How Measuring the Wrong Metrics Can Cost You Your Business

The title seems eerily frightening. As Founders, we spend days and nights, with our business in our mind. All that matters is, taking this baby and seeing it succeed. We experiment, measure, optimize, coach teams, rinse and repeat. Despite all the literature out there on what not to do, there continue to be ‘data debacles’ which one can fall into just on the charade of moving towards decisions backed by data.

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Three years ago, when we started speaking about OKRs, folks would shrug their shoulders and say ‘What are OKRs?’, and how do I use your product? Selling our OKR product would have been more like chasing rainbows, when the real leprechaun keeping us from the pot of gold, was the lack of awareness around OKRs.

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For those who are new to OKRs, it stands for Objectives and Key Results. OKRs are well known as a strategy execution framework, which shifts companies to think like a team, focus on outcomes, connecting and aligning to strategic priorities. You can read a Beginners guide on the ABCs of OKRs.

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So, here’s what we did.

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We spent most of our early days in coaching teams. As certified OKR coaches, we got into the trenches coached teams on ‘How to write effective OKRs?’ With copious coaching hours spent, we observed how leadership or next level teams faced similar fallacies on how strategic goals should be written.

Here’s another. During the 1000+ team check-in meetings which we conducted, we noticed that as much was the infatuation around metrics, courting the wrong ones could sour relationships in the team, and even come dangerously close to destroying a growth path or just keeping the business status quo, which sometimes is worse than slow growth.

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Here are our learnings on how to not to fall into the trap of measuring wrong!

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Measuring a Bunch of Lag Metrics in your OKRs

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What are Lag indicators? These are metrics that are measured post facto. There is little you can do to control them, as they are outcomes of other smoke signals , which are the lead indicators (the ones which can be controlled and measured a lot sooner than later). For instance, churn is a lag indicator, but product adoption is a lead indicator, which can help teams manage churn.

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Cherry-Picking Metrics, Like the ‘Solitary Reaper’

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One of the frequently asked questions is the difference between KPIs and OKRs. It takes two to tango, and indeed, KPIs can be part of OKRs. The difference is how they are written and managed. If KPIs are set between a manager and team member, there is a silo which gets created in the old school way of goal setting. But as we know, OKRs are written as teams, and picking KPIs which have a strategic impact can help you move the business forward.

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Lack of Strategy or Where To Focus

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‘Without strategy, execution is aimless. Without execution, strategy is useless’. Morris Chang. The precursor to setting high quality OKRs is a well defined strategy.

The word Objective in OKRs helps us think about ‘What exactly do we need to accomplish’ and the KRs tell us ‘How to get there’. The process of OKR writing helps teams reflect deeply on ‘What are the strategic priorities’ ‘How do we get there, and are there some ‘elephant in the room’ metrics we need to tame?’

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No Diagnostics of OKRs

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A powerful exercise one can conduct is a diagnostics, before picking the right metrics. Let’s take an example of Company ACME who had a series of schedule overruns. They had 20% of customers who were unhappy causing churn, and project managers (PMs) seemed to be overwhelmed with too many tasks. On a deep dive diagnostic, they realized that:

1. The schedule overruns were for larger deals which they had won
2. Project Managers spent a lot of time on paperwork , which could actually be digitized
3. While they had unhappy customers, they actually were missing an opportunity to seek feedback from well, Happy Customers’

The power of deep reflection, backed with data, helped them to identify the priorities, around which they crafted OKRs.

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The Backstory

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Fitbots was born with the aspiration of bridging the thousand slips between strategy to execution. Time and again, companies see the strange signs of strategy decay. The powerful Mission, ambitious vision- a thought picture of the future and the strategy seemed like words which could be remembered by those close to the corner office. So, we built Fitbots, an integrated OKRs software with coaching, to help 1000s of teams come together to aspire to achieve more together.

Much like the story where a monk travels and sees three bricklayers. The Monk went on to ask the first, ‘What are you doing?’ ‘I am laying a brick’ came the response. The second lamented, ‘A wall’ and the third with profound judgment ‘I am building a palace’. OKRs help teams think about ‘the palace’, a shared commitment, outshining individual brilliance.

OKRs help you envision the palace.

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