Demystifying OKRs: Practical Insights for Product Managers

Speaker A: It's time for another podcast where we talk about the practical side of product management. Theory is great, but we need to talk about how do you take theory and make it practical? And I think today we want to talk about OKRs and metrics and what that looks like for product people, and also how it rolls into broader organizations and building work structures. What do you say, Marilyn?

Speaker B: I love it. Let's do it.

Speaker A: Okay. I say Y. So okrs love them or hate them?

Speaker B: Yes,

Speaker A: exactly. Me too. Check. Next. Next topic. This podcast is over. Thanks for coming. Okay, say more about your love or hate of. Of okrs.

Speaker B: So I think there's this, like, um, there's just, like, this myth around, um, okrs that they're gonna, like, save everything. And I'll tell you the reason why this came up for me now. Um, I was. I got this book. It was sent this book, um, which is called who does what by How Much? Um, written by Jeff Goth else and Josh Seiden, who are two of my favorite people to sort of like, um, have a conversation with. Other than you, of course. You're my very favorite. Um, and I think that, uh, okrs kind of are held up as, like, this, like, mythical unicorn. If you just do okrs. Just do them, um, then all will be right and you'll be driving the right things for your business. Um, and I think that product managers and product leaders in particular are often asked to, um, like, what is your metric? What's your KPI? What's your OKR for? Like, how are you measuring, like, progress against your goal? Because we don't want to tell you what features to build, but you should be moving a needle. Um, and so it's almost like this weird holy grail of thing. And if you do this thing correctly, if you in a corner do this thing correctly, then magic things will happen. I actually think it's a little more complicated than that. Uh, and I have seen OKRs in a number of places, um, that have been successful, um, that have had an impact on the overall business. And I have seen OKRs not work very well. And I have. I mean, I think there's probably, like, stories galore in between.

Speaker A: Yeah, of course.

Speaker B: And I often wonder to myself if it's kind of like if okrs are not, like, the product or business leaders version of the Angel Manifesto for engineers. Like, it's kind of a loose framework, and if you get it right, magic things will happen. But if you screw it up, you suck.

Speaker A: Right. Well, and I think it's it. To me, it does remind me of that whole, the whole concept of agile and how you do it and what's the right way to do it and what's the wrong way to do it and are you doing it and if you don't do it, are you really, uh. Oh my gosh. Right. Like shut up. That's my first reaction. But I agree with you 100% because ultimately what I always say about Agile, I also feel about okrs. It is a way of communicating.

Speaker B: Yeah.

Speaker A: It is a communication method. If it doesn't work for you, communicate better or do something else. Yeah, right. Same as Agile. Like if, if running hardcore scrum works for you, awesome. If it doesn't, try something else. You can still do other agile things. Right. You can use some of the pieces, do something else and we can talk about agile some other time. But I'm the same way with okrs. Like they sort of to me felt like they just kind of came out of nowhere, which I know isn't true, but 10 years ago I wasn't pay paying any attention to them and then all of a sudden it was all the talk and Everybody was doing OKRs and I was like, okay, awesome. You know, so I tend to agree with you. I think there is. It's a framework. You can do it well, you can do it poorly and you can do it everything in between. Yeah, right. Um, but I get the sense that Sometimes we treat OKRs like they are going to replace something. Do you agree with that?

Speaker B: 100%. Like we no longer need to have our management practices because now we have okrs.

Speaker A: Right? Yeah. And, and I, so my experience, I'll quickly go through my experience like a couple, couple notes. Like the first time I was ever somewhere that we used okrs was at a startup that I, that I was part of the leadership team of. And I was okay with it. I was a little like, yeah, okay. But for me it was ultimately sort of used to drive, try to drive my roadmap. Instead of us having a plan and then measuring the things like a vision and a mission and a strategy and then measuring the strategy, it was like build me this. And I was like, no, I'm not a kr. That's not a kr. Yeah, it's not. And so that was one way. And then I went to briefly, I worked somewhere that is sort of the, the you know, OKR heaven. And I saw it totally misused to like fundamentally people were towards the end of a quarter trying to go in and recalculate things and you know, so that the score would be at at least three fourths. Like, we want to get 75%. Like, that was what I saw. And there was this undercurrent of, I'm doing this because it'll impact my performance management. Um, and so those were the couple of things I saw. So as I. As I mentioned to you before, in the aftermath of that, I was like, I'm not gonna hate this tool. I'm gonna go learn more about it, because that's kind of how I do when I don't like something. So, um, I took this course with

Speaker B: me because, like, we started on the wrong foot.

Speaker A: I'll learn more about it. I want to spend more time with it. Right, exactly. But so I ended up taking course last year, two courses actually, last year, to become, like, an OKR facilitator, because I wanted to know the intricacies of how you do it well, and I was like, oh, yeah, this is a pretty good tool. This could be good. So that's my fundamental experience. It's kind of these three different views. Big tech company, startup, both those misusing it and then learning about it and going, oh, yeah, I could use this. I could do this.

