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Setting Objectives in OKRs

January 2, 2021 by Dustin

In this series on OKRs, we’ve been through the set up on what OKRs are. Now it’s time to begin crafting our OKRs.

Typically this happens during our strategic planning cycle. For small-to-medium business, this planning cycle might be something we do as a retreat-style experience at the culmination of planning. Or it might happen as part of a series of planning exercises, much like how I work with my clients.

So let’s look at my tips for actually crafting Objectives.

1. Define Your Objectives All At Once

The temptation is great to follow a pattern that looks like…

Define Objective… Define its Key Results… Define next Objective… Define its Key Results…

Wash. Rinse. Repeat.

Don’t do it. Just take my word for it. Don’t do it.

When defining OKRs, avoid context switching. Define all your Objectives at once.

Every time you move from “define objective” to “define key results” you make a context switch where your brain is focused on different kinds of information. And I’m pretty sure there’s a rule in physics that says “A brain in motion tends to stay in motion,” meaning when you’re focused on one type of information, it’s just easier to keep thinking about that type of information.

For that reason – and since we’re talking about small-to-medium businesses here – I like to break the OKR definition process into two pieces. I like to go through and identify all the Objectives first. Then I go back through each OKR and define all the Key Results. I find that staying focused at the Objective level allows me and the team I’m working with to “flow” better and identify more and better Objectives. But you do you. Give either a try and see what works for you.

2. Use Objectives for Transformative Change

Objectives should be used to bring about transformative change.

OKRs are meant to be used to create transformative change in your business. Put another way, they’re not meant to capture the work you’d be doing anyway. As a core strategic tool, OKRs are the tangible piece of your strategy that defines the work that will make a material difference in the trajectory of your business.

Right, so what does that actually mean.

It means that you should focus on defining Objectives that make you and your staff stretch and reach.. Your Objectives should be inspirational (also known to some people as “a bit scary” and to others as “scary as hell.”) Your Objectives should paint a clear picture of your business in a better place than it is now.

That’s a tall order. And that’s the point of Objectives.

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3. The 3 S’s – Specific, Succinct, Stimulating

Objective as specific, succinct, and stimulating statements of purpose and direction.

A great Objective serves to inspire people around a specific goal. To that end, Objectives are best when they are short, direct, inspirational, and paint a picture of the improved state in the future.

That means a short Objective like the following is perfectly fine:

Objective: Achieve Total Customer Satisfaction with Product Deliveries

If you’re new to OKRs, that Objective might make you nervous because it doesn’t sound like a goal. It certainly doesn’t fit the pattern of a SMART goal.

Objectives set the direction of the work in a specific, succinct, and stimulating fashion. The work of setting numeric goals – what you would recognize as SMART goals – is where Key Results come in. And that’s the next article.

Having said that, if you prefer to set Objectives using a SMART format, that’s fine, too. For example, this Objective could just as easily say, “Achieve CSAT (customer satisfaction) scores of 95% or better by end of Q1.” Depending on your perspective, that may sound more or less inspirational than the traditional Objective format.

4. Source Objectives from Strategic Planning Pre-Work

At this point in the strategic planning process, you should already have good ideas for the Objectives you want to craft.

If you’re to the point of crafting OKRs, in theory, you’ve already worked your way through some strategic planning pre-work. Inspiration for your Objectives would come directly from that work.

That work would include things like internal and external customer surveys, SWOT analyses, financial studies, and various other things.

If you haven’t done any of this pre-work, it’s certainly still possible to generate Objectives. Just keep in mind that yo might have some blind spots.

5. Size Objectives for One Quarter

Size objectives so they can be accomplished in one quarter.

I’m not strict about this.

But technically, one quarter is best. If you’re using my free workbook, you’re free to use whatever time frames work for you. If you’re thinking about using a third-party software tool for OKRs, know that some of them literally force you into one quarter time frames.

Think about it this way. If you’ve got an OKR that’s going beyond one quarter, chances are good you’ve actually got two or more OKRs. That is, chances are good you could split the work apart and make it more manageable. If so, you should break it down.

Bringing it All Together

Once you’ve flushed out a solid set of Objectives, you’re ready to move on to Key Results. Invariably, additional Objectives will pop up. Great. Write them down and keep moving. This is an imperfect process and the goal is to keep moving.

