The promise of OKRs lies in the framework’s ability to stretch our thinking; moving beyond the day-to-day and dreaming big of an ideal future. We aim high because we want to dramatically improve the status quo, perhaps making a 10x improvement, or vaulting to world-class performance. But it’s not enough to just think big when concocting the objective. We must match that aspiration with key results demonstrating whether we have indeed achieved our lofty aim. Therefore, we can define a key result as a quantitative statement that demonstrates achievement of a given objective.
There are two types:
- Metric Key Result: This is what you might typically think about when considering a key result. Metrics are usually represented by percentages (Increase employee engagement from 75% to 95%), by raw numbers (Reduce lost time accidents from 30 to 10), or by dollar amounts (Increase revenue from new products from $1 million to $2 million).
- Milestone Key Result: These key results are binary — you either meet them or you don’t. For example, “Introduce a new employee onboarding process by June 30.” There are innumerable potential examples of milestone key results.
Over the years I’ve encountered a number of OKRs “purists” who insist there is no place in the model for milestone key results. According to these pundits, you must focus exclusively on metric key results that indicate business value or impact. Anything less and you risk, in their opinion, turning OKRs into a glorified to-do list. I have to disagree. Outlined below are a number of reasons you should, when necessary, include milestone key results as part of an OKR.
The impact you’re striving for is new
So many people read Measure What Matters and think, “Oh great, I’ll suddenly have all these outcome-based metrics.” But they forget they’re often starting from point zero, and milestones have to precede metrics. I’ve witnessed organizations become discouraged because of this fact and abandon OKRs, but that’s the worst possible, and least rational, reaction. The fact that you’ve outlined gaps in your execution is a good thing! These are strategic blind spots you have to fix, and you frequently can’t get to the outcomes without the steps (milestones) to fix them.
Virtually all of our clients who are new to OKRs write milestone key results. Often they’re necessary because the ultimate business impact key results they’d like to track have never been measured before. Thus, they need to start with a milestone. For example, we’ve had clients who are scaling quickly and have never measured employee engagement. To measure (and improve) engagement first requires the identification of an engagement framework, and next administering an initial survey. Both milestone key results.
Milestones demonstrate progress
Let’s say you have a quarterly objective to: “Improve our website to drive inbound leads.” Your key result is: “Increase inbound leads from 125 to 200.” That’s a very sound value-based metric key result. Here’s the problem. Are you going to sit back, wait the ninety days of the quarter to pass and hope you hit your number? Of course not. There are actions you can take to drive that increase in inbound leads, and they are often reflected in milestone key results. For example, in this case, since the objective noted improving your website, a milestone key result could be “Rewrite the Services and About Us pages of our site by February 1st.” This is a necessary input to driving inbound leads.
Who says key results need to have numbers?
In “The Essential Drucker,” the pre-eminent management guru of the 20th century, Peter Drucker, notes: A manager must be able to measure his performance and results… Those measurements need not be rigidly quantitative; nor need they be exact. But they have to be clear, simple, and rational. Mic drop, thank you Mr. Drucker. Simple, clear, and rational, that is the true test of effective key results.
Milestone key results can play an important role in the achievement of your objectives. Just keep a few things in mind as you use them. One: Always include a date. That’s how you’ll introduce stretch. How quickly can you accomplish the milestone, without sacrificing quality. Two: Ensure the milestones you choose predict or drive the business impact key result(s) you’re ultimately striving for. There should a causal connection between the two. Three: Accompany them with a business impact key result. The two types of key results should work together to tell the story of your success on the objective.
I’ll leave you with a quote from a recent client who, as with many of our clients, includes milestone key results as an important part of the OKRs process.
“One thing is clear from this effort: we have many gaps in our knowledge, so lots of milestone key results this quarter will help us get to better metrics that we can use going forward.”
Fortunately, this executive quickly grasped the power and potential of milestones, something I encourage you to do as well should you hope to derive the maximum benefits from your OKRs investment.