27.9.2019 | Growth, Knowledge, KPI's, Reporting
Most modern literature refers to just OKRs (https://www.perdoo.com/the-ultimate-okr-guide/) but I prefer adding Goals to it as well – as Microsoft did back in the 90´s. You need to have defined a clear Goal first before Objectives makes sense. Anyway, the operational stuff is captured in the OKRs (without the G) so no need to split hair on semantics, both work.
The power of the OKR driven operation is explained well in (https://www.amazon.com/Measure-What-Matters-Google-Foundation/dp/0525536221). If you google “measure what matters” you find a lot of material, Youtube videos etc to give you a crash course. Though the examples in the book are very big companies, the method works well for startups as well. Actually they may be even more critical for a startup, as “what matters” is dependant on the stage of the J Curve you are at. As you make progress, “what matters” should change. The thing to drive your everyday activity is the Key Result. The name is a bit misleading, it should rather be “Key Activity”, but this is the standard term so we stick with it.
15.9.2019 | MVIR, Reporting
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.