Speaking of which, let’s move on.

Back to Index | Setting Key Results in OKRs

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Five best practices for setting Objectives in OKRs.

Improved SMART Goal Setting, Now with a FREE Template!

January 2, 2021 by Dustin

At the time of this writing there are literally more than 600 million Google results for the search “s.m.a.r.t. goal setting.” There is literally nothing new to write on the topic and therefore absolutely no reason to write article 600 million and one.

Other than I refer to the concept a lot and whose article would I rather link to?

Introducing article 600 million and one…

But seriously… I’m going to attempt to do the impossible and leave you with:

One improvement over the same ol’ tired SMART definition.
Give you a simple template to use to spin your words and craft your goals.

Let’s go.

Why SMART Goals?

The idea behind SMART goal setting is that, when setting goals, your job is to be as clear and unambiguous as possible.

This helps you as the goal setter. It serves as a forcing function to ensure that you’ve set a quality goal. That is, a goal that is complete, has been well thought-through, and that just simply makes sense. When some component of the SMART formula is missing, sometimes but not always it results in a goal that is unworkable.

It also helps those people who are going to be asked to work toward the goal with you. It is critical they correctly understand the goal the same way you do, right? Imagine if you’re expecting the goal to be complete in three weeks and they are thinking three months. The resulting conflict is at least exhilarating if not productive!

SMART goals show up in general goal setting, in OKRs, and specifically in setting Objectives for OKRs, and in a variety of places. So let’s take our pass through the acronym.

The SMART Parts

Let’s dive through the acronym and see if we can improve on it.

Specific

This is, in my opinion as noted above, the majority of the value of SMART goal setting. challenge yourself to get as specific as you possibly can. Then drill deeper. Then drill deeper still. So like the Lean technique of asking “5 Whys,” drill layer after layer to get more specific.

Let’s take an example.

Increase sales this quarter by 25%.
1. Increase sales this quarter by 25% in the Pacific Northwest
  1. Expand sales to existing customers this quarter by 25% in the Pacific Northwest.
    1. Expand sales to existing customers in the Pacific Northwest through adding sales of related products, resulting in an additional 25% of new revenue.

I don’t know about you, but the first one is so unspecific it makes me nervous. And I’ll admit the fourth one is so specific it’s a bit prescriptive. But that can be okay. Regardless, point made. You can drill down and get specific, and that’s a good thing to do.

Measurable

A really like the concept of measurability and emphasize it a lot. Like, a LOT a lot. If you can create a goal that is measurable, it’s always better than one that’s not.

To get specific (ahem), we want to:

Avoid descriptive goals, like “high sales” or “low turnover.”
When possible, avoid “binary” goals, where things are either achieved or not, true or false. Sometimes it’s not possible to avoid these. For example, we might have a goal to, “Hire a new Director of Operations.” That person really is hired or they aren’t. There’s no, “a little pregnant,” and there’s no, “a little hired.”
Use counted or “discrete” data. Like “win five new customers,” or, “find 20 new leads.” Discrete data is just data that is counted in whole numbers where the data can’t be subdivided into smaller bits. (Please, do not divide your customers into bits as much as they may make you want to.)
Use continuous data. Continuous data are things that can take any value. These are things like, “time to close a sale (in days),” or, “average customer satisfaction rating.”

Making goals measurable makes it much easier to tell how you’re doing along the way, when you’ve achieved your goal, and if you’ve exceeded it.

Achievable

Ever have one of those projects where half the way through your customer moves the goalposts on you? Yeah, that’s no fun. Everybody wants to succeed. That’s why it’s really important to make sure that any goal you craft is actually something that can be achieved.

By “achievable,” I mean achievable within the laws of the universe, our society, and business generally. I don’t mean that you won’t have to work your butt off for it. And it may well be possible that at the time you craft the goal, the goal may not be achievable by you. But it does mean that you are able to see a plan whereby, adding resources, you are and/or will be able to achieve the goal within the time frame you’re setting out.

Realistic vs. Reach

Goals should inspire you to reach beyond where you are and achieve something bigger and beyond.

