OKRs vs KPIs: What's the difference?

KPIs measure health; OKRs measure change.You need both to run a healthy business that is also growing.A car has a speedometer(KPI) and a destination(OKR).

The Car Analogy

Imagine you are driving a car from New York to San Francisco.

Destination(O): Reach San Francisco by Friday.
Milestones(KR): Drive 500 miles/day.Cross the Mississippi River by Tuesday.
Dashboard(KPIs): Speedometer (65mph), Fuel Gauge (Full), Engine Temperature (Normal).

If your engine overheats(KPI turns red), you must pull over.You will miss your Destination(OKR).KPIs are "health metrics" that you maintain.OKRs are "growth metrics" that you push.

Anatomy of an OKR

Objective: Qualitative, Inspirational, Time-bound.
"Make our checkout experience buttery smooth."

Key Results: Quantitative, binary (pass/fail).
KR1: Reduce Checkout API latency from 200ms to 50ms(p99).
KR2: Reduce Cart Abandonment Rate from 40 % to 30 %.
KR3: Increase Payment Success Rate to 99.9 %.

Outputs vs Outcomes

The #1 mistake teams make is writing Output OKRs (Task Lists).
Bad KR: "Launch Dark Mode."
Why it's bad: You can launch Dark Mode, and no one uses it. You successfully did work but created zero value.

Good KR: "Access 10% of Daily Active Users via Dark Mode."
This forces you to launch it, market it, and ensure it's usable.

Sandbagging vs.Moonshots

Google aims for 70 % achievement . If you hit 100% of your OKRs, you didn't aim high enough (Sandbagging). If you hit 30%, you were delusional.
The "Sweet Spot" is 0.6 - 0.7.This encourages risk - taking.If failure is punished, people will set easy goals.

When to use which ?

Scenario	Tool	Example
Steady State(BAU)	KPI	Server Uptime, Customer Support CSAT
Strategic Initiative	OKR	Expand into European Market

Conclusion

You need KPIs to survive, and OKRs to thrive.Don't replace one with the other. And please, stop listing "Attend 5 meetings" as a Key Result.