute a strategy effectively, organizations need to get crystal clear on which goals matter most and what needs to happen to achieve them. Many leaders identify and reference performance metrics and key objectives for this very purpose. But how much do you really know about OKR vs KPI? And are these even the be-all, end-all metrics to focus on for strategic success?  

We’d argue that if your organization is using only OKR KPI language to refer to and track goals, you’re missing out on crucial components of strategic execution—and that can completely derail your progress and ability to compete in today’s marketplace. That said, these metrics are far from useless; they’re simply one piece of the puzzle.  

With that, let’s take a closer look at OKR vs KPI, as well as even more effective ways to measure and execute your strategic success. 

 

Understanding OKRs, KPIs, and Wildly Important Goals 

Every organization identifies goals and tracks performance metrics in some way. These goals provide vision as to where the organization wants to go, while metrics let you know whether you’re on the right track to achieving those aspirations. Some organizations will package these concepts differently or will use a combination of these terms as part of their strategic planning.  

Most leaders have a whole slew of objectives and performance indicators they reference at different times and for different initiatives. But most commonly, these are expressed as “OKRs” and “KPIs.” These terms are not interchangeable, but they’re typically meant to complement each other in pursuit of a shared vision. 

 

What is an OKR? 

“OKR” stands for “Objectives and Key Results.” OKRs first came into play during the 1970s, when Intel’s Andy Grove put his spin on Peter Drucker’s “management by objectives” (MBO) concept. Grove placed the emphasis on outcomes, rather than on procedures to follow, and embraced a system that didn’t hinge on conventional, hierarchal team structures. Once John Doerr, a protegee of Grove’s, introduced the concept to Google’s founders in the late ‘90s, OKRs really started to take off.  

OKRs are expressed in two related parts. Objectives speak to the larger vision of the organization—its mission, direction, and big-picture goals. This aspect of the OKR is often aspirational, representing a powerful concept for the business. Objectives may include a number (like a large sales target or a long-term timeline), but those numbers capture the “what” and not the “how.” Then, there’s the key results piece, which outlines the ways in which the success of that objective will be achieved—the “how.” These should always contain tangible targets—measurable numbers to hit or a deadline to meet. 

Simply put, an OKR is an outline for setting goals and determining the larger steps that need to be taken to achieve those goals. OKRs can be used to connect the work that teams do every day to the objectives leaders set at the company level.  

Here’s how an OKR might look in practice. 

Objective: Improve our company culture and reduce voluntary turnover by 50%. 

Key Results: 

  • Maintain quarterly employee satisfaction score averages of 8 or higher. 
  • Standardize 1-on-1 meeting procedures and cadence to prioritize engagement via a weekly, two-way feedback loop. 

As you can see from the example above, the key results roll up to the objective. In theory, achieving those key results will then allow the objective to also be achieved. However, there’s room for error; in the example above, achieving those key results doesn’t automatically mean the objective is achieved, too. If there are other contributing factors that aren’t being addressed in the key results—if leaders and teams aren’t focused on the right activities—the objective can still fail to be met.  

That doesn’t mean you can’t or shouldn’t use OKRs in your organization. It simply means that they aren’t the only framework you need for successful strategic execution. 

 

What is a KPI? 

“KPI” stands for “Key Performance Indicator.” KPIs have a more extensive history than OKRs, but they’ve been retooled over the centuries to suit emerging needs. Experts purport that the use of KPIs can be traced back to China’s Wei Dynasty, where a very early form of performance indicators were used to measure the performance of its rulers. Skipping ahead to the early part of the 20th century, high-level performance measures were introduced within certain companies—though, as with OKRs, KPIs didn’t really start to gain traction until the later part of the century. In the early 1990s, Kaplan and Norton’s The Balanced Scorecard revolutionized KPIs and subsequently helped link them to broader objectives. 

As their name suggests, KPIs are metrics that track progress in specific areas of focus. While teams can monitor their KPIs on a regular basis to assess more general progress, individual projects or campaigns can also have their own KPIs. In many cases, a given KPI is measured against itself; for example, you might compare KPI performance year-over-year or quarter-to-quarter. KPIs may also be unique to a certain teams or departments. 

