Driving Revenue Growth: Aligning Business Goals with OKRs and KPIs

The most viable way to sustainably achieve business goals is to not focus on what you want for your business but to instead create and deliver measurable value for your clients. While this sounds obvious, a staggering percentage of corporate business goals in Sales and Marketing are inwardly focused without considering if the client is receiving value. It's as these business executives are so exclusively focused on revenue and profitability that they seem to forget that not one single client buys from you in order to become part of your profit center!

But there's a much better and more sustainable way to think about business goals and the Key Performance Indicators (KPIs) currently splayed across hard-to-read eye-chart type 'dashboards' and reports. These leaders need to reorient their thinking around Goals and KPIs by including OKRs as their management system for creating and delivering client value so that the by-product is consistent revenue.

GOALS, OKRs, and KPIs

Here's how I define each part of that process:

Goals?are a quantitative representation of a desired business outcome.?Said simply, Goals are “what’s in it for our business.”

Objectives are aspirational and inspirational ways to create and deliver value for the benefit of those we serve?(prospects, clients, Business Partners, for example). They are qualifiable, not quantifiable, and should be easily mapped to one or more Goals such that by creating and delivering value for others, the by-product is realizing a desired business result. A ‘best practice’ is to have between 2 and 4 Objectives in order to have a clarity of focus. Said simply, Objectives are “what’s in it for others.”

Key Results?are measurable and time-bound strategic areas of focus that can be tracked over time to represent the attainment of an Objective. Quite often there are between 2 and 5 Key Results per Objective. Said simply, Key Results are “How we’re learning to create and deliver measurable progress towards client value.”

Key Performance Indicators?(KPIs) are an aggregation of two or more metrics that provide a more holistic insight than individual measurements. KPIs are most valuable when represented as a barometer instead of as a thermometer, such that the rate of change and direction of that change is what’s focused on over individual data points/metrics. KPIs are extremely useful in seeing the trends/patterns/anti-patterns of systems and processes so that leaders, managers, and teams can ask better questions about the efficacy of ‘as-is’ states so that low-value processes can be eliminated, mitigated, or converted into high-value processes. Said simply, KPIs are useful indicators over time to represent the likelihood of reaching a Goal.

Every KPI exists because there’s a need to pull together two or more metrics and have them represented holistically. Tracking the performance of aggregated metrics is helpful and is why so many exec dashboards focus on the KPIs as a tactical thermometer for determining the likelihood of hitting the desired Goals. OKRs come in between the Goals and the KPIs to ensure we’re not just ‘busy doing stuff’ but actually learning how to create and deliver value through quantified metrics and qualified feedback loops that include the stakeholders, teams, and users.

WRITING BETTER GOALS

What I would strongly recommend is a way to write Goals that are measurable and time-bound with a focus on the desired business outcome, and then to represent the focus on client outcomes via Objectives and KRs, and finally have ?KPIs aligned up to those aspirational and inspirational (the “why are we doing/tracking this?") desired outcomes as a lagging indicator of the learnings and efficacy of work outcomes.

Here's a basic example (simplified with only a single Objective and Key Result):

GOAL:?Increase new client revenue through our product offering from the current $X amount to the desired $Y amount by the end of the fiscal year.

OBJECTIVE 1:?Make the value of our product for new clients both clear and obvious.

O1 KR1:?Improve the new client conversion rate by 25% from Business Partner leads by creating a personalized portal with a price estimator and automated quote by the end of this Quarter.

KPI:?Online performance of website online price estimators and automated quote conversion rates to determine the average quote size and the eventual win rate.

In the example above, the product leadership has Goals and KPIs they want to track and report on frequently to understand performance. The product team wants to do the work between the Goals and the KPIs so that there is a proper focus on prioritized deliverables with measurable progress towards realizing the client-focused value and the business results. The work of the product team is then captured aspirationally (in order to reach Goal 1, we believe that Objective 1 will create and deliver client value that will help to realize the Goal) and measurably (Key Results progress towards realizing the Objective’s desired outcome).

CLARITY IS REQUIRED

But for the product team to know how to set an aspirational and inspirational Objective for creating and delivering client value, they’d have to know:

• The Goals for our business are represented as “how much” or “to what extent” and “by when.”
• The pain points and/or the opportunities faced by the targeted client persona(s).
• The various product/solution options that can be represented as ways to address/mitigate/solve for the client's pain points and/or opportunities.

?In summary:

1. Set “what’s in it for the business” Goals based on a solid understanding of ‘why do we want to achieve this?’
2. Ask the various teams/regions/markets (per team/area) to come up with?ways they would imagine creating and delivering value against known pain points/opportunities?(Objectives) and how they’d strategically align focus areas (not tasks) to measure their progress in attaining each Objective (via Key Results).
3. Invite the teams under each of these to?localize their own?take on how to help be a part of realizing the Goals via the Objectives of the hierarchy level ‘above’ them and come up with their own version of Objectives (either very similar to or uniquely applied to the higher-level Objective) and Key Results.

I hope this newsletter article about driving revenue growth by aligning business Goals with OKRs and KPIs provides you with a way to think of collaborating with your own Span of Care leaders on how to create Goals together based on what is being asked of you to deliver by your executive leaders. And then giving them the delegated authority along with the delegated responsibility of finding ways to achieve those Goals but putting it in the hands of those doing the work.