KPIs, OKRs and BHAGs

KPIs, OKRs and BHAGs:  The old, the new and the scary of goal setting.

I hate KPIs.  There, I said it.  In fact, KPIs and the corporate BS that tends to accompany them, particularly in larger organisations (think SWOT analyses, balanced scorecards, organisational design and the like) are a large part of the reason I LOVE small business, including associations!  As owners/Directors of small organisations, we get to choose the way we set goals and measure our successes.

OKRs

Enter, OKRs.  More than just another acronym, Objectives and Key Results simplify the goal setting process by clearly stating WHAT is to be achieved (the ‘O’) and HOW we’re going to achieve it (the ‘KR’s).   Here is an example which relates to a marketing goal:

O 1:     Increase the number of warm new client/member leads.

• KR 1:  Grow marketing database from 2000 to 3000 contacts in Q1.
• KR 2:  Ensure all marketing includes a ‘subscribe’ link.
• KR 3:  Increase content output by 50% by Q2.
• KR 4: Identify 200 new warm leads by Q2.

It’s a simple statement of what we want, and how we’re going to achieve it.

KPIs

KPIs, in contrast, focus on the measurement of specific SMART (Specific, Measurable, Attainable, Realistic and Time-bound) goals.  For example:

KPI 1:  Increase the number of warm new client/member leads by 200 in Q1.

In a big company, each role will have a whole series of KPIs which it is responsible for achieving.  But, as you can see in the above examples, there’s an inherent disconnect from the actual organisational goals in the KPI model.  No doubt, there’s a company-wide strategy, with a lot of complex analysis behind it and a detailed and expensive consultant’s report around it.  But they can seem as though they operate in isolation and the overall picture can be difficult to see.

Using OKRs

In small business, we want simple.  A simple and clear strategy document requires 1-page.  Nothing more.  From that, action plans can be set – by quarter/month/week/day, thus enabling the team to get on with their jobs without being side-tracked, confused or inefficient.  OKRs are a simple way to state goals, outline how to achieve them and bring the whole team along on the journey.

Here’s how an objective might trickle down through the organisation:

Org-wide O:      Increase revenue.

Ops O:                Implement a new database system.

Marketing O:     Grow contact database.

Sales O:             Convert more warm leads to customers.

Finance O:        Expand payment options.

Each objective here would be accompanied by 3-5 KRs, fleshing out HOW each department will achieve the objective.

Ideally, an organisation should have 3-5 top-level objectives a year, with 3-5 KRs to measure each one of the objectives.  Each department should have the same, outlining their role in achieving the top-level OKRs.  And then, each role should have its own OKRs, outlining its role in achieving the departmental ones.

BHAGs

Big, hairy, audacious goals.  If you knew 100% that you would succeed, what goals would you set for the organisation?  Call them ‘stretch targets’, ‘10x’ goals or BHAGs; the point is to go big and aim high.  If you’re going to fall short of a target, it might as well be a big one rather than a small one!

Where to start

So where does the goal setting process start?  With your Mission, Vision and Values of course!  This set of simple statements gives you’re a clear direction.  It sets your company compass to North and makes sure you keep pointing in that direction.  If you haven’t downloaded it already, grab our MVV Cheat Sheet via this link for a simple how-to guide.

Need help?

At onsomble, we have been helping small, service-based organisations develop and deliver effective strategies for over a decade. We’ve created a strategy development package for businesses like yours, delivered by me, onsomble’s founder and Managing Director. Learn about our package here.

Keep thinking big,

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