Say we’re looking at the fictitious company that wanted to improve its culture and reduce its voluntary turnover. In some organizations, that goal might not be company-wide or might be divided among certain teams; for instance, the HR department might assume all responsibility for the goal and be measured on the success of achieving KPIs like: 

  • Reduce absenteeism rate per quarter. 
  • Improve quarterly employee satisfaction scores. 
  • Decrease yearly employee turnover rate or increase employee retention rate. 
  • Improve employee productivity (hours worked vs. work produced). 
  • Increase training and L&D effectiveness/engagement. 
  • Reduce overtime hours worked. 

In contrast, larger company KPIs commonly include things like financial metrics around revenue growth or cost reduction, customer satisfaction and retention, or operational and productivity metric. These metrics can also be deconstructed down to individual departments, divisions, regions, and teams.  

To be most effective, KPIs need to be tied to a greater goal (like an OKR or other initiatives) and tailored to the organization’s needs. In other words, specific KPIs can be selected as a means of measuring relative success, but due to how siloed they can be, they may not be a strong indicator of whether the business’s greater goals are being met. In the example above, the HR department may be deemed solely responsible for achieving this cultural goal. Realistically, there are likely other factors at play that aren’t captured by this data and can’t be effectively addressed by human resources personnel alone.  

There’s nothing inherently wrong with having a department-wide goal, of course. But when KPIs are used at the higher organizational level, they’re not always clear to or achievable by everyone—and that lack of clarity and ownership trickles down to other teams, making it much more difficult to understand and achieve the larger aims of the business.   

 

OKR vs KPI: What’s the Difference and Do You Need Both? 

Some folks mistakenly conflate OKRs and KPIs, but they’re designed to address different parts of your strategy. OKRs are often highly ambitious goals that communicate where the organization wants to go next, as well as some big-picture steps to get there. In contrast, KPIs don’t have an inherent connection to larger goals; rather, they’re quantitative measures that signal the progress being made in certain areas of the business. 

OKRs and KPIs can and do often work together. They’re not meant to replace one another, but depending on the application, one can be a more appropriate choice over the other. An organization might create or adjust an OKR if they’re looking to change direction, while KPIs may come into play if your team is scaling, making changes to an already existing project, or looking to compare progress in a specific area over time. In most cases, businesses will use a combination of OKR KPI references in their plans for execution. 

That being said, OKRs and KPIs don’t tell the whole story. Even when both are used together, that’s often not enough for an organization to be among the 10%-20% that execute their strategies successfully—which is why we also need to focus on the wildly important. 

 

The Wildly Important Goal®: A Game-Changer for Your Organization 

A Wildly Important Goal (WIG®) isn’t just any goal; it’s one that makes all the difference. It’s your strategic tipping point—an objective so critical that you’re willing to apply a disproportionate amount of energy to achieving it. A WIG is a single breakthrough result that meets the following criteria: 

  1. It has enormous strategic impact with a big gap. This isn’t merely an important metric to track. Rather, it’s a metric that’s stuck, stubborn, or moving in the wrong direction. It represents a critical gap that, if closed, would create a game-changing impact for your organization. 
     
  1. It’s at high risk of failure without focused effort. A true WIG can’t be accomplished through the stroke of the pen or within the daily “whirlwind.” It can’t be mandated with a decision from leadership or solved by throwing money at the problem. It also needs to be separate from the day-to-day pressures of keeping your business running. Instead, it needs to represent a real breakthrough result—one that simply won’t happen without intensive care and special treatment. 
     
  1. It requires collective behavior change. This is the big one. A WIG demands that a large group of people in the organization do something different or more consistently to achieve it. Behavior change is hard for individuals, and even more so for organizations. (Think about how difficult it is to change a personal habit like following a different diet, maintaining a regular exercise routine, or training for a marathon. Now multiply that challenge across an entire organization!) The reason why 80-90% of organizational goals are never executed is because leaders don’t take into account the massive effort required to drive sustained behavior change—nor is there a system in place to facilitate that behavior change. 

These criteria are often overlooked when organizations identify their OKRs and KPIs, making WIGs unique in terms of both focus and impact. Leaders will need to keep both focus and impact in mind when they narrow down their options to just one WIG—a crucial component of strategic execution. 

 

Why Focus on Just One Wildly Important Goal? 

To put it simply, organizations have limited attention spans for change. When you chase too many priorities, your teams will tune you out. But when you Focus on the Wildly Important—the first discipline outlined in The 4 Disciplines of Execution®—you’re able to focus on less to accomplish more. Focus creates movement. In contrast, distraction kills execution. 

