Key Results quantify the Objective with 3-4 verifiable metrics which measure change.
So many people get caught up trying to understand the difference between KPIs and Key Results. Let’s try and keep it simple. Look, there are a bazillion different ways to indicate and measure performance in a business. In the world of OKRs though it’s all about change. Out of the 8 million different things you can work on, what are the areas you really want to focus on and change as a business? Some of these will surface naturally, like revenue (increase in change) and retention (decrease in change). Others may require a bit more discovery such as a proposal-to-win rate (increase) or customer response time (decrease).
Discuss, debate, and determine
When crafting your OKRs, it’s a conversation more than anything. Discuss, debate, and determine the right Objectives and pair them with the right Key Results, ideally no more than three or four. Really try and quantify successful achievement of the Objective. It may be a bit subjective, but the exercise will help to crystalize your OKRs.
Pair quality, quantity, and health
Putting an emphasis on quantifying an Objective is hard, but when you look at it through the lens of quality, quantity, and health, it gets much easier! Think about it.
Objective: Successfully enter a new market segment and dominate
- Acquire 1,000 new logos (quantity),
- 80% of new logos fit the Ideal Customer Profile (quality),
- Increase customer retention to 95% (health)
In this generic example, you are pretty well covered because if you hit the first two Key Results, but the existing customer base suffers, then you haven’t “successfully” entered a new market. That one word is very critical as it encapsulates the broader business while still including the primary Objective.
With Key Results, having that third health-focused Key Result is more holistic in nature. It truly quantifies the Objective completely. If all three of these Key Results are hit, chances are you have successfully achieved your Objective.
Measure. Measure. Measure.
Don’t include Key Results where you don’t have data your can reference. Baseline the data first, then determine your goals. Have your starting value, even if it’s just 0. Have a target value, even if you don’t know if you’ll get there. And most definitely always know where you stand today.
The example we like to give is a weight scale. As long as you know where you were, where you are going, and where you are today, you’ll always know where you stand. One-off binary measurements or to-do lists don’t work for Key Results because they lock you in. The measurable over-time component enables you to see progress in real-time and know if you are making change.
It’s often the little things that make a big impact. “Diffusion of responsibility” is a sociopsychological phenomenon whereby a person is less likely to take responsibility for action or inaction when other bystanders or witnesses are present (source). It’s why we only allow one singular owner of any OKR item, and it can’t be a team. By determining who is the singular responsible individual upfront, the chances of achievement are drastically improved.
Key Results are Influenced, Not Controlled
If you can write down 3-4 Key Results and complete them by the end of the day or week, those aren’t Key Results. Control comes with Initiatives, influence comes with Key Results. You can’t make a customer sign a contract or write you a check, those are outcomes (decisions) that are outside of your control. You can’t force your employees to like their jobs or join your company, those are also outcomes that can’t be controlled. Where you have control is with the Initiatives. What are you actually doing to influence change?
Outcomes are defined as behavioral change that drives business results. These are the best Key Results, and ideally, they are leading indicators - conversion, adoption, and engagement. Lagging indicators or more broad business impact come down the line.