This is where I ~~kick it up a notch~~¹ (can’t use that – it’s trademarked) ~~raise the bar~~² (ditto) make SMART goal setting a bit smarter.

I’ll be honest, I’m not a buyer of “Realistic” goals. We just got done saying that your goals need to be “Achievable.” Aren’t achievable and realistic close enough to the same thing for you? They are for me and I don’t need dictionary definitions to back me.

What I would be a buyer of is actual “goals” as defined by Dictionary.com. Take a look.

Goals are the achievement to which effort is directed.

Now we’re getting somewhere. Take a look at how “achievement” is defined.

Achievement is a great deed accomplished through superior effort.

And here we have arrived at the shortcoming most SMART recipes have that we’re going to fix right now.

A goal isn’t a goal unless it causes you to REACH for something you don’t already have, do, know, possess, etc. Unless you’re reaching to improve yourself, your business, your condition, or the condition of whatever it is that you’re setting a goal about, you’re not setting a goal. You’re just setting an ordinary “task.”

So, dear Pivot Habitor, henceforth, SMART goals mean you REACH out in front of you to improve your condition.

¹ Trademark of Bruder Group LLC
² Trademark of Raise the Bar, Inc.

Time-bound

Pick a time, any time. Really – almost any time will do.

There is something about goals where they don’t become “real” until there is a time frame attached to them. Don’t believe me? Get your goal all set up to your liking. Then step back and attach a date to it when it must be accomplished.

One of two things will happen. Either you will feel energized and the time frame will make you feel committed.

Or you will hit the brakes faster than you knew brakes could be hit. It never fails. Goal setting goes great… right up until it’s time to attach deadlines. And then certain goals get parked.

You know what? That’s okay. The first thing I said at the start of this article was that a goal where all of the elements were present was better, more complete, and more thought out than one where any were missing. If attaching a deadline causes you to park the goal, then that was the outcome that is meant to be. For now.

SMART Goal Setting Template

Use this template for SMART goal setting.

There is an easy way to incorporate all of the above, and it’s to use a super-simple template.

Because I’m a fan of measurable goals, your first step is to pick some measure or metric that will serve as the focus of your goal — something that you want to change through the work of implementing your goal. With that in hand, just complete this template:

My Goal

[ Increase / Decrease ] < choose one

(insert measure or metric)

from ( starting value ) to ( ending value )

by ( deadline )

resulting in ( greatness of impact )

As an example, let’s return to our Pacific Northwest sales goals.

My Goal

Increase Pacific Northwest month-over-month revenue to existing customers

from $100,000 to $125,000 by the end of Q2

resulting in the ability to issue bonuses to the sales team for Q2 efforts.

I’m the first to admit that adhering exactly to this template is stifling. So don’t do that. Use it as an initial guide to get all your parts in order. Then wordsmith and re-arrange to your heart’s content./

Bringing it All Together

Hopefully, article 600 million and one on SMART goal setting has given you a new insight, made you a little smarter, and helped along the way. Reach out and let me know your thoughts.

OKRs as Strategy and Alignment

January 1, 2021 by Dustin

Objectives and Key Results provide a critical strategic bridging function, and create alignment within the business. Let’s break these down beginning with alignment.

OKRs Create Alignment

If you check out my article series on KPIs, you’ll see that KPIs roll-up. Beginning from Teams and Departments, KPIs roll up to a central view for management to have a centralized command view of critical data about the organization.

It’s easiest to view OKRs as having the opposite structure of beginning with central management and fanning out and down to departments, teams, and individuals. And indeed, there is a lot of truth in that. OKRs work best when they’re organized from a central vision that guides a picture of what is important.

It’s a mistake, though, to think there is no latitude for creativity, innovation, and expression as OKRs “fan out.” A department can and will have its own Objectives for its own critical issues.

