{"id":42932,"date":"2021-03-25T15:00:22","date_gmt":"2021-03-25T19:00:22","guid":{"rendered":"https:\/\/balancedscorecard.org\/staging\/?p=42932"},"modified":"2023-04-26T13:55:04","modified_gmt":"2023-04-26T17:55:04","slug":"okr-kpi-and-bsc-what-is-the-difference","status":"publish","type":"post","link":"https:\/\/balancedscorecard.org\/staging\/blog\/okr-kpi-and-bsc-what-is-the-difference\/","title":{"rendered":"OKR, KPI and BSC: What is the Difference?"},"content":{"rendered":"\n[et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.9.0&#8243; _module_preset=&#8221;default&#8221;][et_pb_row _builder_version=&#8221;4.9.0&#8243; _module_preset=&#8221;default&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.9.0&#8243; _module_preset=&#8221;default&#8221;][et_pb_text _builder_version=&#8221;4.9.2&#8243; _module_preset=&#8221;default&#8221;]<p><br \/><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/balancedscorecard.org\/staging\/wp-content\/uploads\/2021\/03\/OKRs-BSC-KPI_500x400-300x240.png\" width=\"300\" height=\"240\" alt=\"BSC - KPI- OKR\" class=\"wp-image-42937 aligncenter size-medium\" style=\"float: right; padding: 0px 0px 0px 15px;\" \/><span style=\"font-size: 14px;\">I was talking with a client the other day about adding OKRs to their BSC system and she stopped me in mid-sentence. \u201cWait a minute,\u201d she said with a skeptical smile. \u201cAre OKRs just KPIs with a new name so that you consultants have something new to sell?\u201d<\/span><\/p>\n<p>To her point, there is considerable overlap between these different methodologies. They are all designed for:<\/p>\n<ul>\n<li>Setting goals<\/li>\n<li>Creating alignment<\/li>\n<li>Measuring progress<\/li>\n<li>Improving performance<\/li>\n<\/ul>\n<p>It is a bit frustrating to have competing frameworks that are so similar and then have advocates on social media arguing strongly for their favorite as if there are huge differences. But there is value in understanding the differences so that you can take advantages of the strengths of each. First, let me define each and then I\u2019ll talk through the strengths and weaknesses of each.<\/p>\n<h4><span style=\"color: #1c5877;\"><strong>Balanced Scorecard (BSC)<\/strong><\/span><\/h4>\n<p>The BSC is a strategic planning and management system that organizations use to communicate strategy, create alignment, prioritize, and improve strategic performance across different perspectives. Objectives and measures are the heart of the system. It has broader applications on the planning side, but for this blog I will focus on the measurement aspect.<\/p>\n<h4><span style=\"color: #1c5877;\"><strong>Key Performance Indictors (KPI)<\/strong><\/span><\/h4>\n<p>KPIs are indicators of success toward a desired performance result. KPIs could be thought of as synonymous with the measures in a BSC, as good KPIs are normally indicative of achieving strategic objectives.<\/p>\n<h4><span style=\"color: #1c5877;\"><strong>Objectives and Key Results (OKR)<\/strong><\/span><\/h4>\n<p>Objectives and Key Results (OKR) are used by organizations and individuals for collaboratively setting ambitious goals, tracking progress, and aligning action with an organization\u2019s strategy to achieve measurable results. OKRs tend to be written in a SMART (specific, measurable, attainable, relevant, and time-bound) format, meaning the Key Results include a targeted level of performance and a milestone.<\/p>\n<h4><span style=\"color: #1c5877;\"><strong>Strengths of these frameworks<\/strong><\/span><\/h4>\n<p>The short-hand explanation is that BSC is a framework to map out and manage strategy. Normally used for an organization, a good analogy on the personal side is to use BSC to visualize my cause-effect strategy for healthy living. KPIs are continuous long-term measurements, so one of ongoing measures of healthiness would be my weight. And OKRs are for individual short-term goal setting, so this quarter I might try to reduce my weight by 7lbs\/3kg by reducing carb intake by 25% and increasing aerobic exercise by 60 minutes per week.<\/p>\n<p>BSC and KPIs tend to be tracked continuously while OKRs tend to be set every quarter. BSC and KPIs emphasize alignment \/ line of sight while OKRs emphasize agility and autonomy. BSC\/KPIs tend to be better for long-term strategy execution and continuous improvement while OKRs are great for individual goal setting, accountability, and action.<\/p>\n<h4><span style=\"color: #1c5877;\"><strong>Weaknesses of these frameworks<\/strong><\/span><\/h4>\n<p>In terms of weaknesses, BSC\/KPI are often accused of being too static \/ sluggish and difficult to work into the day-to-day rhythm of a typical employee\u2019s day. On the other hand, OKRs often have strategy misalignment\/line-of-sight issues and can be very difficult to implement in a disciplined manner, which leads to a host of problems, such as OKRs that are really glorified to-do lists, long laundry lists of trivial measures, and a \u201cset it and forget it\u201d mentality.<\/p>\n<p>To overcome these weaknesses, you can use them together or choose one and learn from the other. Some of our clients use BSC \/ KPIs but try to infuse agile\/OKR thinking into their individual level KPI development and day-to-day execution. Then some OKR companies create \u201cshared\u201d OKRs at various organizational and strategic levels that look an awful lot like a BSC.<\/p>\n<p>If you would like to learn more about any of these terms, you might consider one of our professional certification programs:<\/p>\n<p><a href=\"https:\/\/balancedscorecard.org\/staging\/training-certification\/okr-certification-live-online\/\">Objectives and Key Results Professional (OKR-P)<\/a><\/p>\n<p><a href=\"https:\/\/balancedscorecard.org\/staging\/training-certification\/kpi-certification-live-online\/\">Key Performance Indicator Professional (KPI-P)<\/a><\/p>\n<p><a href=\"https:\/\/balancedscorecard.org\/staging\/training-certification\/balanced-scorecard-certification-online\/\">Balanced Scorecard Professional (BSP)<\/a><\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n","protected":false},"excerpt":{"rendered":"<p>Even seasoned measurement practitioners have a hard time differentiating between Objectives and Key Results (OKR), Key Performance Indicators (KPIs) and Balanced Scorecard (BSC). <\/p>\n","protected":false},"author":4,"featured_media":42942,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"<!-- wp:paragraph -->\n<p>The success of the organization is dependent upon the human capital element of your organizational capacity.<\/p>\n<!-- \/wp:paragraph -->","_et_gb_content_width":"","content-type":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[1791,1],"tags":[22,1883,13,1889],"class_list":["post-42932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-uncategorized","tag-balanced-scorecard","tag-kpi","tag-kpi-performance-measurement","tag-okr"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.13 (Yoast SEO v23.3) - 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