Setting the right Key Results
The context is GOKR (Goals, Objective, Key Results) – see another article to explain that.
Note that “Key Result” is a bit misleading of a term, “Key Activity” would be more descriptive but this is the standard term so we stick with it.
Traditional KPIs are looking into the history and state what has already happened. Revenue (like MRR) for instance – “the MRR for last month was X”. Of course most businesses would want their MRR to grow. But how is focusing on the MRR figure itself helping you to increase it?
Also, instead of just knowing what the MRR was for last month, wouldn’t you rather know what it is likely to be in 3 months time? I.e. you should have predictive indicators, not history based.
A real life parallel: if your objective is to lose weight, how does staring at the numbers on the scale every morning help you make the number smaller?
That alone won’t do anything. It’s the ACTIVITIES you do between reading the scale that may help you reduce the number. So the key thing to focus on are the activities. The numbers are a direct consequence of them – do the activity, the result will follow. Exercise more, eat less – weight will drop, do the things that drive the sales for you – and the MRR will grow.
“Key Result” is the activity that has a direct correlation with the end result. If you know what you need to do to move the needle, you set yourself a goal to do that and you measure your activity so that you have really done it – the desired end result will follow, automatically. You lost weight, won more MRR.
But identifying the real Key Result (=activity, remember the misleading term) is not always easy. But if you understand how your engine of business is working, and you know what lever is connected to what end result, you can do it. If this feels too hard, you may not yet quite understand the engine of your business. You cannot succeed unless you do, so make it a priority to study it so that you will master it, inside out.