Why You Should Use OKRs (Objectives Key Results) With Your KPIs
At best, adding modern “Objectives and Key Results” (OKRs) to your KPIs could be the difference between stagnation and growth. At worst, it can promote a healthier, more proactive work culture and bring more focused business outcomes.
In this guide, you’re going to learn why that is — and all without so much as a mention of ‘the new normal’ or ‘unprecedented times’ (except this once).
There’s a first time for everything — this is probably the first time you’ll see a Dylan quote in a marketing guide. Makes a nice change from a randomly selected statistic, at least.
“You better start swimmin’, or you’ll sink like a stone for the times they are a-changin’.”
— Bob Dylan
Despite 2020 having gone down as a year in which many of us failed to see eye-to-eye on most things, we’ll struggle to disagree that times, they are indeed a-changin’,and the savviest amongst you are changing with them.
Needless to say, when Dylan wrote these lyrics, he wasn’t talking about a pandemic, or OKRs, though he was talking about the need to adapt and innovate and OKRs are possibly the easiest and most impactful innovation you can make right now, pound-for-pound.
If you’ve heard of OKRs, we commend you. If you haven’t, don’t be too hard on yourself — for an operations tweak with such profound potential, OKRs have managed to remain surprisingly inconspicuous.
Going Further Than Just KPIs
If you ask The Business Dictionary what the business definition of ‘innovation’ is, it’ll tell you:
“To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products.”
‘Replicable at an economic cost’?
‘Satisfy a specific need’?
‘Application of information, imagination, and initiative’?
‘Deriving greater or different values from resources’?
Sounds just like the things many business owners could do with right now. It also happens to sound plum like the very definition of what OKRs actually are and do.
OKRs vs KPIs: Key Differences
KPIs
As a universal go-to, KPIs barely need introducing having been around, seemingly, since the dawn of time. The story of their origin is a long and boring one that you can read about in this Wikipedia entry.
To go through the motions, KPI stands for ‘key performance indicator’ as a measure of past progress to predetermined performance targets. We all knew that.
OKRs
Much newer on the scene OKRs stand for ‘objective key results’ — and there’s your first clue as to why OKRs should have more clout than KPIs.
They are more adept at integrating qualitative project-wide, department-wide and company-wide incentives into unified workstreams that drives tangible progress in areas KPIs struggle to cater for.
The core difference is that KPIs measure only past performance in a quantitative way whereas OKRs measure progress toward qualitative future goals, breaking those goals down into smaller, more manageable ‘work packets’ that are more transparently shared between individuals and teams.
Here’s the lo-down on KPIs vs OKRs side-by-side:
These are a little more ‘feet-on-the-ground’ and should be written in such a way that they’re realistically 100% achievable.Tangible OKRs are administered bottom-up as an HR activity, rather than as managerial top-down directive like KPIs.
Different types of OKRs
Before writing strong OKRs, you need to realise that OKRs, if badly written, can degrade into KPIs. The key is to be absolutely clear on what you want to achieve and select the right OKR for the job.
Aspirational OKRs (the ‘moonshot’)
These are overarching, highly ambitious OKRs that might not even be achieved. Though they’re still worth writing — even as hard-to-reach golden carrots that sit tantalisingly on your business horizon.
The point of setting aspirational OKRs is to maintain top-line end goals, however ludicrous, that ultimately stimulate individuals and teams to ensure their actions and drives remain on-point, productive and effective.
Tangible OKRs (the ‘roof shot’)
Collaboration with teams and individuals is key, and team members should have very active inputs in helping define their team OKRs and the individual ‘work packets’ that are individually administered and completed as itemised actions that build toward the top-line, tangible OKR.
Pretty straight forward so far. If you’re clear on what KPIs are, it’s time to get down to writing them.
How to Write Strong OKRs
Powerful OKRs are tricky to write.
The first thing you’ll want to be wary of is slipping into ‘KPI mode’ when you’re writing OKRs. The approach and mindset is completely different so it’s critical that you scrutinise your freshly-written OKRs to ensure they’re more than just more metrics of activities on a dashboard or a graph.
Make sure that..
- They’re ambitious enough and relevant to your business goals.
- They don’t promote redundancy and useless activities
- They can be broken down into smaller, itemised ‘work packets’.
A loose template for setting iron-clad OKRs looks something like this…
I will…(insert objective), as measured by (insert key result), and achieved by (insert initiatives, actions and ‘work packets’)
To flesh that out and add some meat to the bones, have a peek at these examples and, in your mind, or on paper, think of ‘Os’, ‘KRs’ and example initiatives that you can apply to each column that relate to your own current situation and goals.
Those coming across OKRs for the first time will do well to seriously consider rolling them out. Without doubt they provide a firm rudder, when combined with KPIs, that will help keep the ship on a steady course through the troubled waters of the months ahead of us.
If your new OKRs will include implementing actions like reviewing and optimising digital marketing, website user experience and site speed, we’re pretty handy with all those things — get in our ear about it and we’ll talk over how we can bring serious clout to your website and inbound strategy — doesn’t have to be a Zoom call.
Good luck with those OKRs, and thanks for reading.