That doesn’t mean you can forget about all your other operational tasks. After all, you have to keep the business running! But selecting just one Wildly Important Goal allows you to zero in on the most impactful intention that can’t be achieved during the whirlwind of your daily work. We’ve seen that when leaders and teams commit to achieving that WIG—to putting an intense effort on that one goal—it can be transformative for the business.  

Download our free guide: 8 Ways to Boost Your Team’s Commitment to Goals 

 

How Do Wildly Important Goals Differ from OKRs vs KPIs? 

OKRs are aspirational, while KPIs tell you how much progress you’ve made. They’re both part of that daily whirlwind of the job—the things that have to get done to keep the business running.  

WIGs, on the other hand, are high-impact initiatives that require dedicated energy. Rather than being part of the whirlwind, WIGs are the essential aims that drive your breakthrough results. If they aren’t achieved, they’ll have hugely negative consequences for your organization. WIGs can often be pulled from your daily whirlwind goals; the difference is that your WIG has been deemed to be the most crucial of them all, requiring special attention to be achieved. Your WIG might be related to an existing OKR or KPI, but it could also represent new or overlooked initiatives that will make an overwhelming impact. 

Unlike some OKRs and KPIs, WIGs also follow a repeatable formula. They require actionable, measurable parameters—namely, a starting line, a finish line, and a deadline. We express a WIG in a “From X to Y by When” format, allowing leaders and teams to identify where they are, where they’re going, and how long they have to achieve the goal.  

Some examples of WIGs from FranklinCovey success stories include: 

  • Decrease waste from $44 million to $31 million by year’s end. 
  • Increase hotel guest 5-star satisfaction scores from 42% to 55% within one year. 
  • Increase college degrees and certificates earned from 6,300 to 7,000 over an 18-month period. 
  • Increase hospital patient assessment scores from 81.1 to 83.2 within one year. 

Finally, WIGs are meant to unite the entire organization or department around one specific aim. Teams develop their own sub-WIGs—essentially microgoals that support the overarching WIG—and track their progress on them, but the larger WIG is the guiding force that rallies teams to engage and unleash breakthrough results.  

In some ways, WIGs and sub-WIGs can act as an alternative to OKRs and KPIs. But for most of our clients, they’re a welcome supplement to the organizational strategy that allows for a more specified focus on only one initiative that will have a significant impact on the business as a whole.  

To put it another way: OKRs and KPIs measure the mountain. But WIGs move the mountain. If you want real change, you need more than a measurement—you need a movement. That’s the power of a Wildly Important Goal. 

 

How to Choose a Wildly Important Goal 

The concept may be simple, but selecting a Wildly Important Goal is easier said than done. Leadership teams can and do spend many hours—or even days—on this process. Your WIG needs to have both a high strategic impact and a high risk of not being executed without specialized attention. It also needs to be clear and highly specific. It’s a process that requires and deserves concerted effort. 

When we work with clients to narrow down a WIG—which we also refer to as the breakthrough result—or a sub-WIG, we’ll put teams through a prioritization exercise. They’ll list their top goals, including their most important OKRs and KPIs, that they think could be good candidates for a breakthrough result. We’ll then plot a few of these potential WIGs on a matrix to capture two things:  

  1. The goal’s risk of not being executed—the likelihood that this particular goal won’t be achieved without intense focus—and 
  1. The goal’s strategic impact—or the effect that achieving this goal would have on the strategy and the business as a whole.  

Once those goals are plotted on the matrix, we’ll determine how much each goal is “worth” based on its potential financial, shareholder, and strategic impact, as well as its risk of not being executed.  

If the goal’s impact and its risk level are both high, it’s probably a great candidate for becoming a WIG, or breakthrough result. But if a goal is more likely to be achieved through the everyday whirlwind efforts, or if its potential impact doesn’t fit into that high-stakes category, we’ll go back to the matrix and determine a better WIG to focus on. This prioritization process helps teams avoid one of the classic goal-setting pitfalls—focusing on the wrong goals—by breaking down exactly which organizational aim is the most important for strategic success. 