In other words, there is no “rule” that every single Objective at any given level must be derived from a higher level. There is no rule that the higher levels “dictate” the Objectives of lower levels. What are true are three things:

The majority of OKRs usually arise from higher levels.
That is, most but not all of the Objectives a team creates are inspired by the Objectives of their Department. Similarly, most but not all of the Objectives of a Department are inspired by central management Objectives. There’s no rule that they must. It’s just how things work out.
OKRs should Align.
We’ve just learned that it’s okay for a Department, for example, to have its own Objectives that aren’t directly derived from higher-level OKRs. The important bit, though, is they still ought to be aligned with those OKRs. Put another way, any OKR a lower-level team sets should never contradict, work against, or counter-act a higher-level OKR. That’s really common sense and should go without saying, right? But I’ve seen it happen so it’s worth a mention. Usually, this is accidental rather than intentional. The moral of the story: review your OKRs across your business.
The OKR process should be bi-directional.
This is a truism about planning generally and strategic planning specifically. This is not advice unique to OKR planning. Even in a small business by the time you hit 15 employees, it almost never works to do planning in a top-down fashion. The leadership has blind spots that can only be informed by involving the line-level folks. For this reason, it’s important that the OKR process – and all planning, really – be bi-directional.

Let’s look at how this alignment is useful to strategy.

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OKRs Fill the Need for Tangible Strategy

OKRs build the bridge of strategy between a) the vision you have for your business, and b) daily execution. Let’s unpack that.

With a little work, it’s doable to have a relatively clear vision for your business. I find most business owners have some sort of vision for the changes they want to make and where they want to go. They might just need a little assistance making that picture clear.

And most folks are solid executors. They get things done. Put 30 tasks in front of them, they’ll knock them out. They’re good at getting things done and that’s why they’re in business for themselves.

The key challenge is bridging the gap between that vision for where we want to go and the changes we want to make and translating that into daily execution. Making that leap is surprisingly challenging. This is in no small part because:

“Vision,” even when clear, can be squishy and body-less. It just doesn’t have tangible action tied to it.
We’re just so busy executing on a day-in, day-out basis that it’s easy not to prioritize the changes we want to make. Especially when those changes are squishy.

That’s where OKRs come in to fill that strategy gap.

Just to review: “Strategy” is determining the direction of the business as well as the methods we want to use to get there.

So OKRs are perfect for that.

Objectives are the statement of direction and goal. Key Results, in stating the work that must be accomplished in order to accomplish the Objective, clarify the methods we’re going to use to reach the Objective. So OKRs slide perfectly into that gap between vision and execution and fill in the necessary information.

OKRs spell out the actual work to accomplish for transformation.

If it’s not immediately obvious how valuable that is, let’s peel the onion one layer deeper. Once you’ve got OKRs standing in as your statement of strategy, you’ve got tangible work identified that will move your business closer to your ultimate vision. That work is not your every day normal execution work. That work is the work of transformative change to your business – making your business better. That work is what is captured in the Key Results. But by making that work tangible, it becomes much, much easier to bring that work into your regular schedule. That means instead of “we’ll get to implementing our vision someday,” today is the day you make your business better. Literally, implement OKRs, and today is the day.

How cool is that?

Back to Index | Next: Setting Objectives in OKRs

Four tips for using OKRs to create strategy and alignment.

What is OKR?

January 1, 2021 by Dustin

Objectives and Key Results, or just OKRs, are an incredibly valuable strategic planning tool. Let’s dive in to learn more about what they are and how small-to-medium businesses can apply them for maximum impact.

What ARE OKRs Exactly?

There’s what they are, and there’s what they’re made of.

Regarding what they are, OKRs are the goals for transformative change in your business. Put differently, OKRs capture the change you want to make in your business.

To break down what OKRs are made of, Objectives and Key Results are made up of… wait for it… two parts, Objectives, and Key Results. (I know, right!?)

Objectives capture your actual goals in simple and compelling terms.
Objectives identify the specific transformative changes you want to make in your business. The job of an Objective is to make it super clear to everyone what direction we’re aiming toward. I dive deeper into this and give examples in the article Setting Objectives in OKRs.
Key Results lay out the chunks of work that must be accomplished in order for the Objective to be met.
Again, in the article Setting Key Results in OKRs I deep dive, but the idea is that Key Results provide the top level outline of the work that must be accomplished. When every Key Result is accomplished, the Objective has been accomplished, too.

And that’s why OKRs are so powerful – because of the role they play in the business.

What Role do OKRs Play?

OKRs build a bridge between vision and execution.

