OKR vs KPI vs SLA vs BSC vs BHAG: 5 Frameworks Compared

What is OKR?

Objectives and key results (OKR) is a goal-setting framework used to define goals and track their outcomes. OKR can be used by individuals, teams, as well as companies. It is used to direct or focus a business and its team around one big, collective goal.

OKRs comprise an objective, which is a clearly defined goal and key results. Key results are measurable success criteria used to track the progress or achievement of the clearly defined goal.

Objectives should be significant, concrete, and clearly defined, and they should also be inspirational for each individual, team, or organization working towards achieving the objectives. Individuals, team, as well as the whole organization, should have a plan and strategies in place towards achieving the objectives.

Key results are the results delivered or achieved after the objectives are met. Key results should be measurable, and there should be markers to determine whether the plans and activities taken towards achieving the key results have been successful.

What is KPI?

Key performance indicator (KPI) is a quantifiable measure of performance over time for a specific objective. KPI provides targets for teams to meet and milestones to gauge progress.

KPI also provides insights that help everyone across the entire organization make better decisions. KPI help every department and areas of a company including finance, HR, marketing and sales, move forward at the strategic level.

KPIs are the key targets every business owner should track to make the most impact on their strategic business outcomes.

By tracking KPI, business owners can know which of their teams are performing well and which areas need improvements. It helps you understand how your business, including each department or area of your business, is performing.

Types of KPIs

There are many different types of KPIs. Some are used to short-term or monthly progress against a goal, others are used to measure longer-term progress. However, all KPIs have are tied to strategic goals.

Below are some of the most common types of KPIs.

Strategic KPIs

Strategic key performance indicators monitor organizational goals. Strategic KPI is used to measure the progress of the strategies that you and your team have put in place.

Executives typically track strategic KPIs to find out how the organization is doing in different areas at any given time. Examples of strategic KPIs include return on investment, revenue and market share.

Operational KPIs

Operational KPIs typically measure performance in a shorter time frame. These KPIs focus on organizational processes and efficiencies.

Operational KPIs allow you to assess what’s actually happening in your business on an hourly, daily, weekly and monthly basis. These insights help you to understand your business more and also help you know the areas that need improvements.

Operational KPIs provide you with important information about the areas, processes or employees that are falling behind or going off course so that you can quickly take corrective actions to solve the issue before it escalates into a full-blown problem.

Functional Unit

These KPIs track performance of functional units. Many key performance indicators are tied to specific functions. For example, IT KPI might track time to resolution or average uptime while finance KPIs track gross profit margin or return on assets.

Leading vs Lagging KPIs

Leading KPIs can help predict outcomes while lagging KPIs track what has happened already. Organizations use both leading and lagging KPIs to ensure that they’re tracking what’s most important.

What is SLA?

Service-level agreement (SLA) is a written agreement that qualitatively and quantitatively specifies the service committed by a service provider to a client.

Aspects of the service such as quality, availability, and responsibilities are agreed on between the service provider and the client.

SLAs commonly include many components, starting from a definition of services to the termination of the agreement. A common component of SLAs state that the service should be provided to the client as agreed upon in the contract.

SLA identifies the metrics used to measure the level of service provided. It also identifies the remedies or penalties that will result from failure to meet the agreement in the contract.

An SLA is required to support the performance of operations that depend on the services provided by the service provider.

A typical SLA will contain the following components:

Type of service to be provided

An SLA specifies the type of service to be provided and any additional details of the service. It provides the details of the service that will be provided from operations to maintenance. Any services that will be provided are well detailed in the contract agreement.

The service's desired performance level

It also specified the service’s desired performance level such as its reliability and responsiveness.

A reliable service that performs optimally is a service that suffers minimum disruption in a specific amount of time and it’s also readily available at almost all times to the users. Service with good responsiveness will promptly perform the desired action.

Monitoring process and service level reporting

An SLA also includes details of how the performance levels are supervised and monitored. The monitoring process involves gathering different types of statistics, how frequently these statistics will be collected, as well as how these statistics will be accessed by the customers.

The steps for reporting issues with the service

An SLA also specifies the contact details to report an issue to and the order in which the details about the issue will be reported. It also includes a time range in which the issue will be looked into and also when the issue will be resolved.

Response and issue resolution time-frame

This is the time period by which the service provider will start the investigation of the issue with the service. The issue resolution time frame is the time period by which the current issue with the service will be resolved and fixed. All these will be included in the SLA contract agreement.

Repercussions for the service provider not meeting its commitment

If the service provider is not able to meet the requirements as stated in the contract agreement, then the service provider will have to face consequences.

These consequences may include the client’s right to ask for a refund for the losses incurred due to failure of service or termination of the contract.

What is BSC?

Balanced scorecard (BSC) refers to a strategic management performance metric used to identify and measure various internal business functions and their resulting external outcomes. BSC is used to measure and provide feedback to decision-makers such as managers and executives in an organization.

