The amount of overwhelming instruction on OKRs is exhausting. So, we will walk you through how to structure a proper OKR, without all the fluff.

Alright, so we're back in the virtual lab talking

about some OKR creation

How to write OKR's that don't suck.

Yeah. Can we just acknowledge how much crappy

information exists? Some of it? We've created ourselves.

Everybody's kind of Yeah. Yeah. Like, I mean, it's a process.

There's so much bad information out there.

Yeah, it's the minute you open your computer. It's like a

wave of garbage flowing into your face. Dead banana skins.

You know? Just crap.

Yeah. And, and it's because you have to fail at this

stuff to actually get it right. It's proven true. I mean, we

started a damn company about it, and we've screwed it up.

Yeah. What's funny, though, is like, the people that don't

acknowledge the screw ups really make me laugh. You know, they're

like, we have it all together. It's like, no, that that means

you have nothing together. We're we're top notch at this stuff.

It's like that. No, you're definitely not then.

Yeah. Well, you know, it's the attempt, though.

You got to start somewhere. Yeah, you gotta be honest with

yourself. I mean, we're being very honest. We're saying. We're

learning as we go and putting things in the right bucket and

labeling things correctly. And measuring correctly. And what's

a key result? What's not a key result? Like it's important, but

once you kind of Once it clicks, it clicks. And then if then the

goal is really getting it to click at scale.

Yeah, yeah. Because the garbage man, outside. They've

come in to collect this podcast,

we're coming to drop off a bunch of key results that

are out on the internet. Yeah. My favorites, just the ones that

are like, I mean, you he could Google up some examples, or

Google some examples, but the ones that just list like, write

five blog posts. Yeah. Schedule for meetings with my colleagues.

Yeah, the vagueness is really great. Yeah.

attend an event. Yeah. That's really

groundbreaking stuff

attempts attempt to get out of bed. Yeah, it's almost

like you know, when you when you like, create a to

do list and the first thing you put on your to do list is create

the to do list. Yeah. And then you check it off. It's like it's

a retroactive dopamine hit that you're trying, you're forcing by

doing something that sets the bar unbelievably low.

Yeah, yeah. But what we should probably say, you know,

is that the let's, let's try to dissect why that happens. And

here's my Terry. I think, why that happens is because OKR is

all about momentum. And you can only build momentum with

confidence. And you build confidence with dopamine hits.

So people know what to do. They love and they're confident in

what they know. So that's immediately what they go to, if

you ask them, like, write a key result, like, Gee, I don't know

what, but what just write down what we should do next quarter,

they go, Oh, well, I think we should improve the onboarding

process and, and create a survey and, you know, interview the

product managers about the survey. And it's like, Oh,

right. So they start immediately listing out all the crap that

they want to do, and they know how to do and they've been

meaning to do it, but they haven't got around to it. That's

immediately what people do. And then they just label them as key

results. This is all the crap, you know. And they're done.

Okay, done. That's my theory. That's my theory about what

happens.

Yeah. I mean, we did it ourselves. We did it. I did

it ourselves.

We were like, We got to create a website. Okay. That's a

key result.

Yeah, we got to integrate the thing. We got to

build the feature. We got to build, you know, build a blog

post. Like we we did it ourselves, which is hilarious.

Yeah. And then we're like, we're great, aren't we? Yeah.

pat on the back.

Yeah, we go in and then we meet we meet about it.

We all look at each other. It's like, Oh, do we actually do the

thing? I don't know. Yeah, I did that. Oh, no, everything

changed. I couldn't do that. You know, it's like you're

recovering are we're justifying our own existence, in a little

operation that we have here. So it's funny, but it's true. It's

like go be honest with yourself and ask yourself why Why are we

trying to do these different things? And what is it going

going to actually improve? Is it just that, hey, my job is a BDR,

I pick up the phone, I pick up the phone, and I call 50. Guys,

and I send 50 emails, and that's what I do every day. And I get,

you know, 10% connects, and I get a meeting in five meetings a

week. Okay, and I could go on, and I could do that for the rest

of my life. Okay, that doesn't sound like a sounds like a

miserable existence. But where's the improvement there? What do

you want to improve? There are particular things you do you

want to improve the result of getting meetings? Do you want to

improve? Like, anyway, that's just a crappy example. But you

know, asking why we want to do different things and getting

very selective. And then breaking that down into

outcomes. That's the key.

