Deidre Paknad

A way to think about KPIs is that they’re operating metrics. There are dashboards of them, millions of them in big companies. They tell us where we are.

The big difference with OKRs is, of the million things we could measure this quarter, on a certain five or ten measures, we want to move the needle, and this is how far we want the needle to move in the next 90 days. Moving these ten needles creates more value than the other 90 that are on the dashboard. It’s about deciding what matters most, being very specific about how far you want to go in the period.

KPIs can be a bit more about the overall status. They don’t always tell you how much we were trying to gain, and they rarely tell you which are the most important now. That inability to know what matters most right now is a huge drain for organizations. Energy, effort, brain power all goes to stuff that doesn’t matter all that much, because people can’t tell the difference between where we want to put energy and where we don’t really care at this time.

OKRs are a way of aligning on what matters most right now and then iterating on that, because it’s not constant. Start-ups by their birth right are constantly calibrating a huge ambition with very little resource. Their capacity relative to their ambition is wildly mismatched, which is both the exciting and the horrifying part of being in a start-up. They don’t have unlimited time, money, and resources. So, if we had to make trade-offs of what mattered most, what would we trade in, what would we trade out? OKRs are a technique for larger companies to operate with the same notion of constraint, and that constraint helps drive choices.

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