Balanced scorecard provides data and information that company executives use to make better decisions for the future of their company.

It is a performance metric used by businesses to identify, improve, and control the various functions of the business and resulting outcomes.

A balanced scorecard involves measuring four main aspects of a business. These four main aspects include:

Learning and growth

Learning and growth are analyzed and measured through the investigation of training and knowledge resources. It handles how well information is captured and how those information are effectively used by employees for their competitiveness within the industry.

Business processes

Business processes are analyzed and evaluated by investigating how well products are manufactured. Operational management tracks and analyzes any gaps, delays, bottlenecks, shortages, or waste within the business.

Customer perspectives

Data on customer perspectives are collected to analyze customer satisfaction with the quality, price, and availability of products or services.

Finance

Financial data, such as sales, expenditures, and income are collected and used to understand financial performance within the company.

A balanced scorecard is used to gather important information from these four main aspects of a business to better improve the overall business performance. Companies can easily identify factors that hinder their business performance from the information gathered and outline strategic changes that need to be taken.

A company may use the balanced scorecard to implement strategy mapping to see where value should be added within the company. A company may also use a balanced scorecard to develop strategic initiatives and strategic objectives for the growth of the company.

What is BHAG?

Big Hairy Audacious Goal (BHAG) is a clear and compelling target set for an organization to strive to attain. It is a compelling, long-term goal that is intriguing enough to inspire employees to take necessary actions to achieve the goal.

BHAGs are meant to pull people out of their comfort zones, energize them and give them a reason to set and implement a long-term big picture goal or target. BHAGs are meant to excite and energize employees in a way that quarterly targets often fail to.

BHAGs broadly fall under four main categories, which are:

• Role model - Seeking to emulate the success of a role model, such as a well-known company. 

• Common enemy - Seeking to overtake a common enemy or competitors. Often aiming at beating and overtaking the top companies in the industry. 

• Targeting - Setting a remarkable target. For example, you want your company to become a billion-dollar company or rank #1 in the industry. 

• Internal transformation - Remain competitive in the industry by internal transformation such as revitalizing your employees and your business processes.

Why is KPI better than OKR?

Key Performance Indicators (KPIs) are defined as performance metrics or measurements that evaluate the success of a specific objective, activity or the entire organization. KPIs can apply to a variety of initiatives including projects, programs, products, and services. KPIs can be used to measure the success of anything in an organization.

If you want to meet your organization’s objectives, KPIs should be tailored to your specific organizational objectives, how you plan on achieving them, and those that can work or act towards achieving them.

Objectives and Key Results (OKRs), on the other hand, is defined as a goal-setting framework that outlines and defines a company or team’s goals and tracks the outcomes of those goals.

OKRs represent aggressive and ambitious goals and define the measurable steps you’ll to achieve those goals. OKRs can be set at the company, team, and individual levels.

OKR vs KPI

One of the main OKR vs KPI is the intention or reason behind the goal setting.

KPI goals are typically obtainable. They represent the output of a process or project that is already in place, while OKR goals are somewhat more aggressive and ambitious.

While OKR goals should be more aggressive and ambitious, they shouldn't be unreachable. The idea behind OKRs goals is so you can push your team and yourself to perform much better to achieve better results.

Which one is better OKR vs KPI?

When evaluating which is better and which one to use between KPI and OKR, it's really up to you and the goal you have set.

KPI goals are more attainable but don’t require so much effort as OKR goals. For example, if you intend to scale or improve upon a project that's been previously done, KPIs might be the better option for you.

This is because KPIs are straightforward and measurable. KPIs allow you to add measurement features and improvements to your ongoing projects.

However, if you have a larger vision or you want to change the entire project, OKRs might be the better alternative. This is because OKRs have greater depth that will allow you to stretch your goals even further.

OKRs expand your abilities and strength so you can be a bit more creative on how you plan to reach those ambitious goals.

Can you use KPI and OKR?

As we earlier said, you can use either KPI or OKR depending on the goal that you have set. KPI goals are more attainable and require lesser efforts to achieve than OKR goals. If your goals are not so ambitious, it is better to use KPI but if your goals are ambitious, it is best to use OKR.

Are OKRs the same as KPIs?

OKRs are not the same as KPIs. Key performance indicator (KPI) is the measurement of performance for a specific objective or goal while objectives and key result (OKR) is a goal-setting framework used to define measurable goals and track their outcomes.

While KPI measures the performance of specific goals, while OKR sets goals, defines goals, and also tracks their performance and outcomes.

OKRs comprises of two basic parts which are:

• The objective, which is qualitative and defines what you want to do.

• The key results, which are quantitative and define how you will know whether or not you have achieved the objective.

What does OKRs stand for?

OKRs stand for Objective and key results

What KPIs does Google use?