For example, yeah, yeah. So let's, let's take that, you

know, okay, you've written down a whole list of crap that you

have to do or that you've always wanted to do. Now, it's about

recognizing the pattern, you know, determining which of these

so you group them, you know, which of these are, you know,

similar, and would actually be related to one another. And you

use your, you know, inductive thinking to try and associate

them and you group them, and then you label the groups. And

then you can all look at them and say, as a team, if you're

doing this as a team, which we always did sort of as teams, you

look at all this crap, you just written down and go well, which

is the most important here, like which most worthwhile? It seems

like, this is what I what does everyone think? And then you

sort of debate it, and you go, yeah, I think you know, what, we

wrote a lot about improving the onboarding process. There's the

objective, what do we want to achieve? Want to create a badass

onboarding process for new customers? Great. Next step,

quantify it. That's it, that's the key result is the

quantifying of the objective. So what you're doing, it's putting

a numeric value to the objective, that you can then

through the process of a quarter, a certain time box

cycle, you know, if you will, you attempt to improve the

metric? So quantify how we're going to create a badass

onboarding process? Well know, what KPIs do we currently use

for onboarding, you know, time to value or, you know,

engagement rate, I don't know you have, list them all out and

do the same thing. Choose to be selective, choose the ones that

know, you think representative.

Yeah, and the ones, the the control versus influence

part is, is important too. Because you can pick up you can

control, creating five web pages, you know, or creating a

new deck for the onboarding experience, you can't control

how that's received the satisfaction of it, the

engagement of it, there's, you know, maybe that's not the best

example. But like, the the key results paired with, you know,

initiatives and action. That's, that's where the magic happens.

Because like everybody, you know, to use the consumer

example, key result is I want to, right now weigh 250 pounds,

and I want to wait to 15. Great, that's a great key result,

reduce your weight by whatever 40% 20%. Well, to do that, what

do I need to do? Well, maybe go into the gym 10 times would be a

great start, or doing some sort of physical activity, something

new, not not the things that I do every day, stop eating

leftovers, or getting second helpings, like, whatever it

might be like, what's the actions that you're going to

take? Right?

And that's where the teams, that's where you're empowering

teams, we talk about empowerment? No, our approach

here is to determine collectively what direction

you're heading in, and then give the teams or in your case, the

overweight person, that the teams the autonomy to decide how

to get there, how to move that metric, okay, we have to move.

We have to decrease customer churn. That's the direction

we're going, that's how we're going to measure it. And it's

going to be objective, we're not going to try and, you know,

undermine the numbers somehow by changing things in Salesforce.

We're gonna, like, try to move that objective. So what are we

going to do? Experiment, that's the, that's the fuel that you

need to try and influence the metric you've agreed upon. It's

experimentations deciding Well, let's try this. Let's try that.

That didn't work. Okay. Let's try something else.

Yep, that's what it's that's what it is, is just

trying to identify the biggest his priorities, the things that

you want to improve. And taking a crack at it, and doing

something different, and trying something new, I think that

that's important. It's like, you got your day to day stuff, you

know, everybody's got to pick up the phone, talk to customers,

you know, do write code, build pages, you got all your stuff,

but like, there's, there's time to extend yourself and push your

your limitations, because for every growing company, that's

what you got to do, you got to, you got to go above and beyond,

you know, these, these b2b SaaS companies that are no longer

startups and they want to, you know, hit that next phase of

growth, like you got to, you got to continuously improve. That's

what this is. This is like continuous improvement, and

changing behaviors and driving measurable outcomes.

