full
Logically Using KPIs and Key Results
Learn how to decipher the differences between KPIs from Key Results in a logical way.
Transcript
Do we dare attempt the KPI ?
KJ:Let's definitely cover it. Yeah.
Stephen N.:Okay. What? How do KPIs factor into all this stuff?
KJ:Well, KPIs are key performance indicators, and they
KJ:do exactly that. They're a numeric value that indicates
KJ:your progress or your your effort that you've exerted and
KJ:your performance, their performance. Yeah, but they, but
KJ:the subtleness between a KPI and a key result is this, every key
KJ:result should be a KPI. But not every KPI needs to be a key
KJ:result. So it's the environment in which you decide your key
KJ:results. As we said earlier, they're both the same thing.
KJ:They both indicate performance. But an OKR is designed to
KJ:identify an area that perhaps needs improvement, or that with
KJ:a touch of ambition can be brought further, you know,
KJ:grown, so you're trying to basically. So key results are
KJ:really just you identify the KPIs that are already in place,
KJ:and which ones are at risk. Those are the ones you select to
KJ:be key results are the ones that you want to improve, or the ones
KJ:that you want to improve. Exactly. Yeah. So
Stephen N.:like, you could log into Google Analytics, for
Stephen N.:example. And there's a treasure trove of data. I mean, you can
Stephen N.:slice and dice this stuff. And you can get down to as granular
Stephen N.:as I want to see everybody in Zimbabwe using Google Chrome on
Stephen N.:a mobile device. Yeah, like, that's a KPI. Yeah. Now, whether
Stephen N.:you want to increase that by 100%, if that's what you really
Stephen N.:want to focus on Zimbabwe is your jam, then that's a great
Stephen N.:key result. Because it's super specific. But more than likely,
Stephen N.:that's not something that you need to measure or improve. But
Stephen N.:it's that, like, I'm gonna, I think I'm just gonna make some
Stephen N.:bumper stickers that with what you said, you know, every key
Stephen N.:result is a KPI. But not every KPI is a key result. That's it.
Stephen N.:That's the metric. Yeah. And so a lot of this stuff kind of gets
Stephen N.:ambiguous, because there's plenty of like data
Stephen N.:visualization companies out there that say, Well, I got
Stephen N.:Tableau or Geckoboard. And I can build all these widgets, and I
Stephen N.:can create these really fancy dashboards and I can just have a
Stephen N.:real time view of of my business. It doesn't matter. No,
Stephen N.:it doesn't matter. I we could do that. Now. We you know, it
Stephen N.:doesn't matter if nobody's actually moving something
Stephen N.:towards that number. And focusing on that number. And if
Stephen N.:everybody's aware that that's the priority, like, and you're
Stephen N.:you're getting those dopamine hits, watching progress and
Stephen N.:watching the number go up. Like, if you don't have that, then you
Stephen N.:just have a dashboard.
KJ:Yep, exactly. So really, that's it to summarize key
KJ:results and KPIs. They are both numeric values that represent
KJ:performance. And, in your example, there are all these
KJ:numeric exact metrics, they're all lined out on a table, and
KJ:you call them all KPIs. But when you decide to select very
KJ:particular ones, in order to improve them with the sense of
KJ:ambition, and drive that selection process, to bring them
KJ:into an OKR. That's the process of converting them to a key
KJ:result. Now they are key results, because you've decided
KJ:out of 50 of these measurable things. I'm choosing this one or
KJ:this these two, they're the key key results.
Stephen N.:Yep. There's still a couple little things. I don't
Stephen N.:think we really touched on objectives, writing objectives.
Stephen N.:This. This is not as complicated I would say, as, you know,
Stephen N.:identifying your key results, but it's an important one. We
Stephen N.:talked about not including metrics in your objectives, you
Stephen N.:don't want to kind of that that's what the purpose is. The
Stephen N.:key result is to contain the metric the the objective is to
Stephen N.:give direction, motivation, clear vision of what you're
Stephen N.:trying to achieve what the focus is, it's we're trying to build
Stephen N.:the world's greatest OKR company. We're trying To be the
Stephen N.:best place to work for our employees, we're trying to
Stephen N.:delight customers continuously. We're trying to do whatever
Stephen N.:right, it's like, this is the motivation, the inspiration, the
Stephen N.:direction that we're trying to go. And that's, you know,
Stephen N.:important to put to paper and start to talk about and sort of
Stephen N.:break that down. Yeah. If you have any other thoughts on
Stephen N.:better objectives?
