Learn how to decipher the differences between KPIs from Key Results in a logical way.

Do we dare attempt the KPI ?

Let's definitely cover it. Yeah.

Okay. What? How do KPIs factor into all this stuff?

Well, KPIs are key performance indicators, and they

do exactly that. They're a numeric value that indicates

your progress or your your effort that you've exerted and

your performance, their performance. Yeah, but they, but

the subtleness between a KPI and a key result is this, every key

result should be a KPI. But not every KPI needs to be a key

result. So it's the environment in which you decide your key

results. As we said earlier, they're both the same thing.

They both indicate performance. But an OKR is designed to

identify an area that perhaps needs improvement, or that with

a touch of ambition can be brought further, you know,

grown, so you're trying to basically. So key results are

really just you identify the KPIs that are already in place,

and which ones are at risk. Those are the ones you select to

be key results are the ones that you want to improve, or the ones

that you want to improve. Exactly. Yeah. So

like, you could log into Google Analytics, for

example. And there's a treasure trove of data. I mean, you can

slice and dice this stuff. And you can get down to as granular

as I want to see everybody in Zimbabwe using Google Chrome on

a mobile device. Yeah, like, that's a KPI. Yeah. Now, whether

you want to increase that by 100%, if that's what you really

want to focus on Zimbabwe is your jam, then that's a great

key result. Because it's super specific. But more than likely,

that's not something that you need to measure or improve. But

it's that, like, I'm gonna, I think I'm just gonna make some

bumper stickers that with what you said, you know, every key

result is a KPI. But not every KPI is a key result. That's it.

That's the metric. Yeah. And so a lot of this stuff kind of gets

ambiguous, because there's plenty of like data

visualization companies out there that say, Well, I got

Tableau or Geckoboard. And I can build all these widgets, and I

can create these really fancy dashboards and I can just have a

real time view of of my business. It doesn't matter. No,

it doesn't matter. I we could do that. Now. We you know, it

doesn't matter if nobody's actually moving something

towards that number. And focusing on that number. And if

everybody's aware that that's the priority, like, and you're

you're getting those dopamine hits, watching progress and

watching the number go up. Like, if you don't have that, then you

just have a dashboard.

Yep, exactly. So really, that's it to summarize key

results and KPIs. They are both numeric values that represent

performance. And, in your example, there are all these

numeric exact metrics, they're all lined out on a table, and

you call them all KPIs. But when you decide to select very

particular ones, in order to improve them with the sense of

ambition, and drive that selection process, to bring them

into an OKR. That's the process of converting them to a key

result. Now they are key results, because you've decided

out of 50 of these measurable things. I'm choosing this one or

this these two, they're the key key results.

Yep. There's still a couple little things. I don't

think we really touched on objectives, writing objectives.

This. This is not as complicated I would say, as, you know,

identifying your key results, but it's an important one. We

talked about not including metrics in your objectives, you

don't want to kind of that that's what the purpose is. The

key result is to contain the metric the the objective is to

give direction, motivation, clear vision of what you're

trying to achieve what the focus is, it's we're trying to build

the world's greatest OKR company. We're trying To be the

best place to work for our employees, we're trying to

delight customers continuously. We're trying to do whatever

right, it's like, this is the motivation, the inspiration, the

direction that we're trying to go. And that's, you know,

important to put to paper and start to talk about and sort of

break that down. Yeah. If you have any other thoughts on

better objectives?

No, I think you summarized it perfectly. And beautifully. I

think the only thing I'd add is this some tips. writing

objectives is your opportunity, as a team, and as a leader of

the team, maybe, to think broadly, to step back, not be so

narrowly focused on this is the metric we have to get from this

to this, that will come later, this is your opportunity to

really be creative, reflect on past, you know, performance,

consider what is really compelling, everyone to act with

a sense of urgency, what will really benefit other people,

what will benefit our customers, what will motivate us here, as

individuals on the team, these are things that you really need

to discuss at length, and because if you just decide,

well, this is our objective, guys, I'll have no more to say

about it. It immediately negate the gates, the whole purpose of

it, because it's not memorable, it's not motivating. And it

really isn't anything to strive towards. So you want those

components needs to inspire you, and you need to remember it. And

so think broadly about, you know, have a good debate about

it. And another quick tip is just, you know, maybe use an

action word in, you know, become the world's best thing or, you

know, build a greater product or delight. Our customers, you

know, something, something like that short, sweet, and maybe

some action oriented in this in there, that people can just look

at every week, every month, every quarter, whatever and go,

Yeah, I like that. I could strive towards that.