Yeah. But if you make your key results, outputs or

initiative, or just any sort of actionable, you know, task or

effort, instead of an outcome, and the outcome is, you know,

the actual behavioral change that drive the result, you make

your key results, like, create five blog posts, what a lot of

crap, you know, if you make that your key results, not only it

incurs a series of problems, it incurs a problem of, well, what

if halfway through your quarter, things have changed. And now you

have to pivot, but you've already committed to writing

five blog posts. So what now have committed to doing this key

results, and now I have to do something else, and you can't

just simply change it, you know. So also, maybe it's like a

domino effect. Maybe you write key results that are all action

orientated. And if you don't do the first one, then you can't do

the next three, you know, so just get out of that routine of,

you know, when you quit when you write a key results, and you're

going to try drafting them and you, you know, it's a scale.

It's like riding the bike, you're not going to get it right

the first time, but look at the key results and go, Are these

just things like tasks I can do? Are they actual measurements? Do

they have a measurable number, like a metric that quantifies

this objective? Like, can? Are these key results? The question

is, you know, how do I know when I've met this objective? Like,

what's the number that gets influenced? When I've met this

objective? That's the key results. Everything else is the

effort that you do.

So what are some ways to kind of prevent poor key

result? Creation, if you're, you're you're meeting with your

team and teams are doing their 2022 planning, and they're

coming up with all their different key results. And

there, they got a laundry list of all these different KPIs that

they could potentially plug in and like, and they're starting

to draft them in the right num, and they're piecing it together?

And like, how can you prevent from from preventing yourself

from locking yourself into something that might not matter

halfway through the quarter? Like what are like, what are

some of the things that you can ask yourself, like to prevent

that from happening proactively?

Yeah, well, I think it's a, it's a team exercise. So you

have to ask the team, broadly, you can be the the leader

hearing go. We're using this KPI as our key results. Everyone,

you know that, that just demotivates every person in the

room. So it's a team exercise, and just like determining any

sort of prioritization, you, you lay them all out, and you group

them together. Ideally, there's a KPI that you have already set

in place that measures something already, that's in danger or not

in danger, maybe, let's call it, you know, not where it's

supposed to be. So you can identify a few five key KPIs for

the onboarding process in your company. And one of them is

satisfaction rate. And that's not where it's usually should be

about 80% and it's down at 40. Well, then you already know if

you can easily identify and prioritize. If you just look at

the KPIs and see which ones aren't where they're supposed to

be. But if they're all where they're supposed to be, maybe

don't even need to choose one then. So, I don't know. What do

you think what are ways to to get key results, you know, to

choose the right one?

Well, I mean, I think the most simple simple

example that everybody can relate to is revenue. Right?

Everybody, everybody, annual recurring revenue, you know, for

b2b SaaS companies is the most critical metric, or monthly

recurring revenue if you do monthly programs, or monthly

products, but, you know, you're at, say, 5 million or 10 million

annual recurring revenue, and you're trying to get to 20

million, right? Like, that's, that's always like the top

priority for any business because businesses exist to make

money. But that can't be the only metric that gets measured.

And there's a lot of touch points and a lot of things that

happen from you know, that that journey, but if you're looking

at it objectively, and you say, alright, we want to, we want to

grow revenue, and be a highly profitable company, like, that's

our objective. And we were going to measure success by revenues

from 5 million to 10 million, or 10 million to 20 million,

whatever it might be. And you might look and say, Well, if we

just keep we've been growing at 100%, doing we've been doing,

like, great, maybe we don't we just keep going, and that's

fine. Or but maybe you look at a number and you go Yeah, Harry,

our VP of Sales ain't going to get us there. We like we need to

hire a chief revenue officer that's been there done that, or,

as an example, like, that's an initiative that you can, you

know, add to the mix. But I think baselining those numbers

is important. So you can always have a starting point in

comparing apples to apples when it comes to these metrics,

right? Like you mentioned, satisfaction, like, what what is

that number? Where do you derive that number from? Do we do a

survey? Are we going to use the same survey? Three months from

now, like, you gotta have a baseline metric? And you have to

be able to consistently reference that that's, I can

tell you like, from a marketing standpoint, that's the biggest

challenge is Apples to Apples measurements. Because, yeah,

hey, I want you know, a million new leads. Alright, great. Yeah,

maybe like we're quality leads, like you, if you're not

measuring the same things, consistently, you can gain the

system, you know, yes. But that gets a little bit more nuanced

in the funnel, I would say. But yeah, it's important to just

say, here's the link to the, to the report, and that's the one

we're going to look at, and the one we're going to track the

dots going up and down, whatever. And, and it's

unequivocal, it's unambiguous. It's very clear, that is the

report.