Here’s an example of how to tell the difference between a good WIG and a not-so-good WIG candidate. In the airline industry, passenger safety matters a lot for strategic impact; getting it wrong could have major implications for an airline. But passenger safety isn’t really considered to be at a high risk for not being executed because airlines are already required to practice good safety measures. In contrast, on-time arrivals have both a high strategic impact and a high risk of execution failure. Think about it: It’s pretty miraculous when your flight isn’t delayed! And an airline that’s known for consistent on-time arrivals would experience major payoffs. In this example, we’d want to center our WIG around on-time arrivals, as it ticks the boxes for both impact and risk. From there, we’d determine an ambitious yet winnable improvement to make—the target finish line, or the “Y” in the “From X to Y by When” equation”—and the deadline to achieve the breakthrough result. 

The right Wildly Important Goal will vary greatly from organization to organization, but it’s always going to be determined by its potential impact and its risk of not being executed. WIGs capture both significance and urgency in a way that OKRs and KPIs typically don’t.  

Download our free guide: 4 Steps to Refine and Execute Your Team Goals 

However, WIGs aren’t the only key aspect of strategic execution. In order to actually achieve your aims, you need a solid framework to follow.  

 

Unlocking Strategy Execution With the 4 Disciplines 

The 4 Disciplines of Execution (4DX) system is based on the concepts outlined in The 4 Disciplines of Execution, the number 1 bestselling book on execution in the last decade. The system is designed to provide a simple, repeatable formula for organizations to effectively execute their most important priorities. It establishes a framework to facilitate and drive collective behavior change—one of the most crucial and overlooked elements of successful strategic execution.  

Discipline 1, Focus on the Wildly Important, involves narrowing your focus to identify the right WIG for your organization. This is the first step in creating a winnable game for strategic execution. As noted earlier, there’s a lot of prep work that goes into this initial discipline—but if you don’t take that time to find and finesse your WIG and communicate it to every team member, there’s no way you’ll succeed. 

In Discipline 2, Act on the Lead Measures, we figure out which activities are going to be most impactful in achieving our WIG (or sub-WIG) and prioritize them. Your lead measures track those critical activities—we like to say that these are actually behaviors that have been converted into metrics—and predict how successful your efforts will be. Lag measures, in contrast, tell you whether or not you’ve achieved the goal. Most organizations pay close attention to lag measures, including KPIs, because they’re the sorts of things you lose sleep over: revenue, profits, quality, and customer satisfaction, among them. But by the time you see what’s happening with the lag measures, it’s already too late to influence the outcome. While both lead and lag measures can play a role in successful strategy execution, leads speak to the specific steps being taken to achieve the goal; lags simply measure your outcomes and tell you how likely you are to succeed. By putting your focus behind the lead measures, you’ll automatically influence the outcome of those lags. You can use our free 80/20 Activity Analyzer tool to determine the most impactful activities for your team to focus on. 

Next is Discipline 3: Keep a Compelling Scoreboard. Simply put, people play differently when they’re keeping score. Having the right scoreboard can motivate players to win. And unless team members can see their progress in real time, those lead and lag measures aren’t going to be as meaningful. The 4DX system tracks the pace of execution in a dynamic, visual way—a color-coded sliding scale that measures the difference between the behaviors being performed (lead measures) and the desired outcome (lag measures). We refer to this as XPS, or your Execution Performance Score. The goal is to get green—to stay “right and tight” on the scale—which indicates that you’re on track. The higher your XPS, the greater your results and your ability to sustain (or even improve) them. Think of it like a grade point average; it’s simple, but it’s a highly effective way to measure progress.  

Finally, we have Discipline 4: Create a Cadence of Accountability. Having a scoreboard won’t mean much if there’s no accountability surrounding the goals. We recommend that teams meet on a weekly basis—though this cadence can vary—to review each team member’s commitment to making an impact on the scoreboard, as well as holding each other accountable to the pace of execution and progress being made. When teams see that the activities they’re doing every week are having a direct impact on their WIG or sub-WIG, that sense of winning drives both performance and engagement in a way that standalone metrics don’t.  

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KPI vs OKR: Prevalent Pitfalls That Impede Execution 

OKRs and KPIs are good to have. But on their own, they don’t automatically translate to execution excellence. To ensure you actually achieve those goals, your leaders and teams need a system to follow—one that allows organizations to avoid many of the most common problems that occur during strategic execution.  

During my time with FranklinCovey, I’ve found that organizations frequently fall into the same traps when trying to execute their strategy. They include: 

  • Having Unclear Goals: Our research shows that just 15% of employees are aware of their organization’s goals. That lack of clarity means that employees can’t be engaged or reach their full potential. If they don’t even know what the goal is, how are they supposed to devote their best efforts to achieving it? With a system like 4DX, transparency is built right in; those goals must be defined and communicated throughout the organization. What’s more, team members feel accountable and motivated to do their part to achieve the goal.  
     
