Your GOLDEN KR. You want FOCUS? Choose ONE Key Result!

#okrs #viva #pm2

“If you chase two rabbits you will catch none”*

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Each performance measurement structure that has been developed, such as OKRs, The Balanced Scorecard, The Four Disciplines of Execution (4DX), Objectives, Goals, Strategy, and Measures (OGSM) etc. all bring one or two unique and key concepts to our practices. Among the significant contributions of OKRs Is the concept of focus. The general practice is to focus on no more than three Objectives (O’s), and create focus within those Objectives with no more than three Key Results (KRs).

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The need (what are we solving for)

In practice, though, what we see is even with just three objectives with three key results, individuals can still find themselves working at cross purposes with others or not focusing in on exactly what the organization needs this quarter. The specific mechanics of this confusion can be caused by:

• Even within just three objectives, they can never be considered equally important. If the individual chooses the wrong Objective or wrong Key Result to be the one that they think is most important, their resource is and time will be wasted on the wrong thing,
• An individual or team considers all three Objectives (and “nine” KRs) to be equally important, They will allocate exactly the same effort in achieving all of them, which inevitably means they'll achieve none of them since inevitably some will be more difficult, others will need more resources, others will be a lower priority, etc. By Working on each with exactly the same effort means, by definition, some will be under resource, and others will be over resourced
• If one team member thinks one objective is more important, and another team member thinks a different objective is more important, they will be forever in conflict and working at cross purposes,
• If two different teams think that they are accountable for the same Objective (or outcome), they will be forever in conflict and working at cross purposes.

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The idea

An interesting trick that we have seen to be HIGHLY effective is to have each individual choose one single key result that the organization needs them to deliver. If you are in Sales, maybe your Golden KR is “Sales Revenue”, if you are Customer Support, maybe your Golden KR is “% Trouble Tickets Closed in SLA time” (SLA=Service Level Agreement), if you are in Operations your Golden KR might be “Order to Fulfilment Elapsed Time”.

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Each of these examples we see a very clear focus on the outcome the organization needs from you. There is no question that to achieve each of these Golden KR's, there is a mix of activities that need to be achieved. It is important to note that it is unlikely that this mix of activities will all be owned by you or your department; inevitably they'll be a cross functional nature to all work.

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It is also important to note that the Golden KR is inexorably linked to the organization strategy. The above examples are presented to provide a degree of clarity and examples of how they would very by function, and the fact that each function can have Golden KRs. But if we take a look at each example, it would actually need to be aligned to the strategy. Let's use the example of Sales. I used the example of a Golden KR of “Sales Revenue”… but if the corporate strategy was around “growth”, Sales would need to know whether the growth will come from introducing new products, adding new customers, entering new markets, changing the pricing scheme, getting better share of wallet, etc. Based on the specific strategy, and the role of this individual within the Sales Team, would determine the actual Golden KR. Using them above example strategies, you could see how the Golden KR could be different:

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Some finer points

Run-the-Business or Change-the-Business

The work we do in organizations fit into two general categories:

• Run the Business (RtB) - The ongoing activities that we need to do in order to stay in business. Examples of these are things like achieving sales, servicing customers, payroll, IT Operations, accounting, etc. These are typically measured with S.M.A.R.T. measures and have specific numerical targets. (A.K.A. “keep the lights on”, etc.)
• Change the Business (CtB) - Special activities which are designed to improve the RtB activities, in the fullness of time. (A.K.A. Projects, initiatives, programs, etc.). These activities may be completed within a single quarter, a single year or may take multiple years. Like with any project, they have defined budgets, deliverables, timelines, resourcing, accountabilities etc. In the OKR world we typically back-cast what milestones must be achieved by the end of each quarter and within that quarter we measure our progress towards that milestone. For example, the milestone for a large ERP implementation, this quarter, might be “User requirements defined”, and rather than a S.M.A.R.T. measure, the Project Manager would report “10% of the way the this quarter’s milestone”

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Your Golden KR may be either a RtB or CtB metric, depending on your focus for this quarter… but the criteria is the same “What is the one single key result that the organization needs you to deliver?”.

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To go back to our sales example, it is possible that as a Sales Representative you have also been assigned to the ERP project. Consider “What is the one single key result that the organization needs you to deliver?” Is it your sales number or the ERP project?

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We once worked with a Boeing executive who said that their Golden KR was obvious “If you missed schedule you're fired. If you miss budget, you are fired…eventually.” For this Boeing Executive, the Golden KR was “Schedule adherence”.

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RACI

(Responsible, Accountable, Consulted, Informed). The guidelines around RACI are that there will only ever be one “A” (Accountable) person. Your Golden KR is the one metric for which you are the single accountable person. As I mentioned above, it may take “a village” for you to achieve that number - those contributors and associated activities fit within the “R” (Responsible) Category and should still be captured within your OKR system.

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Now, as with any RACI model, you will have an “A” that may well correspond to an “R” from your leader. Using our sales example, the national Sales Manager’s Golden KR may be “National Sales Revenue” (their RACI “A”). To achieve that they will have a number of sales reps who are responsible for elements of national sales…. They will be represented as the leaders’ “R” (Responsible) , team one of which may be you with your Sales Golden KR, which could more accurately be titled?“Eastern Region Sales Revenue”

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How to find your Golden KR

This is a standard “top down or bottom up” question. One approach would be to create your three Objectives and nine Key Results in the normal way. Once developed, look at all your across your KRs and determine the one critical one which passes the “What is the one single key result that the organization needs you to deliver?” test.

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The opposite approach would be to work with your leader to determine your Golden KR and use that as one of the elements in building out your three Objectives and nine Key Results.

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A word of caution

Goodhart's Law: An obsession with the numbers can sink your strategy. (AKA Surrogation). Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure. That's what we call "surrogation" - confusing what's being measured (the 'O') with the metric being used ( the KRs). Make sure that your Golden KR does not be come the ONLY goal… Use it to gain focus, but remember the OKRs are what gets you there.

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NOTE: More accurately translated: "If you try to chase two rabbits, both will escape", first reported by Desiderius Erasmus, a Dutch philosopher, who compiled a collection of Greek and Latin proverbs

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