I’ve said sometimes that OKRs can turn into business-as-usual. This is often the case with Build OKRs, where you are creating something new.
OKRs aren’t a great tool to keep track of your business-as-usual (you’d be working on the same OKRs all the time). KPIs are better equipped for this purpose: they provide you with simple indicators that instantly tell you on a high level if your business-as-usual is going well or not.
We recently ran into a situation where one of our OKRs became business-as-usual and, thus, turned into a KPI. I thought I’d share this example with you to help you better understand the relationship between OKRs and KPIs.
How an OKR became a KPI
In the previous quarter, our Marketing team was working on an OKR to optimize our website’s conversion rates.
We’ve used Google Optimize in combination with Google Analytics to run all sorts of experiments to help us increase the performance of our website and convert more website visitors to leads.
The OKR was a great success but we’ve also learned that running these experiments takes a lot of time. Each experiment must run for at least two weeks, and sometimes much longer depending on the traffic that you get on a particular page.
Because our website is the main place where people can learn about us and where we can learn about those people, it’s always going to be important that the conversion rates are as high as possible. Since we believe there’s always room for improvement, we’ve decided that running experiments (with the aim to increase conversion rates) should become business-as-usual for our Marketing team.
So after we’ve accomplished our OKR and gave our conversion rates an initial boost, we’ve decided to create a new Marketing KPI that safeguards the constant tweaking and optimizing of our website’s conversion rate. This KPI, Optimize website conversion rate by 5% per month, makes sure that running experiments with the aim to increase conversion rates becomes business-as-usual.
How an OKR can fix a KPI
It can also work the other way around.
For example, we also have a Marketing KPI that tracks the overall conversion rate of our website. We want this KPI to be at 7% or higher. That means that as long as 7% of our website visitors converts to a lead, we’re all good and Marketing doesn’t need to put extra focus on this.
Should this KPI show that the conversion rate drops below 7%, Marketing could make it a priority to fix this KPI and bring the overall conversion rate back to the desired level. In other words, Marketing could create an OKR to fix this KPI.
As you see, there can be strong relationships between KPIs and OKRs. OKRs can turn into KPIs, and KPIs can be fixed through OKRs. This is one of the reasons why it makes sense to track your KPIs and OKRs in one place.
Combining them also gives you full transparency on the priorities of each area of your business, like Marketing, Sales, or Product.
In Perdoo, you can visualize these relationships by aligning an OKR to a KPI in order to take it to the next level. On each KPI you’ll then see what you’ve tried – or how you’re trying – to improve it.