Author:
Billy Casey

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Dear Andy,

My question is about OKR for a finance team. My company makes AI products and has around 200 people. The finance work is mostly repetitive (managing the budget, purchases, documents, contracts, etc.) so when we tried to align the finance team OKR with the company’s OKR, they struggled to see how they contribute to the greater picture. Their OKRs have been the same for three cycles already and their KRs generally look more like KPIs. To them, ‘submit all contracts on time’ or ‘control a budget’ is stretch work. Is it okay for the KRs to look like KPIs? Is it ever okay to keep the same Objective for more than one cycle?

Best regards Jo

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Hi Jo, thanks for writing in!

Ah yes—the age old ‘KPI vs KR’ question. I know it well. For those who need a quick refresher, KPI (Key Performance Indicators) are the measurements that tell you how your organization is doing: your website uptime, your customer service satisfaction, the quality of your product, etc. While KPIs are often considered BAU (Business As Usual—a big no-no for OKRS), there are times when KPIs can inform - and even become - your OKRs if it’s a measurement that you want to significantly change.

In your finance team’s case, if their ability to submit their contracts on time has slipped so far that it’s become a common issue (and it sounds like it has), it makes perfect sense to elevate it to the level of an OKR. Once it’s holding steady, you can demote it to a KPI - you still want to keep an eye on it - but it doesn’t need to be an OKR because it doesn’t need to change. Remember, you use OKRs to lead, and these other processes, like KPIs, to manage.

It sounds like a pattern has emerged. If your finance team struggles to meet their deadlines time and time again, perhaps it’s time to reevaluate whether or not these deadlines are achievable in the first place. If the deadlines are non negotiable, what is the team missing that is stopping them from reaching these goals? Do they lack sufficient support or is there a communication process that needs tightening? Process improvements make good OKRs - just make sure your KRs are measurable improvements, not tasks. Consider something like this:

o
Improve Operational Efficiency
kr1
Contract turn-around time reduced by 20%
kr2
All budgets controlled with X% margin of error
kr3
Pay/or collect invoices 10% faster

While some teams keep the same OKRs for several cycles, it’s important to honestly evaluate progress at the end of each cycle. If you fall short, consider the changes necessary to achieve success the next time around. Ask honestly, is this still a top priority? If you came close to succeeding, is it realistic to raise the bar on performance? It’s okay to keep the same Objective but adjust the KRs cycle by cycle accordingly.

Well Jo, I hope this has been helpful for you. Your investment in your finance team’s growth is admirable and, I’m sure, much appreciated. Thanks again for writing in and best of luck to you.

Sincerely, Billy from the What Matters Team

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