Most organizations spend a lot of time, energy, and bills on designing high-impact strategic programs. They initiate projects that focus on streamlining company processes and operations while building a culture of experimentation and innovation. Undeniably, the main commitments of leadership teams include planning the steps that will take their business to the next level.
However, more often than not, there is a critical link missing post the activity of designing the strategic elements. Most companies and leaders miss this critical aspect: How would they measure the achievement of their strategic goals?
Getting stuck with revenue numbers or cost factors doesn’t just save the day. You need to get into the details because as we all know, ‘the devil lies in the details,’ right? Also, getting into the details helps you craft your strategic priorities in a way that your next-level teams understand, comprehend, and most importantly, EXECUTE.
Why is the ‘execute’ in uppercase? Because strategy without execution is nothing but a hallucination! Boardrooms cannot thrive with hallucinations on their balance sheets.
Now, let’s think about the last time you wrote down your goals. Your infatuation would most likely be to pick up the usual suspects that we normally do not measure: revenues, gross margins, operational efficiency, costs, churn’ and more. You may spend a lot of time reviewing your Lag metrics. Here’s a surprise – the magic really lies in keeping a hawk-eye on your lead indicators!
If you would like to know what tide you are up against…
Here’s how lead and lag indicators differ.
They move as a result of many other metrics that need attention. Lag indicators make their way to the ‘Health Card’ of a business and are KPIs that one has been measuring repeatedly.
They help you look at your business proactively and call out warning signs sooner. If the lead indicators are measured and improved, you would most likely overcome your lag.
Naturally, a few questions arise at this stage.
How do you pick these leading and lagging indicators, how do you measure them, and most importantly, how does it really denote progress?
OKRs came about to answer these questions. They are not only a tool for measuring but also picking the metrics which matter to business, those which can be controlled on a regular and real-time basis and while showing you if progress is in the right direction. It’s no surprise that frameworks like OKRs have become popular.
New to OKRs? Here’s a short email course to help you understand everything about the world of OKRs.
OKRs are not written in silos. Since OKR culture creates a fundamental shift from ‘ME’ to ‘WE’, teams come together to pick high-velocity Objectives and KRs. This has a significant impact on business.
Objective statements help answer the question ‘What would you like to accomplish?’
It is important to note that the KRs or Key Results are linked to Objective Statements, so think about ‘how will you get there,’ and list down success metrics, which form your KRs or Key Results.
Here’s a guide to crafting your first OKR.
Truly well-written OKRs are a mix of Lead and Lag metrics. It’s important to think about your Lead metrics, as they have a significant impact on the usual suspect – Lag metrics. Many times the way you achieve your lead metrics becomes a feeder into predicting whether or not you would achieve your lag metrics. Get the connection?
Now, churn is evidently a Lag Indicator. Here are some lead indicators you could use to tame that churn and write your Key Results.
1. Increase Week 1 onboarding engagement from X to Y
2. Reducing Onboarding time from X to Y minutes
3. Increase DAU (daily active usage) from X to Y
4. Increase WAU (weekly active usage) from X to Y
5. Increase NDR (Net Dollar Retention) from X to Y
6. Increase NPS from X to Y
We all love the bucks! But to get to this pot of gold, you need to dodge the leprechaun. The ideal approach to writing OKRs around achieving your revenue metric is to link Key Results around your funnel metrics.
7. Increase pipeline from X to Y
8. Increase organic impression from X to Y
9. Increase new demos per week from X to Y 4.
10. Increase the opportunity-to-win ratio from X to Y
11. Increase MQL to SQLs ratio from X to Y
12. Increase CTA from X to Y%
13. Increase webinar registrations from X to Y
14. Increase podcast downloads from X to Y
15. Increase conference attendance from X to Y
16. Increase impressions on Social Media from X to Y
17. Increase followership from X to Y
18. Increase paid ad conversions from X to Y
19. Increase demos/trials from paid ads from X to Y
Land and Expand is a great strategy for businesses, irrespective of the business model.
20. Increase NDR (Net Dollar Retention ) from X to Y
21. Increase customer pulse check scores from X to Y
22. Increase G2/ Capterra reviews from X to Y
23. Reduce cart drop-off rates from X to Y
24. Increase repeat bookings from X to Y
25. Increase referrals from X to Y
26. Increase community engagement scores from X to Y
27. Increase LTV from X to Y
28. Increase net new sign-ups from X to Y
There’s no right or wrong here. NPS could be a lead or lag indicator, depending upon the frequency of measurement. Assuming it's a lag indicator, here are some lead metrics to get this one right.
29. Increase referrals from X to Y (Happy customers are more likely to refer, Amen!)
30. Increase repeat bookings from X to Y
31. Increase G2/ Capterra/ Google reviews from X to Y
32. Increase client case studies from X to Y (This one could appear ‘task-y,’ however, customer case studies do take immense attention and effort)
33. Reduce customer response time from X to Y
34. Reduce repeat customer queries from X to Y
As they say: happy people, happy company. People truly are the biggest asset. While ESAT is measured by most companies either quarterly, mid or annual, there are a bunch of signs that could indicate a strong or sour courtship with your people.
35. Increase week 1 onboarding engagement from X to Y (a good lead indicator of early churn)
36. Reduce people query TAT from X to Y days
37. Increase actions on findings from surveys from X to Y (this one indicates not only surveys to check on sentiments, but surveys without action can lower future participation as we know)
38. Reduce project allocation time from X to Y days
39. Increase manager: team member touch points from X to Y (you could even measure the quality of the touch points)
40. Reduce candidate interviewing time from X to Y days
41. Increase Glassdoor ratings from X to Y
42. Increase avg participation in employee events from X to Y
43. Increase learning engagement scores from X to Y
44. Increase internal sourcing from X to Y
45. Increase leadership touch points from X to Y
As we all know Gross margin is the Net Sales - Cost of Goods sold. Net Sales could be equivalent to revenue and accommodate any discounts or returns/refunds. Cost of goods sold includes any direct costs associated with the product, and people cost as well.
46. Increase local vendors from X to Y
47. Reduce new product launches in Red from X to Y
48. Reduce avg sales cycle time from X to Y
49. Reduce the cost of customer acquisition from X to Y
50. Increase avg revenue per customer from X to Y
“Execution is the ability to mesh strategy with reality, align people with goals, and achieve the promised results. “
– Lawrence Bossidy
When we have the right set of indicators that tell us if our strategic goals are real, aligned to what the teams work on, and showcase the ‘what’ and ‘how’ of achieving the promised goals, we know our growth story is just about to take off at a speed like never before! Why? Simply because everyone can visualize how their tasks align to the important lead metrics that give a real time indication of being on the right track always!
Ready to write your OKRs? Do check out our Big Book of OKRs Examples to help you and your teams start.
Vidya Santhanam is the Co-Founder of Fitbots OKRs. Having coached 600+ teams, and conducted 1000+ check-in meetings, Vidya likes writing about Metrics, high performance, and leadership.
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