What are (G)OKRs ? - measure what matters

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.

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.