  • Having Too Many Goals: Having too many goals is just as bad as not clearly defining a goal. Ambitious people naturally want to achieve a lot, but having too many goals splits your focus and makes your ambitions much less achievable. WIGs unite teams and organizations around one sole initiative. While the daily whirlwind tasks still need to get done, having that single goal creates intense focus and gives team members a sense of purpose, which we know is a crucial component of employee engagement.  
     
  • Senior Leaders Measuring the Wrong Goals: One of the most common challenges organizations face, especially at the senior leadership level, is selecting and measuring the wrong goals. The key here is identifying which high-risk goals truly deserve intense focus and effort, compared to those that will naturally be achieved through the rhythm of daily operations. Too often, executive teams fail to spend enough time selecting the right breakthrough results. Consequently, they don’t get the buy-in and engagement they need. When this process is rushed or poorly executed, the initiative loses momentum before it ever gains traction. 
     
  • Front Line Teams Measuring the Wrong Goals: It’s not only senior leaders who identify and measure the wrong goals. Around 60-70% of the time, we find that when we help organizations implement the 4DX system, we end up focusing on metrics the business isn’t currently tracking or measuring. That’s because we focus on the specific behaviors that drive results—the lead measures—rather than just the outcomes themselves. Most businesses and teams default to tracking lag indicators (like KPIs or OKRs) but fail to drill down into the behaviors that directly influence those metrics. The real game-changer is shifting focus from measuring results to acting on and measuring the behaviors that create those results. 
     
  • Lack of Accountability: One issue with OKRs is that they’re not reviewed frequently in most organizations. You might hear about them once a quarter at an all-hands meeting or once a month, if you’re lucky. KPIs aren’t necessarily reviewed more frequently, either—and when they are, you don’t have a real opportunity to change course if needed. The 4D system creates a cadence of accountability in the workplace and provides a scoreboard, which both show how each person’s actions and behaviors are tied to achieving those goals. Because that progress is reviewed weekly, you can fit enough “reps” in to make progress and adjust as needed without losing sight of the bigger picture. And when each team member feels a sense of ownership of and responsibility for their part in achieving the goal, their commitment turns into a personal promise, rather than an arbitrary target they can miss if needed. 
     
  • No Behavioral Focus: Most OKR-focused methodologies really have two components—defining the metric and reviewing progress. Not only do these methodologies not have a scoreboard or establish a frequent reporting process, but they also don’t track the behaviors that drive the goal. Bain & Company says that behavior is what drives results. In other words, achieving your strategic goals requires collective behavioral change. That’s what makes execution so difficult, and it’s what causes the vast majority of strategies to fail. The goal you’re trying to execute on requires far more than physical labor or brain power. To achieve your aims, you have to first inspire a mindset shift—which then leads to a behavioral shift—in your teams. That’s immensely hard to do, especially when you’re caught up in the day-to-day maintenance of the whirlwind. But if you fail to address the mindset shift and the subsequent behavioral change that needs to be made, you won’t successfully execute your strategy—even if it looks beautiful on paper. With the 4DX system, we focus on the behaviors that drive the outcomes, which is what really differentiates our methodology and unleashes performance in teams.  

Download our free guide: Execute Your Strategic Goals and Create Breakthrough Results 

 

Supercharging Your Strategic Execution 

The majority of strategies hinge on widespread behavior change. It’s hard to change your own behavior. Changing somebody else’s is even harder. And changing the behavior of a whole group of people feels practically impossible without expert help. But when you don’t address that need for collective behavior change as part of your strategic execution, there’s very little chance you’ll achieve your goals. 

Here’s the bottom line: While OKRs can offer big-picture inspiration and KPIs provide insight into the data, neither of these metrics provide a framework for engaging employees, uniting them around a common goal, and ensuring accountability for breakthrough results—all behavioral indicators of a successful strategic execution. With the 4D system, we can supercharge KPIs and OKRs by identifying your most impactful goal and providing you with the step-by-step process for achieving it—enabling your leaders and teams to engage in powerful behavior change and unleash breakthrough results. 

Watch our webcast, Execution Excellence: Bringing Your Strategy to Life 

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