OKRs are the bridge between vision and action. They provide the glue of strategy. Think about that for a moment and let’s unpack it a bit.

It’s relatively easy to figure out what you want to change about your business. And with a little effort, it’s usually doable to turn that into a clear picture – a vision of the future. But when it’s time for the rubber to meet the road, there are usually at least two problems that rear their heads.

Daily work of the business gets in the way and it’s hard to focus on change.
A vision of the future isn’t the same thing as an action plan of how to make it happen.

OKRs solve that by bridging the gap. Through Key Results, OKRs don’t necessarily identify every Action Step, but they identify enough to make the work tangible and real. And in accomplishing that, they create work that can be scheduled into and reviewed as part of the daily work.

So OKRs are 100% a strategy tool in that they help set the direction of transformative change as well as determine how to make the change happen. But in being a strategy tool, they also bridge the gap between vision and action, making it much easier to accomplish big goals.

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How Do We Use OKRs?

As you may have guessed, the next few articles are going to walk you through some techniques for how to establish OKRs. But the question becomes once we’ve got OKRs established, how do we use them?

Pay special attention to the following two articles as they spell out how to make maximum use of OKRs:

Setting Key Results in OKRs
As you’ll see, Key Results establish the categories of work that need to be done. It’s these categories of work where all the action is and therefore where a lot of the power of OKRs resides.
OKR Review Process
Once you’ve got OKRs set up, committing to a cadence of review gives them life, energy, and the power to transform your business for the better. The rituals of review I talk about here are a critical piece in that puzzle.

Bringing it Together

With this article, you should have a beginning of a picture of how OKRs can integrate with and transform your work and your business. The other articles in this series will help bring this to life. And when you’re ready, check out my series on KPIs to really bring things alive.

Back to Index | OKRs as Strategy and Alignment

OKRs vs. KPIs, Similarities and Differences

December 30, 2020 by Dustin

Metrics combine two or more measures to provide context and more information.

Objectives and Key Results (OKRs) are great tools that big businesses use in strategic planning and execution. They’re also great tools for small-to-medium businesses to use to compete and perform like the big dogs. But it can be easy to confuse OKRs with KPIs. Let’s take a look at the similarities and differences and get a handle on each, and why you need both.

	Objectives and Key Results	Key Performance Indicators
Structure	List of overarching goals and, for each, indicators of success	List of measures & metrics
Data	Quantifiable and Activities/achievements defining success	Numeric/quantifiable
Orientation	Bi-directional alignment. In smaller companies, tend to be management-driven.	Roll up from teams and departments to central management
Timing*	Forward-Looking	Current & Past Performance
Role/Use*	Strategic Planning & Forward Management	Operational Management / Execution; Check performance
Redefinition Frequency	Frequently – Every quarter, or at least every year.	Infrequent – Annually or every few years.
Core Purpose*	Drive Dynamic Change & Improvement	Guide Daily Execution

If you walk down the table above and compare and contrast each point, you should have a really good idea of the purpose and use of KPIs vs. OKRs and when to use each.

What About That Pesky Asterisk*

There’s just one catch. I have high expectations of myself and my clients. I don’t use Key Performance Indicators quite the way they’re intended. What’s the fun in that!

There are three items in the chart above that have asterisks:

Timing
Role/Use
Core Purpose

Because I have my clients go beyond identifying KPIs to also define a Performance Budget, in the Pivot Habit method, KPIs become:

Timing – Past performance, current performance, and forward looking.
Role/Use – Strategic & Forward management as well as execution management.
Core Purpose – Driving dynamic change as well as guiding daily execution.

Back to Index | Next: Benefits of OKRs

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Download the OKR Workbook

A comparison of OKR features vs KPI features,

KPIs as Strategy and Alignment

December 30, 2020 by Dustin

There is a normal way to use Key Performance Indicators, and a way to get a bit more “juice” out of the process. The “juicier” way brings KPIs into the strategic planning and alignment process. Let’s take a quick look at both.

KPIs, the Normal Way

If you’ve been through my other posts on implementing KPIs, you know that at their heart, KPIs are simply measures or metrics. Done well, they focus not only on outcomes, but also on the actions that lead to positive outcomes.

