How to use OKRs to measure what matters

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In Why OKRs outclass regular goals, I explained why OKRs are such a powerful way to structure your goals: they help you identify what really matters. In Outcomes vs outputs, I emphasized the importance of having Key Results that measure outcomes, because outcomes—not outputs—are usually the things that matter.

These articles have sparked much debate, but the importance of outcomes seems to be widely embraced nowadays. Nonetheless, many people still struggle to understand what good Key Results are, and why measuring outcomes is so important. I’ll try to answer this question once and for all.

First things first: the role of Key Results

The most important role of Key Results is that they force you to specify what you mean by a particular Objective. If you have an Objective to learn Italian, then ‘learning Italian’ will mean different things to different people. Key Results enable you to specify what it means to you. They answer the question: what needs to happen in order to successfully achieve the Objective?

In other words: Key Results help you identify what really matters.

‘What matters’ is never a means to an end

When you set yourself the Objective of learning Italian, most people start thinking about all the things they could or should do to learn that language. You could listen to an Italian podcast every day, watch a TV show in Italian, or complete an Italian language course. Because these are the first things that come to mind, it’s very tempting to add those as your Key Results—which is also what most people would do.

It’s tempting to think these are good Key Results because there seems to be a clear relationship between these tasks and your Objective. You can easily see how listening to a podcast and completing an Italian language course would help you realize your Objective of learning Italian. However, for most people, all these tasks are actually a means to an end (“something that is not valued or important in itself but is useful in achieving an aim”).

Imagine you’ve listened to an Italian podcast for 30 days in a row and you’ve completed an Italian language course, but when on holiday in Italy you still cannot order a pizza in Italian. Would you consider yourself successful? Would you say that you speak Italian now? Probably not.

That what really matters to you is almost never a means to an end. What you really care about is the end itself. So you have to make sure that each Key Result is never a means to an end, but an end itself.

‘What matters’ is subjective

I’ve set myself the Objective to learn Italian a little while ago. What that means to me is simple: be able to have a 10 minute conversation with my Italian family.

Only when I’m able to do that, will I say that I’ve successfully learned the Italian language. I don’t care about listening to an Italian podcast, it’s just a means to an end for me.

This could be different for you. What matters to you may not be what matters to me. If you would also like to learn Italian, and you’d consider yourself successful once you’ve listened to 30 Italian podcasts, then who am I to say that that is not a good Key Result? You would leave me wondering why your Objective is to “learn Italian” and not “spend countless hours listening to an Italian podcast”, but that’s fine .

The point is, ‘what matters’ is highly subjective, so only you can say if something is a good Key Result or not. (Just make sure they’re not a means to an end.)

What matters depends on your (true) Objective

To successfully identify what matters, you need to start with your Objective. The challenge here is that your true Objective may not always be clear at the beginning.

Example: launch a new website

I was consulting a company in Berlin not too long ago. Their Marketing team had created an Objective to launch a new website. Their Key Results were things like (i) create a new design, (ii) find a website developer, and (iii) release the new website.

As you can see, all the Key Results are tasks, outputs, things that they needed to do in order to launch the new website. It’s definitely important to keep track of such activities, which is why we allow you to track those as well in Perdoo (read how).

Were these good Key Results? Looking at the Objective, you could say that the Objective would be achieved when all these “Key Results” were completed. So I asked the team if they would consider themselves successful when all these “Key Results” have been done. “Yes” was the answer.

Then I asked what they were actually expecting from this new website. The Marketing Manager responded: “It should appeal to our target audience better, so we expect a higher conversion rate and more leads that will be accepted by our Sales team”. That made it clear that the true Objective wasn’t to launch a new website, but to launch a higher-converting website that attracts more high quality leads. The team agreed that that was a better way to name the Objective.

I asked them to look at the Key Results again and evaluate whether these Key Results were still good measures of success. Obviously, everyone disagreed. Now that we knew our true Objective, it was easy to create Key Results that were measuring the things that really mattered: improve (i) visitor-to-lead conversion rate, and (ii) percentage of leads that is accepted by Sales.

As you can see, being able to successfully identify what matters depends on the Objective.

Start with a good Objective (i.e. an Objective that is a meaningful step forward for you or your organization) and your Key Results will naturally measure outcomes.

The benefit of measuring outcomes

Imagine Team A that works on the Before OKR, and Team B that works on the After OKR.

Team A will just be driven by activities (outputs). They’ll have zero insight into how their new website is performing. For all they know it could actually worsen conversion.

Team B will be driven by results (outcomes). They’ll be able to see if the new website is actually driving value for the business. The OKR enables them to iterate and tweak until they achieve the results they desire.

I’d find it much more exciting to work on the After OKR. I’d like to see that what I do is actually making a difference. As an investor, I’d also place my bets on the organization that is focusing on results. The activity driven organization might be lucky and launch a website with amazing conversion rates. And they might be lucky again. But building successful businesses does not depend on luck. Team B has a system in place that will lead to success, time and time again.

Conclusion

To most people, the things that they’ll do (e.g. completing an Italian language course) are not what really matters to them. They do these things, in order to achieve a certain (key) result, such as the ability to have a conversation in Italian.

You have to figure out what really matters to you, and make sure that what matters is accurately reflected in the Key Results for your Objective. Successfully identifying what matters most, starts with understanding what your true Objective is.

To most people, and to all businesses, what matters—in the end—are results.

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