OKR vs. KPI: the difference and when to use what
OKR and KPI are used in every other management presentation — and mixed up in just as many. Here you get the difference explained in a Danish SME context, concrete examples of both, and a recipe for linking them to strategy so that the numbers actually drive something.
Published · Updated · 7 min read
In short
- KPI = ongoing metric for something you operate continuously. OKR = time-bound ambition with measurable key results.
- KPIs monitor status. OKRs move what is furthest behind.
- 5-15 KPIs and 3-5 OKRs per quarter are enough for most SMEs.
- Both must be linked to strategic goals and have a named owner, otherwise they don't drive anything.
The short difference
A KPI is a metric that shows the status of something you operate continuously: delivery precision, gross margin, repurchase rate, absenteeism. The KPI has a normal and a limit — it must be maintained or improved, and it doesn't disappear when the quarter ends.
An OKR is an ambition with a timeframe: an Objective that describes what you want to achieve, and 2-4 Key Results that make the ambition measurable. OKRs are used to significantly move something within a quarter or half-year — not to monitor daily operations.
The mistake most people make is calling their KPI list OKRs. This results in a long list of numbers without direction, and no one can answer what is most important right now.
KPI vs. OKR in practice
| Area | KPI | OKR |
|---|---|---|
| Purpose | Monitor the status of something ongoing. | Significantly move something within a defined period. |
| Time Horizon | Ongoing — measured month after month, year after year. | Quarter or half-year, after which it is replaced. |
| Ambition Level | Must be maintained or gradually improved. | Ambitious — 70-80% achievement is often a good result. |
| Number | 5-15 for an SME, distributed across perspectives. | 3-5 objectives per period with 2-4 key results each. |
| Typical Example | Delivery precision ≥ 95%. | “We become the obvious supplier in Jutland” with key results for new customers, pipeline, and repurchases. |
| Consequence of Red | Operations must be corrected — often a process or resource. | Prioritization must be revisited — perhaps the ambition was wrong. |
When do you use what?
Most SMEs need both. The question is what each number should be used for.
Use a KPI when…
The number describes something that must always be under control, and where a deviation in itself is a signal.
Examples: Gross margin, delivery precision, liquidity, customer satisfaction, absenteeism.
Use an OKR when…
You want to change something significantly within a short period, and the entire management team needs to pull in the same direction.
Examples: New business unit up and running, export market opened, service concept launched.
Use a strategic goal when…
The ambition extends over 1-3 years and must be measured with several KPIs and supported by projects.
Examples: “Half of revenue comes from service agreements by 2029.”
Use a project when…
A concrete piece of work needs to be executed with a start, end, owner, and milestones.
Examples: Implementation of new ERP, establishment of service department, ISO certification.
How to set it up in five steps
1. Start with strategic goals
Without 3-6 strategic goals, both KPIs and OKRs become detached numbers. The goals are what everything else must be linked to.
2. Link 1-3 KPIs to each goal
Choose numbers you can actually quantify without manual detective work every month. Define the unit of measurement, direction, thresholds, and who updates.
3. Choose 3-5 OKRs for the quarter
Look at where the goals are furthest behind. These areas get the quarter's OKRs. Everything else is kept in operation based on the KPIs.
4. Give each number an owner and a frequency
A KPI without an owner is not updated, and a key result without an owner is not followed up. Set monthly or quarterly frequency from the start.
5. Follow up in the same meeting
One fixed cadence: KPIs are read as status, OKRs as progress. Decisions are written down with owner and deadline, otherwise the discussion repeats next time.
Classic pitfalls
- Too many numbers: 40 KPIs practically means none of them drive anything.
- OKRs that are merely operational tasks with a date — then it's a to-do list, not an ambition.
- Key results without numbers (“improve collaboration”) cannot be quantified and become opinions.
- KPIs linked solely to bonuses, whereby the number is optimized instead of the business.
- No link between numbers and strategic goals, so the management team cannot see what actually moves the strategy.
Spreadsheet vs. Plandura
The model can easily be run in Excel. The problem arises when numbers need to be updated, linked to goals, and read by multiple people.
| Area | Spreadsheet | Plandura |
|---|---|---|
| Link to strategy | Numbers are in tabs without relation to goals. | KPIs can be directly linked to a strategic goal, and the goal's status is calculated from them. |
| Status | Colors are set manually — often just before the meeting. | Status is automatically calculated based on thresholds and direction. |
| History | Overwritten when new numbers are entered. | Each update is logged, so development can be tracked over time. |
| Follow-up | Depends on someone remembering to prompt. | Fixed review cadence with agenda based on actual status and ownership. |
Frequently asked questions
What is the difference between OKR and KPI?
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A KPI is an ongoing metric that shows the status of something the company operates continuously — for example, delivery precision or gross margin. An OKR is a time-bound ambition consisting of an Objective and 2-4 measurable Key Results, typically for a quarter. KPIs monitor, OKRs drive change.
Can both OKR and KPI be used?
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Yes, and that is usually the right approach. KPIs keep operations under control, while OKRs are used to move areas where the strategy is furthest behind. A KPI can well be included as a key result in an OKR for a period where precisely that KPI needs significant improvement.
How many KPIs should an SME have?
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5-15 KPIs are appropriate for most SMEs, distributed so that each strategic goal has 1-3 KPIs. More numbers than that practically means none of them become guiding, because the management team cannot oversee them in a meeting.
What is a good Key Result?
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A good key result has a number, a direction, and a deadline: “share of service agreements increases from 18% to 30% by June 30th”. Formulations without numbers cannot be quantified and end up as opinions. Also avoid key results that merely describe an activity — that's a task, not a result.
How often should one follow up?
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KPIs are typically updated monthly, while OKRs are reviewed monthly and finalized at the end of the quarter. The most important thing is that follow-up occurs in a fixed cadence with named owners, rather than when someone randomly asks.
Does Plandura support both OKR and KPI?
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Yes. Plandura works with strategic goals, to which KPIs can be linked, and with strategic projects and milestones for execution. KPIs are given a unit of measurement, direction, and thresholds, so status is automatically calculated, and each update is logged with history. Follow-up occurs in fixed strategy reviews with a decision log.
Related guides
These guides are closely connected to okr vs. kpi and are natural next steps in your strategy work.
- Balanced scorecard explainedThe four perspectives and the path from strategy to measurable goals.
- Strategy map: how to build itVisual cause and effect between goals, themes and results.
- Strategy process for SMEs in 6 stepsFrom analysis to an agreed strategy — without a six-month project.
- Strategy Software vs. Excel
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