And I think he touched on something which was that, you

know, unless you have a balance in key results, you will really

not encapsulate a holistic view of performance. So by that, I

mean, if you're only measuring, it's very easy to go straight to

revenue as a measurement, because it's unanimous, every

human knows what money is. So like, it's easy to go to

revenue, but you need to pair it with quality so that you have a

balance, because you could grow revenues by X percent. But what

if you're not incorporating retention? Now, what if you're

just focusing on new SAS, but all your customers that you got

last year are churning. So you know, you have to, and it's

difficult to measure quality, or come out and say this really

difficult, but nothing, everything can be measured.

It's, it's whether the measurement is effective or not,

there's so measurements and metrics that are more effective

than others. But as we spoke with our our CTO, it's sometimes

very difficult measuring engineering activities, but it's

still worth measuring them, you know, it's, it's still worth

having a bad measurement, then no measurement, unequivocally

because at least you can learn, you know. So the two tips there

as to add onto yours are that you should pair your key results

have more than one basically, I think at least two so that you

have a balance between quantity and quality. And also have the

metrics there, even if they're, they don't encapsulate every

single thing and effort you put in, at least you have a metric

that as you say, you can track over time, you can objectively

analyze, and try to learn from them, as you spoke about at the

very beginning of the song, it's all the OKRs are just all laid

out a movement of continuous learning.

And the third one I would add to that is health.

Right quality, quantity and health. It's like, Alright, I

want to say I want to increase lead count. Okay, I want to go

from 1000 to 2000. Great, that's awesome. based metric, I want to

improve the quality. Okay, great. So say you improve your

targeting, and you go right in LinkedIn, and you hone in on a

particular segment and you just nail it. Right? So you hit the

quality, you check the quality box, but you could piss off, a

lot of people in the health of your customer interaction can be

reduced significantly, if you show up to the website, and

there's just forms everywhere. And things dinging and, you

know, sign up here. It's like, yeah, you might increase volume.

Yeah, you might even increase quality. But you might piss off

a good segment of your customer base. You know, like, that's not

healthy. It's not a healthy and it's the same with employees.

It's like, okay, yeah, we want to increase revenue from X to Y.

Great. We want to increase, you know, our market share in this

particular segment. Great. But if we're burning everybody out

the health of our people whose sacrifice or jeopardize like, is

it worth it? Probably not. At some point, everybody can, you

know, say, uncle? You don't you want to get out in front of

that. You don't want to wait till it's too late. You know,

I've suffered from burnout before. You don't want to, like

your health is key, it's probably the most important

thing. Yeah,

that's great. That's great examples of just those metrics

and how to balance them, definitely don't make the

mistake of all financial performance metrics, because

they are the first things that come to mind. And naturally,

you'll have them and it's important to have them but that

balance is critical. If you want to sustain your business, your

OKRs your people, you know, if you want more sustainable

growth, it's it's about balance.

Yep. So I like for companies now that are creating

their annual ones. So they got the ideally the one at the top,

the tippity top that sort of collects and aggregates the

business. Is that is that do you aggregate key results across all

your different groups? Do? You know do you do get selective

about different ones quality quantity help you talk about

customers and people and business performance? Like how

do you kind of reconcile those different aspects of your

business and surface? The right ones to the top? Yeah,

look at well, there's two parts to that question.

surfacing the being selective and surfacing the right metrics

to the top is a difficult process, it's unbelievably

difficult, because you have to say, now, it's like, having 10

Great ideas and only being allowed to pick one. So OKRs are

about saying no, or at least not right now. So that's really

going to be a difficult process. And it requires a lot of debate.

But as you're saying, absolutely, we advocate here for

simplicity with this stuff, like you can't make the mistake of

trying to do five OKRs at the top and all these key results.

No, just choose one, as you say, one OKR sits at the top of the

company, very clear objective. And it's got three key results.