KPIs stand for key performance indicators

What is Agile OKR?

The combination of OKRs and Agile is about taking a successful process (Agile) and making it more outcome-driven (OKRs). OKR and Agile are a powerful combination that can create value-driven teams and completely transform how organizations work.

OKRs are a framework that helps you move from Agile-defined output to more traditional business outcome metrics. Agile OKRs allows team to be more thorough in their activities and have detailed understanding of how to achieve their objectives.

What are Facebook KPIs?

Facebook KPIs are performance metrics or measurements used to track specific details of a Facebook Page. These performance metrics or indicators define the value and success of your business on Facebook.

Facebook KPIs can be used to measure the performance of different areas or engagements of a Facebook page. These include:

• Number of Fans your Facebook page has generated

• Follower Demographics

• Page Views by Sources

• Actions on Page

• Reach by Post Type

• Post Engagement Rate

• Click-Through-Rate (CTR)

• Ad Impressions & Frequency

• CPM & CTR of Facebook Ads

• Cost per Conversion

What metrics measure success?

Success metrics are key performance indicators or measurable data used to measure or determine the success of your business.

Success metrics may differ from one business to another depending on their business priorities. However, success metrics are actionable, measurable and drive successful actions.

There are different types of metrics to measure business success. These include:

1. Leads, conversion and bounce rate

Tracking leads, conversion and bounce rates can be crucial to ensuring the success of your business’s marketing and sales efforts. Increased lead conversions and lower bounce rates indicate the success of your marketing and sales efforts.

2. Break-even point

The break-even point is the amount of money a company must earn in a given period (either monthly or quarterly) to cover its costs and sustain itself.

Tracking your break-even point to know whether your company is meeting, exceeding or falling short of the required funds is key to knowing if your company is successful or not.

3. Net income ratio

The net income ratio is the balance left when a company subtracts its expenses from its revenue. The net income ratio is the profit a company makes. Your net income ratio is a success metric that determines if your company is thriving or not.

4. Monthly recurring revenue

Monthly recurring revenue is the total revenue a company makes during a specific period, usually within a month. The revenue a company makes in a month will allow the company to know if they’re making progress or not.

5. Customers

Customers are the bedrock of every business. Without customers, your business will not thrive. This is why companies invest in customers’ acquisition and satisfaction. The more customers your business has, the more successful your business becomes.

Many companies measure customer experience and they find valuable insights for long-term success.

Measuring customer acquisition and experience can provide you with valuable insights on how to improve or grow your business.

There are a variety of customer-focused metrics that can be measured. These include:

• Conversion rate

• Net promoter score

• Customer satisfaction score

• Customer health score

• Customer retention cost

• Customer lifetime value

• Customer churn rate

6. Return on investment

Return on investment (ROI) is the ratio between income and the money you spend on investment.

ROI is measured by subtracting your company's cost of goods or services from revenue, and then, dividing the result by the cost of goods or services that your company sold.

By measuring your ROI, you'll be able to evaluate whether your investment yielded profits or not.

What are IT metrics?

IT metrics are quantifiable measurements used by IT leaders to help measure the performance or success of the business of IT to the rest of the entire business.

IT metrics help IT leaders understand the value of technology and demonstrate the value of IT and how it impacts the rest of the business.

IT is very large and there is no single set of metrics that’s best to look at. The right metrics that you will measure or look at will depend largely on your own IT team, operations and business.

Choosing the right IT metrics to track is key to knowing how your IT department is performing.

What is the best criteria to measure success by?

The best criteria to measure the success of your business are customer acquisition and experience.

If you’re acquiring more customers for your business, you will be able to make more sales and generate more revenue. Also, if your customers have good and satisfying experiences with your business, they will keep coming back to make more purchases.

What is the most commonly used measurement of business success?

The most commonly used measurement of business success is customer acquisition and satisfaction.

Acquiring more customers means more sales and more revenue. When customers are satisfied with your business, they will keep coming back. The more customers your business can satisfy, the more successful your business will become.

Customer acquisition and satisfaction generally mean growing revenue and success for your business.

What is the difference between OKR and KRA?

Objectives and Key Results (OKRs) are a set of challenging goals or objectives that are made public to the whole team while Key Result Areas (KRAs) are daily or monthly tasks assigned to individuals that align with the overall business strategy.

What is the difference between KPI and SLA?

Key Performance Indicators (KPIs) provide metrics or information on the efficiency and success in meeting company’s goals, while Sales Level Agreements (SLAs) are used to ensure that service level metrics don't fall below certain metrics criteria.

KPIs are generally used to measure the performance of a company’s operations, while

SLAs are service agreements between a service provider and its customers.

What is the difference between KPI and ScoreCard?

KPI is generally a measure of the performance of a business or company’s operations, while ScoreCard is basically used to display graphic indicators that visually convey the performance of a business in its efforts to achieve a particular goal.