Yeah, it's your priorities. What are your

priorities? You know, do you want to know your priorities,

open up a checkbook, that's, you know, where are you spending

your money and your priorities, you know, as a business, what,

probably half your priorities are your people, that's probably

where half your money goes, if not more, probably more. So

like, that's a big priority, like taking care of your people,

like spending tons of money building product, in maintaining

product for your customers, like that's a priority, right, you

got to make sure that that's surface, the top, you know,

ensuring that the business is healthy, and producing money and

generating revenue, and isn't burning cash like that the

health of the business is a priority, like, these are the

big priorities, and they got to be surfaced. And it's, it

doesn't have to be unique to everybody, everybody's gonna

have their nuances, but that's really it. It's like keep, keep

your people happy, keep your customers happy and keep the

business happy. You do that. Like the things below the

surface, you'll figure out where you want to improve, where you

think you can improve, those are your assumptions, your

hypothesis, different metrics, that you have to move the needle

on like that, you can do that. But you know, breaking those

down in terms of priority is huge. I think the last bit here,

though, that we did, we kind of touched on a little bit. And I

think this will probably wrap us up. But we talked, you know, we

made fun of a lot of the examples, you know, do five

things that's just output or, you know, complete the project.

It's at 80%, or 60%, or whatever. But really putting

these different types of actions in the right bucket, using the

logic model, I don't know if maybe you want to touch on that

how to distinguish logically, you know, what, what would be a

good key result, which is an outcome or an impact metric?

Versus just, you know, tasks, actions, deliverables, output,

hiring, what are what are some ways to kind of structure your

thinking when you're trying to come up with these different

ways of measurement?

Now, it's great the logic model actually discovered I

never knew it manifested or was originally came to came to light

from an article WK Kellogg, no sort of performance management

sort of article, but it's, yeah, it's a great model. It

visualizes linear progression of you know, the relationship

between your planned work and your intended results. So your

planned work? Is your, your resources? No, that includes

humans financial, organizational, you know,

technology, capital, and then your activities, which is what

you're going to do. And that's your planned work, what am I

actually going to do the processes, the events,

everything you're going to create. And then that all leads

to outputs, which are, you know, the byproduct of the activities,

what you produce. And then those are related to outcomes. And

outcomes are how you change your one's behavior with the output,

you know, if I, I am attempting to do all this activity, so that

I can produce x volume of this feature or whatever, and then in

an attempt to change the user's behavior, and finally, impact if

we change someone's behavior significantly enough, we make a

greater financial, economic movement or impact. So I think

what would help if you tried to describe it in shorter way, and

used a better example, maybe or a exam?