KJ:No, I think you summarized it perfectly. And beautifully. I
KJ:think the only thing I'd add is this some tips. writing
KJ:objectives is your opportunity, as a team, and as a leader of
KJ:the team, maybe, to think broadly, to step back, not be so
KJ:narrowly focused on this is the metric we have to get from this
KJ:to this, that will come later, this is your opportunity to
KJ:really be creative, reflect on past, you know, performance,
KJ:consider what is really compelling, everyone to act with
KJ:a sense of urgency, what will really benefit other people,
KJ:what will benefit our customers, what will motivate us here, as
KJ:individuals on the team, these are things that you really need
KJ:to discuss at length, and because if you just decide,
KJ:well, this is our objective, guys, I'll have no more to say
KJ:about it. It immediately negate the gates, the whole purpose of
KJ:it, because it's not memorable, it's not motivating. And it
KJ:really isn't anything to strive towards. So you want those
KJ:components needs to inspire you, and you need to remember it. And
KJ:so think broadly about, you know, have a good debate about
KJ:it. And another quick tip is just, you know, maybe use an
KJ:action word in, you know, become the world's best thing or, you
KJ:know, build a greater product or delight. Our customers, you
KJ:know, something, something like that short, sweet, and maybe
KJ:some action oriented in this in there, that people can just look
KJ:at every week, every month, every quarter, whatever and go,
KJ:Yeah, I like that. I could strive towards that.
Stephen N.:Yeah, it's your priorities. What are your
Stephen N.:priorities? You know, do you want to know your priorities,
Stephen N.:open up a checkbook, that's, you know, where are you spending
Stephen N.:your money and your priorities, you know, as a business, what,
Stephen N.:probably half your priorities are your people, that's probably
Stephen N.:where half your money goes, if not more, probably more. So
Stephen N.:like, that's a big priority, like taking care of your people,
Stephen N.:like spending tons of money building product, in maintaining
Stephen N.:product for your customers, like that's a priority, right, you
Stephen N.:got to make sure that that's surface, the top, you know,
Stephen N.:ensuring that the business is healthy, and producing money and
Stephen N.:generating revenue, and isn't burning cash like that the
Stephen N.:health of the business is a priority, like, these are the
Stephen N.:big priorities, and they got to be surfaced. And it's, it
Stephen N.:doesn't have to be unique to everybody, everybody's gonna
Stephen N.:have their nuances, but that's really it. It's like keep, keep
Stephen N.:your people happy, keep your customers happy and keep the
Stephen N.:business happy. You do that. Like the things below the
Stephen N.:surface, you'll figure out where you want to improve, where you
Stephen N.:think you can improve, those are your assumptions, your
Stephen N.:hypothesis, different metrics, that you have to move the needle
Stephen N.:on like that, you can do that. But you know, breaking those
Stephen N.:down in terms of priority is huge. I think the last bit here,
Stephen N.:though, that we did, we kind of touched on a little bit. And I
Stephen N.:think this will probably wrap us up. But we talked, you know, we
Stephen N.:made fun of a lot of the examples, you know, do five
Stephen N.:things that's just output or, you know, complete the project.
Stephen N.:It's at 80%, or 60%, or whatever. But really putting
Stephen N.:these different types of actions in the right bucket, using the
Stephen N.:logic model, I don't know if maybe you want to touch on that
Stephen N.:how to distinguish logically, you know, what, what would be a
Stephen N.:good key result, which is an outcome or an impact metric?
Stephen N.:Versus just, you know, tasks, actions, deliverables, output,
Stephen N.:hiring, what are what are some ways to kind of structure your
Stephen N.:thinking when you're trying to come up with these different
Stephen N.:ways of measurement?
