KPIs and OKRs do different jobs. A KPI scorecard is a short, permanent set of numbers that shows whether the business is healthy, reviewed every week or month. OKRs (objectives and key results) are temporary, usually quarterly, and describe the specific changes the strategic plan requires right now. This guide shows how to write both for a company of 20 to 150 people, and how to keep them from becoming paperwork.
OKRs and KPIs: which is which
A KPI is a gauge you watch continuously; an OKR is a destination you set for the quarter. If the number would still matter in three years, it is probably a KPI. If it describes a change you are making, it belongs in an OKR.
Gross margin by line of business is a KPI: you will track it every month for as long as the company exists. "Move 300 customers onto annual service agreements by the end of Q2" is a key result: it describes a change, it has an end date, and once it is done the attention moves elsewhere. Confusing the two produces either a scorecard of 40 numbers or OKRs that are just the KPIs restated.
How to write three objectives for the quarter
Write each objective as a plain sentence that a new employee would understand, tied to one priority in your three-year strategic plan. Then give it two to four key results that are numbers with a deadline.
Here is a worked set for a fictional [Company] whose plan calls for more recurring revenue, a stronger second location and less dependence on the owner.
Objective 1: Make annual service agreements the default offer.
- Key result: 300 new agreements signed by June 30 (from 180 last quarter).
- Key result: agreement offered on 90% of completed jobs, measured from job records.
- Key result: renewal rate on expiring agreements at 85% or higher.
Objective 2: Get the second location to break even on its own.
- Key result: location revenue of $450,000 in the quarter.
- Key result: gross margin at the location of 32% or higher.
- Key result: second technician hired and working independently by May 15.
Objective 3: Take the owner out of daily quoting.
- Key result: 80% of quotes under $25,000 approved by the operations manager without owner review.
- Key result: written quoting guide approved and used by all estimators by April 30.
Notice that every key result can be checked from a record. If you cannot say where the number comes from, rewrite it.
Scoring OKRs honestly
Score each key result from 0.0 to 1.0 at the end of the quarter, and average them for the objective. A score around 0.7 on a stretch key result is a good quarter, not a failure.
A simple rule keeps scoring consistent:
| Score | Meaning |
|---|---|
| 1.0 | Fully achieved or exceeded |
| 0.7 | Most of the way; the change is clearly happening |
| 0.4 | Real progress, but well short |
| 0.0 | No meaningful movement |
If 250 of 300 agreements were signed, that key result scores about 0.8. If every key result scores 1.0 every quarter, your targets are too safe. If most score below 0.3, the objectives were wishful or the team had no capacity, and the quarterly review should ask which.
Building a ten-measure KPI scorecard
A scorecard of about ten measures, each with one owner, a target and a review frequency, is enough to run most owner-led companies. More than fifteen, and the meeting turns into reading numbers aloud.
A sample layout for [Company]:
| Measure | Type | Owner | Target | Reviewed |
|---|---|---|---|---|
| Revenue vs budget | Lagging | Owner | 100% of month budget | Monthly |
| Gross margin, project work | Lagging | Operations manager | 28% | Monthly |
| Gross margin, recurring | Lagging | Service manager | 45% | Monthly |
| Active service agreements | Lagging | Service manager | 2,000 by year-end | Monthly |
| Quotes issued | Leading | Sales lead | 111 per month | Weekly |
| Quote close rate | Leading | Sales lead | 30% | Monthly |
| Jobs completed on first visit | Leading | Operations manager | 85% | Weekly |
| Overhead vs budget | Lagging | Finance lead | 100% or under | Monthly |
| Days sales outstanding | Lagging | Finance lead | 45 days | Monthly |
| Open priority milestones on track | Leading | Owner | 80% | Monthly |
The targets come straight from the annual operating plan, so the scorecard and the budget never disagree. Show each measure with a simple colour: green on or above target, amber within 10%, red beyond that.
Leading versus lagging measures
Lagging measures tell you what already happened; leading measures tell you what is about to happen. A useful scorecard has at least three or four leading measures, or it can only report bad news after it is too late.
Revenue, margin and cash are lagging. By the time revenue misses, the quotes that would have produced it were missed two months earlier. Quotes issued, close rate and first-visit completion are leading: they move before revenue does, and a manager can act on them this week. When you add a measure, ask what earlier number predicts it, and consider tracking that instead or as well.
One owner per number
Every measure needs exactly one named person who explains it at the review. Shared ownership feels collaborative and works badly.
The owner is not necessarily the person who does all the work; they are the person who knows why the number moved and proposes what to do. In a small company, the owner of the business may hold three or four measures at first. That is fine, as long as part of the plan is moving some of them to managers over the year.
Running the first quarter
The first quarter with OKRs and a scorecard is mostly about building the habit of updating and reading the numbers. Expect it to feel clumsy, and keep the process light enough that nobody dreads it.
A simple routine for the first 13 weeks:
- Week 0: publish the scorecard with definitions and the quarter's OKRs on one shared page.
- Every Monday: each owner updates their weekly measures by 10:00.
- Weekly leadership meeting: fifteen minutes on the scorecard, discussing only amber and red.
- End of each month: owners update monthly measures and add a one-sentence comment on each key result.
- Week 13: score the OKRs, then take the results into the quarterly review and draft the next quarter's set.
Resist the temptation to add measures during the first quarter. Write suggestions on a list and decide on them at the review, when you can see which numbers people actually used.
Linking pay, recognition and the scorecard
Recognition helps a scorecard take root, but direct pay links to OKR scores usually backfire. Keep the scorecard as a management tool first.
If you already pay bonuses on company results, it is reasonable to base them on a small number of lagging scorecard measures, such as annual operating profit against budget, because those are harder to game. Quarterly OKRs work better as a shared language for priorities, discussed openly, with stretch encouraged. Any change to compensation should be designed with your accountant or HR adviser.
Mistakes that make scorecards useless
The common failures are easy to spot once you know them. Check your draft against these before you launch it.
- Measuring what is easy rather than what matters. Website visits are easy; first-visit completion matters more to most service firms.
- No definitions. Write down exactly how each number is calculated and where it comes from.
- Targets with no source. Every target should trace back to the budget or the plan.
- OKRs that are really to-do lists. "Launch the new quoting tool" is a task; "80% of quotes approved without owner review" is a result.
- Never retiring anything. Review the scorecard once a year and drop measures nobody acts on.
Getting help with your scorecard
StrategyPlanning.ca is a Canadian business consulting service in the Sedighi.ca and SAZ.ca group, based in Vancouver and led by Ali Sedighi, MBA. We write OKRs and a KPI scorecard with your leadership team and set up the review rhythm, online by video or in person. See the pricing page for how this work is scoped, or the results page for how we measure our own work. Call or text (604) 632-4959, or email us; a short text is a fine way to begin.
Frequently asked questions
Do we need both OKRs and KPIs?
Most owner-led companies benefit from both, kept small. The scorecard of about ten KPIs runs all year; two or three OKRs per quarter focus attention on the changes the strategic plan calls for.
How many key results should each objective have?
Two to four. One key result is usually a task in disguise, and more than four means the objective is too broad to steer.
Should OKR scores affect bonuses?
We advise against tying OKR scores directly to pay. Once scores drive bonuses, people set safe targets and the stretch disappears. Compensation design is your decision, ideally with your accountant or HR adviser.
What software do we need?
A shared spreadsheet is enough for most companies in the first year. Choose software later, once the habit of updating and reviewing the numbers is established.