And those are, you know, across as we maybe just said, your

business, or maybe your you know, your financial

performance, your customers and your employees. Start there, you

know, if you want to add more for different business lines,

you know, and you have to adapt them fine. Okay. But, you know,

try to get boiled down to something as simple as that.

Yeah, I mean, yeah, I mean, if you think about it,

like the ideal pairing, and I may be curious to know what your

thoughts are. But like, if I was only given three key results for

this company, and say this company was to 300 people at 22.

Yeah, if I, if I was only given three, we would obviously get in

a room and we would debate it. But if it was just my decision,

it would be revenue, like, what's the quantity? The

quantity of dollars that we brought in? It would be churn?

are we retaining our current customers? And are we keeping

it? I actually know, I would say negative churn. What's the

quality of both our interactions with existing customers and

growing existing customers like negative churn would probably be

the way I would measure quality, and then employee satisfaction

and just do a quarterly survey or an annual survey or, you

know, that would be the initiative but like, I would

want to benchmark that, that number, maybe even do like use

the Q 12, the Gallup q 12. And just use that as your benchmark

and just say, well, this is this is what this is how we measure

success and then And those, those three right there, if you

had a company that was growing revenues, if you have a company

that's expanding your customers, and you had a company where your

Q 12 Number is, like, above a nine, you get a damn good

business, no matter what you're doing. You know,

but no matter how really big you grow, those are the three

components that are always there. You know, like, I guess

you can go up to these massive company, but, you know, for, for

tech companies growing. That's it. You just, you've just

outlined the three key components, why not just put the

OKR together with that? And that's it, then you don't have

to worry about communicating 50 Vogan, OKR? One, there it is.

Yeah, now everybody has, they can see how they fit

into that, like, alright, well, I need to not waste money, I

need to help the company make money, I need to ensure that

these customers are happy. And I need to, you know, not be an

insufferable asshole to my colleagues. Right? You can

anybody can connect the dots. And I think we just did all the

annual planning for every business on the planet right?

Now, just just take that template and plug it in, it's

free as well, if you just listen to the podcast,

but you know, below the surface, like that's

perfection, right? Like if you just nail it, but like below the

surface, the problem is, is, you know, your customers are turning

and growing revenue is difficult. And your people are

leaving, right, like we painted a rosy picture. But in reality,

there's, there's a lot of problems that every like, even

ourselves, like we need to grow revenue, we like I want to make

sure that everybody's happy. So do you like what our customers

we want to keep them happy, we want to grow them, like, like we

we have the same problems, how we fix that, and how we break

that down is is going to be, you know, how we structure our

program. It's implied, but the stuff cannot be ambiguous. And

objectives can't contain metrics. You maybe want to chat

about that one briefly.

Like there's anything to chat about don't put metrics in

your fucking objectives. Yeah, no, the objective is the

inspiration. The key result is quantifying that inspiration.

That was funny as we started out, like talking about

making fun of some of the really poor examples. And we actually

like they're poor examples, because it's just the list of

stuff like writing blog posts, but there's actually even worse

examples out there for key results, it's like, get better

at the thing. Improve the world's happiness. Yeah, it's

like, no, that's ambiguous, that's vague. You're talking in

circles, you know, go work for corporate America, getting very

specific, you know, measurable, having that metric, verifiable,

like that. Those are key components of a good key result?

Well, the

key results, as I said, probably five times arrays

quantifying the objective. And that's difficult, but without a

clear measurement, you resort to exactly what you're saying.

subjectivity, it's just someone's judgment, you end up

at the end of the quarter going. Okay, so let's look at this.

Okay. Or, and everyone's going well, we did a few of those

things. Let's say it's 60%. Let's say 70. Not split the

difference. It's 65%. Done. Yeah. And you're like, it's just

some dude in the room saying it's 65% done. That's not

objectiveness. You know, so the key result is its power and this

whole framework and why people love it and advocated for why we

advocate for it is because that key result component takes the

inspirational niceness of yeah, let's go data and attaches. Its

objectivity where everyone, my grandmother, and everyone can

come in and and look at it and go, the number move from five to

10 Does No, no, no question about it. There was a clear

objective, increase great job. You know, that's the pair of the

key result and that's why you got to make sure it's it's a

metric and that it's there's a balance