In this way, KPIs are the most critical and vital data points about the business. Indeed, part of the best value KPIs provide is that they clarify so much information about the business in so little time. But left as data points, they are just that… just data points.

KPIs as Alignment

KPIs create alignment between employees and what matters most to the business.

There is one critical function KPIs provide on their own as simple data points: focus and alignment. By identifying the most critical data points about the company, everyone is automatically clear about what matters, how it’s measured, and where to focus effort.

Perhaps it’s just my experience, but the last time I purchased a vehicle, it was very clear what my sales associate was focused on. You may be thinking, of course, his focus was “making the sale.” But it wasn’t. I don’t know whether it was just this particular brand or this particular dealership, but someone finally realized a truism: If I’m present in a car dealership, chances are great that I want to buy a car, so stop worrying about trying to sell a car, and start focusing on discovering and addressing my actual concerns.

The sales associate took pains to uncover my real concern: the model I wanted wasn’t going to be in stock before my lease ran out. He arranged a loaner, at no cost to me, for whatever duration until the model arrived, if I’d agree to the sale.

Fast-forward three weeks of free vehicle rental later, my sales agent didn’t need to remind me of what I already knew. Following the sale, I would receive a survey from the automaker about the level of service I had received from the dealer, and high marks are critical. How do you suppose I scored my dealer experience?

Good KPIs align attention, behavior – everything – toward what is important.

KPIs as Strategy

Introducing goals to KPIs make them a powerful part of the strategic planning toolset.

But we can take KPIs further and use them as tools in the strategic planning and execution process simply by adding goals. I want to be careful here to draw a distinction.

In my method here at Pivot Habit, if you use my worksheet and what I outline about creating a Performance Budget, you will in fact create monthly “Plan” numbers for every month of your planning period, and for every KPI. By default, this is nothing more than “forecasting.” That’s not the same as strategic planning or goal setting. Let’s draw the distinction.

A forecast is simply a prediction of the future trend given current conditions and effort. For example, if last year you did revenue of $10M and you’ve been growing at about 10% per year, you might forecast revenue of $11M this year and break out monthly plan numbers that show that. That’s your forecast.

Strategy and goals come into play if you’ve got something new up your sleeve this year that means that $11M forecast doesn’t cut it. For example, maybe your strategy for the new year is to introduce a new product line. Your research shows strong early demand, and you’ve set a goal for $1M of new revenue for the first year.

You might choose to represent this revenue as it’s own “New Revenue” KPI, wrap it in to overall revenue and map out $12M in revenue for the year, or some other way. The point is now you’re not just forecasting against current conditions. You’re adding in goal setting which is all about changing conditions for an improved result.

Back to Index | Next: KPI Cadence and Time Frame

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How KPIs fill the gap to provide strategy and alignment for management teams.

KPI Pitfalls and Mistakes

December 30, 2020 by Dustin

While setting up Key Performance Indicators isn’t usually a high difficulty project, it’s also not difficult to make mistakes and trip into common pitfalls. Let’s examine some of the most common so you can avoid them.

Going BIG too early
Occasionally, I’ll see a client define a really solid set of KPIs. No, really – a really solid set where all the KPIs are spot on, everything matters, there’s nothing missing. Everything is exactly right.

There’s just way too much to get started with.

For a small-to-medium business new to managing with KPIs, it can be overwhelming to go from no KPIs to all the sudden having a dozen or more (many more sometimes) per department, rolling up to central management. Sometimes it’s best to pace yourself and introduce KPIs over time.
Creating too many KPIs
As opposed to the previous answer, it’s also easy to just go overboard and over do it when implementing KPIs. It’s easy to want to measure everything under the sun. You can convince yourself that you really do need every single measure and metric. But the question is do you really? For most of the clients I work with I provide the gentle reminder that they’ve been working “okay” this long without KPIs, and true, while using KPIs will greatly accelerate performance, it doesn’t follow that they absolutely without a doubt have to have every KPI under the sun.
KPIs that don’t matter
One of the biggest reasons for too many KPIs is adding in measures or metrics that quite simply just don’t matter. For each KPI, it’s important to ask two questions:
1. How long is it going to take to gather and present this data point, and is it worth that effort?
  