No, I think he did well, and explained it nicely. I

think it's really I mean, there's, there's a lot of, I

mean, you could look up the impact, or the logic model. And

you can see that a lot of this is related to, like child

psychology and child development and learning programs and just

how to actually drive change. But it starts with resources,

like it starts with your people starts with time, technology,

money, that's where it starts, you got it, you can't do

anything without the resources. Like that. That is, that is,

like, logically, the first place, you can't build a super

profitable business without people. Yeah, and time, and

resources and money. Right. And, and even if you get all that

stuff, you got great people and you got tons of money, you got

plenty of time. If you're not working on the right things,

you're not creating the right things. It doesn't matter. We

raised money, we got great people, if every day, we just

sat down and watched YouTube videos, that was our activities,

we would quickly burn through our resources. But all this

stuff leads to outcomes and impact. And I think

understanding these is really critical, because they make

number one, they make fantastic key results, because they are

things that you can measure an influence over time. Short term

outcomes are really about learning an action, right? Like,

is is my are my customers aware of my products? How do they feel

about my products? How are my employees satisfied with working

here, like learning information about people and customers and

your business? And, and putting those as outcomes is a great

place to start the short term? You know, medium term, it's

behaviors, its policies, its decision making? Like do I want

to be a customer? Yes, no. Right? Like, those decisions and

action and changes, like the measurable change. Those are

great, great key results. And then really the the long term

outcomes or the the impactful outcomes. And those are related

to like you said, it's change in economics, you know, situations,

it's environmental change, social change, things that just

don't happen overnight. They take a long time, it takes like

a year, right? Like the the impact your financial impact

doesn't come about on December 31. Like, like the how much

money made for the year doesn't happen on the last day of the

year. It's a collection of all the things that you did. This is

obviously not very logical, but it's the collection of all the

things that you did throughout the course of the year that

determines, did you hit your number? Did you not hit your

number, right? And so like, now we're going into this, like, new

era, whatever you want to call it, where we're trying to do

these really big changes for like our planet, climate change,

or God doers, writing books, you know, with plans in it, like,

that stuff's gonna take a long time. And but if you can measure

it, and you can see the Moodle, Moodle, the needle moving, you

can, you know, start a movement. And so those outcomes are

critical. And that's the logic model and it's a great way to

frame any business.

Well, I tell you, yeah, dad, right. Great way to and you

know, what I'd say to everyone listening is go into our

Knowledge Center, we have, you know, downloadable playbooks and

worksheets where you You can see the logic model and see some

examples of it. And I tell you why it's just just try it out as

an experiment doesn't take long. I did, I really came to this was

really sort of insightful when I discovered it. It's not so much

the model itself, that's impactful and helpful. It's the

clarity of thinking, that occurs when you create the model and

put it in through your perspective, through your life

and your business. That clarity of thinking is the benefit of

the model. It's not the model itself, or wherever you go,

it's, it's about actually creating it, modifying it, going

through the process of putting it into your perspective. That's

where you, you suddenly have all these epiphanies of like, Oh, my

God, we haven't been getting this outcome. Because we haven't

been doing enough resources, you know, we need a resource plan,

we need add capacity there. And what activities why are we doing

this many we should do those. So it's all the value comes from

just that process of doing it.

Yeah, and we this is our simplified version, there's

actually more complex visualizations of the logic

model, but we kind of broke it down into three pieces. But to

add on just one other minor detail, it all starts with a

hypothesis. And it's an assumption, right? That's what

it starts with. And to use a business example, every investor

that invest into a company has an assumption and a hypothesis.

And the first thing he's trying to figure out is, do these

jokers know what they're doing? And if I give them, you know,

resources, my capital, if I do that, in the long term, will

there be an economic impact? Now, the benefit of the investor

is they don't have to go off and find the resources. They don't

have to do any of the activities. They don't have to

drive any of the outcomes. They get to skip all that. Yeah, they

go right to the economic impact. Yeah, now, they might be a

little stressed along the way, because they can't control and

influence things. But really, that's it, it's like, they have

an assumption. And they make a decision, and they give

resources and that the end goal is an economic impact. Or maybe

they just want to do it for the betterment of society by

donating money, and they just don't really care about getting

money back. But like, from a company perspective, like we've

had an assumption that there isn't a market here, that we can

build product that we can serve customers like we like none of

this is guaranteed, no matter how good you are. And, and so to

do that, we needed resources. And now we got it. Now we're

trying to build and produce stuff. And then getting in front

of people, and letting them validate our assumptions. And

then going back and saying, Alright, well, we got to do

other stuff. And then going back and seeing what those like those

outcomes are. And if you do all that stuff, right, and you're

continuously learning, you'll get over time to a long term

impact for yourself, your business, or even, you know, the

society and culture around you.

Fantastic. Well said, That's great example, you know, and so

definitely, everyone go out and check out the logic model and

just try it out with your team, you know, your company, you and

as an individual, it's worth worthwhile. It's good exercise.

Good. And the stuff that you described though, is

only that's only for customers. Only customers can log in and

download some of this stuff, right? We don't have public

facing Okay, so not everybody is going to be a customer when they

hear this. Maybe they could be

or they shouldn't be then a third assumption. What you got

to do the customer you get all this great shit.

Angel hater kJ. All right, good stuff. Well, I think

we went a little long on that one. Yeah, my

fucking legs are killing me. Oh, you're standing up. Standing

up since nine. Ah. I've had these people do you know?

I've been I've been sitting all day. I just probably