KJ:Now, it's great the logic model actually discovered I
KJ:never knew it manifested or was originally came to came to light
KJ:from an article WK Kellogg, no sort of performance management
KJ:sort of article, but it's, yeah, it's a great model. It
KJ:visualizes linear progression of you know, the relationship
KJ:between your planned work and your intended results. So your
KJ:planned work? Is your, your resources? No, that includes
KJ:humans financial, organizational, you know,
KJ:technology, capital, and then your activities, which is what
KJ:you're going to do. And that's your planned work, what am I
KJ:actually going to do the processes, the events,
KJ:everything you're going to create. And then that all leads
KJ:to outputs, which are, you know, the byproduct of the activities,
KJ:what you produce. And then those are related to outcomes. And
KJ:outcomes are how you change your one's behavior with the output,
KJ:you know, if I, I am attempting to do all this activity, so that
KJ:I can produce x volume of this feature or whatever, and then in
KJ:an attempt to change the user's behavior, and finally, impact if
KJ:we change someone's behavior significantly enough, we make a
KJ:greater financial, economic movement or impact. So I think
KJ:what would help if you tried to describe it in shorter way, and
KJ:used a better example, maybe or a exam?
Stephen N.:No, I think he did well, and explained it nicely. I
Stephen N.:think it's really I mean, there's, there's a lot of, I
Stephen N.:mean, you could look up the impact, or the logic model. And
Stephen N.:you can see that a lot of this is related to, like child
Stephen N.:psychology and child development and learning programs and just
Stephen N.:how to actually drive change. But it starts with resources,
Stephen N.:like it starts with your people starts with time, technology,
Stephen N.:money, that's where it starts, you got it, you can't do
Stephen N.:anything without the resources. Like that. That is, that is,
Stephen N.:like, logically, the first place, you can't build a super
Stephen N.:profitable business without people. Yeah, and time, and
Stephen N.:resources and money. Right. And, and even if you get all that
Stephen N.:stuff, you got great people and you got tons of money, you got
Stephen N.:plenty of time. If you're not working on the right things,
Stephen N.:you're not creating the right things. It doesn't matter. We
Stephen N.:raised money, we got great people, if every day, we just
Stephen N.:sat down and watched YouTube videos, that was our activities,
Stephen N.:we would quickly burn through our resources. But all this
Stephen N.:stuff leads to outcomes and impact. And I think
Stephen N.:understanding these is really critical, because they make
Stephen N.:number one, they make fantastic key results, because they are
Stephen N.:things that you can measure an influence over time. Short term
Stephen N.:outcomes are really about learning an action, right? Like,
Stephen N.:is is my are my customers aware of my products? How do they feel
Stephen N.:about my products? How are my employees satisfied with working
Stephen N.:here, like learning information about people and customers and
Stephen N.:your business? And, and putting those as outcomes is a great
Stephen N.:place to start the short term? You know, medium term, it's
Stephen N.:behaviors, its policies, its decision making? Like do I want
Stephen N.:to be a customer? Yes, no. Right? Like, those decisions and
Stephen N.:action and changes, like the measurable change. Those are
Stephen N.:great, great key results. And then really the the long term
Stephen N.:outcomes or the the impactful outcomes. And those are related
Stephen N.:to like you said, it's change in economics, you know, situations,
Stephen N.:it's environmental change, social change, things that just
Stephen N.:don't happen overnight. They take a long time, it takes like
Stephen N.:a year, right? Like the the impact your financial impact
Stephen N.:doesn't come about on December 31. Like, like the how much
Stephen N.:money made for the year doesn't happen on the last day of the
Stephen N.:year. It's a collection of all the things that you did. This is
Stephen N.:obviously not very logical, but it's the collection of all the
Stephen N.:things that you did throughout the course of the year that
Stephen N.:determines, did you hit your number? Did you not hit your
Stephen N.:number, right? And so like, now we're going into this, like, new
Stephen N.:era, whatever you want to call it, where we're trying to do
Stephen N.:these really big changes for like our planet, climate change,
Stephen N.:or God doers, writing books, you know, with plans in it, like,
Stephen N.:that stuff's gonna take a long time. And but if you can measure
Stephen N.:it, and you can see the Moodle, Moodle, the needle moving, you
Stephen N.:can, you know, start a movement. And so those outcomes are
Stephen N.:critical. And that's the logic model and it's a great way to
Stephen N.:frame any business.