  Occasionally, some data points are interesting but just not worth the effort.
2. What action will I take based on changes in this data?
  
  If you’re not going to make any changes or take any action, do you really need the information? Usually, the answer is no. Sometimes, the answer is there is a different KPI that already answers the question from another angle. Re-think your data point and your question.
Missing critical KPIs
This point and the next are related. Your first pass at establishing KPIs will not be your last. Based on my experience, the likelihood is high that you will forget at least one KPI that, as it turns out, is extremely important to the business. Sadly, we’re human and it happens. Let it happen. Get started with what you have and review to add what is critical yet missing.
Waiting for perfection
It is very common that a few KPIs you really want turn out to be challenging to collect for some reason. Great – get started without them. Do not wait. Mark my words, if you are told the data will be available in two weeks, two months will elapse. Do not wait. Get started with what you have and tune/add/substract KPIs later. Perfection is the enemy (said to you by an ever-recovering perfectionist).
Failing to set a Plan for your numbers
Create Plan numbers for your KPIs. For every month. Make it so that you have planned performance that you can review every month in order to checkpoint performance.

Note that technically I’m not saying “set goals” – I’m merely saying set your plan numbers. Remember that you don’t have to set an improvement goal for every KPI. But it’s a great practice (a best practice, even) to have a plan and check performance on a formal cadence.
Failing to review performance against KPIs
If you do not establish a formal monthly review ritual and periodically informally review performance, don’t even bother setting up the KPIs. You’re wasting your time.

Back to Index

Download the KPI Planning and Tracking Worksheet

Save hours of work by starting with a pre-made Excel Workbook featuring examples, explanations, and built-in calculations.

Download the KPI Workbook

The top seven pitfalls and mistakes to avoid when using KPIs.

KPI Cadence and Time Frame

December 30, 2020 by Dustin

If you happen to hit this article first without going through my other articles on KPIs, the idea of KPI cadence might make sense. But chances are KPI time frame might not register.

Let’s take these two elements of time and KPIs and work out the kinks.

KPIs Have a Cadence

Key Performance Indicators have a natural cadence to them. Actually, in my book, there’s a formal cadence and an informal cadence.

Formal Cadence

When I coach clients, we absolutely establish a formal cadence of KPI review, monthly. That is, we have an established ritual every month wherein we review KPIs against plan for actual performance, calculate variance, celebrate success, and apply any corrective action needed for any short falls. This process is absolutely critical to transforming KPIs from a “make work” exercise to a critical piece of managing the business and transforming performance.

The reason this is a “formal” cadence is because:

This is a planned ritual, calendared for all involved, and sacrosanct: It must happen without fail.
It is recorded for posterity, becomes part of the company record, and is referred to as a historical record. It is “official.”

That is not to say we don’t look at performance more frequently. We absolutely do. That’s where the informal cadence comes in.

Informal Cadence

Some teams and businesses look at KPIs as frequently as daily. Sales organizations are a great example. Software development teams are another. Still other teams may review KPIs weekly, bi-weekly, etc.

These reviews are very important and can be critical to running the business. Some may even become Formal in their own right. Most, though, are not. Most are simple checkpoints to check progress along the way.

They key difference is what’s done with the information.

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When Used as Strategy, KPIs Need a Time Frame

KPIs used for strategic planning also have a time frame.

Remember, left on their own, KPIs are just data points. They just provide information about performance and outcomes.

You can bring KPIs into your strategic planning process by giving them a goal.

Anytime you’re going goal setting, that’s where having a time frame comes in (remember the “T” in SMART stands for “time-bound”). So let’s get specific about what makes for a good time frame with KPIs.

Here at Pivot Habit, I coach my clients to:

Forge a 10-year vision.
Look ahead 3 years.
Build a clear 1-year plan.
Calibrate quarterly.
"Plan to Pivot" monthly, making small course corrections to maintain strong control over performance.

Coming back to KPIs, the question of which KPIs we measure and how should seldom change. The slate should be stable, changing only by need.

The real issue of time frame comes to goal setting for KPIs we’re using in strategic planning. My advice is the same as with all other strategic planning time lines: Aim for most goals to fit ideally within one or two quarters, and none longer than a year. This aligns nicely with your planning and review cycle.

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