KJ:Well, I tell you, yeah, dad, right. Great way to and you
KJ:know, what I'd say to everyone listening is go into our
KJ:Knowledge Center, we have, you know, downloadable playbooks and
KJ:worksheets where you You can see the logic model and see some
KJ:examples of it. And I tell you why it's just just try it out as
KJ:an experiment doesn't take long. I did, I really came to this was
KJ:really sort of insightful when I discovered it. It's not so much
KJ:the model itself, that's impactful and helpful. It's the
KJ:clarity of thinking, that occurs when you create the model and
KJ:put it in through your perspective, through your life
KJ:and your business. That clarity of thinking is the benefit of
KJ:the model. It's not the model itself, or wherever you go,
KJ:it's, it's about actually creating it, modifying it, going
KJ:through the process of putting it into your perspective. That's
KJ:where you, you suddenly have all these epiphanies of like, Oh, my
KJ:God, we haven't been getting this outcome. Because we haven't
KJ:been doing enough resources, you know, we need a resource plan,
KJ:we need add capacity there. And what activities why are we doing
KJ:this many we should do those. So it's all the value comes from
KJ:just that process of doing it.
Stephen N.:Yeah, and we this is our simplified version, there's
Stephen N.:actually more complex visualizations of the logic
Stephen N.:model, but we kind of broke it down into three pieces. But to
Stephen N.:add on just one other minor detail, it all starts with a
Stephen N.:hypothesis. And it's an assumption, right? That's what
Stephen N.:it starts with. And to use a business example, every investor
Stephen N.:that invest into a company has an assumption and a hypothesis.
Stephen N.:And the first thing he's trying to figure out is, do these
Stephen N.:jokers know what they're doing? And if I give them, you know,
Stephen N.:resources, my capital, if I do that, in the long term, will
Stephen N.:there be an economic impact? Now, the benefit of the investor
Stephen N.:is they don't have to go off and find the resources. They don't
Stephen N.:have to do any of the activities. They don't have to
Stephen N.:drive any of the outcomes. They get to skip all that. Yeah, they
Stephen N.:go right to the economic impact. Yeah, now, they might be a
Stephen N.:little stressed along the way, because they can't control and
Stephen N.:influence things. But really, that's it, it's like, they have
Stephen N.:an assumption. And they make a decision, and they give
Stephen N.:resources and that the end goal is an economic impact. Or maybe
Stephen N.:they just want to do it for the betterment of society by
Stephen N.:donating money, and they just don't really care about getting
Stephen N.:money back. But like, from a company perspective, like we've
Stephen N.:had an assumption that there isn't a market here, that we can
Stephen N.:build product that we can serve customers like we like none of
Stephen N.:this is guaranteed, no matter how good you are. And, and so to
Stephen N.:do that, we needed resources. And now we got it. Now we're
Stephen N.:trying to build and produce stuff. And then getting in front
Stephen N.:of people, and letting them validate our assumptions. And
Stephen N.:then going back and saying, Alright, well, we got to do
Stephen N.:other stuff. And then going back and seeing what those like those
Stephen N.:outcomes are. And if you do all that stuff, right, and you're
Stephen N.:continuously learning, you'll get over time to a long term
Stephen N.:impact for yourself, your business, or even, you know, the
Stephen N.:society and culture around you.
KJ:Fantastic. Well said, That's great example, you know, and so
KJ:definitely, everyone go out and check out the logic model and
KJ:just try it out with your team, you know, your company, you and
KJ:as an individual, it's worth worthwhile. It's good exercise.
Stephen N.:Good. And the stuff that you described though, is
Stephen N.:only that's only for customers. Only customers can log in and
Stephen N.:download some of this stuff, right? We don't have public
Stephen N.:facing Okay, so not everybody is going to be a customer when they
Stephen N.:hear this. Maybe they could be
KJ:or they shouldn't be then a third assumption. What you got
KJ:to do the customer you get all this great shit.
Stephen N.:Angel hater kJ. All right, good stuff. Well, I think
Stephen N.:we went a little long on that one. Yeah, my
KJ:fucking legs are killing me. Oh, you're standing up. Standing
KJ:up since nine. Ah. I've had these people do you know?
Stephen N.:I've been I've been sitting all day. I just probably