Speaker B: Yeah. Uh, I, um, think that, you know, okis really came into fashion, uh, when John Doerr's book came out and everybody was like, oh, you know, if this guy says, then we must actually think this is a really, um, this is this. That sort of, like, thing really calls back to why we're having this podcast where, like, yeah, it's. Yes, this is a tool, but you need to understand the purpose behind it and do the work up front, because you cannot just take the framework or the tool and plunk it on and be like, we're good. There's, like an element of practicality. Um, so the first place I really got grounded in okrs, it was brought in by the CEO.

Speaker A: Yeah.

Speaker B: Uh, and she actually paused metrics. There's a lot of people created a lot of metrics that made everybody look good. Because that's. That's really what happens. Right? People, um, people create metrics that tell the right story, um, but in aggregate, they don't tell you how the company's doing.

Speaker A: Right.

Speaker B: Um, and so because everybody. Your point. Wants to get up and to the right on the metric if it's good, because that impacts your bonus. And then, you know, we're humans. We are going to do the thing that gets us the little pellet when we push the. Push the lever.

Speaker A: We're human who behave like hamsters.

Speaker B: Exactly. We're basically giant hamsters. Uh, which means we all get to drive those Kia, whatever they were. Exactly right. Um, she actually stopped the, the whole management team and said, hey, there's probably seven metrics that we need to measure as a business that in aggregate will explain if we're successful and, or not and in harmony like those seven. Uh, and it really followed for that company the traditional E Commerce flywheel, which is like, you know, we need to make people aware that we exist and attract them to us. Um, we need to make, we need to have a way to convert them into using our product. Uh, we need to, um, we need to talk about, you know, the purchase path or, you know, what's the path from awareness to conversion. Um, which probably is some sort of engagement. Um, we have to make sure there's loyalty. Right. So how are we bringing them back? And then we have to monetize what we've got. So she had this for like 7 high level metrics that really followed the flywheel and then okrs fell out of that. There was high level goals and then all teams had to like, how are you serving these goals, yes or no? And there was this, there was this whole kerfuffle about like, well, but my team doesn't fit in any of these.

Speaker A: Right.

Speaker B: And then as a company you kind of have to say, yeah, so either we're missing a high level metric or perhaps it's something we shouldn't be doing right now because it's not where we want to go at the stage of our business. I think that was the hardest, like conversation. Um, especially across the product and engineering teams because product people care about their problems.

Speaker A: Right.

Speaker B: They're like, this is, this is the most, the most important problem to me. Um, but realistically it might not be the most important problem to solve from a company perspective.

Speaker A: Right, right. Um, and then you have a decision to make. Like any, you have a decision to make to say, you know, do we not do it or do we call it something else? And it doesn't get the priority. Like in my mind most of the time it should be, we don't do it unless you're, unless you're just flush with cash.

Speaker B: Yeah, right.

Speaker A: And most people aren't. Right. If you got time and cash, spend away. Right. Which quite frankly is I think what has happened to some places like Google. Right. They had so much money that they were just spending and so suddenly OKRs are a little less important, but everybody's got to have them.

Speaker B: It's a requirement.

Speaker A: Right. And it's like, is your thing that important thing you're doing? Does anybody else care about it? Right.

Speaker B: Yeah.

Speaker A: And so I think. I think that you can. It can kind of get away from you. Right.

Speaker B: Because everybody needs one. They're important. That's how you get a bonus.

Speaker A: Yeah.

Speaker B: I do think thoughtfully, like, saying, hey, you know, this is our core business, and these are our, you know, one or two growth engines. And then here's a set of moonshots. Like, that's also a perfectly fine, acceptable. Um, but how you measure those areas is different. Right. So moonshots, you're going to want to get. You know, you may invest for a little while to get an answer. Um, growth engines, man, you better be doubling down on those, because that's where you're going to grow in two years, three or four years. Right?

Speaker A: Yeah. Um, I think it can. It can sort of nip in the bud, this bad behavior of. Everybody thinks their thing is the most important thing, and they will use this, like. But it's important to the CEO. And I'm like, okay, great. But it's not on the. That's. That's fun. That's fantastic. But he told me these were the only three things we cared about. Yes. So, um, I like your thing. It's interesting, but I'm not gonna give it any attention because I've got to give all of my attention to these three things. Unless you would like to get him to come tell me we're gonna add a fourth him or her. But it's always been a him for me in that scenario.

Speaker B: But I've been lucky enough to have one her so far. And I'm like, I think this should be. I think that's this. This conversation that we're having right now about hims and hers. Like, hopefully that. That. That time tips a little bit at some stage.

Speaker A: I mean, I did this. I did product manager for 23 years, and I never worked for a female CEO.

Speaker B: Isn't that crazy? Like, let's divert that conversation just for a minute. But when you, like, you know, as. As usual, um, I'm the person that tends to be tact or just maybe just because I'm passionate about it, to talk about diversity and tech.

Speaker A: Yeah.

Speaker B: Um, and how we change it. Um, and when I talk about the hard things, like, how are we fostering people, how are we leaving, how are we making this a space where women can succeed without trying to become masculine? Um, or how do we make this more inclusive so it's not just, like, tick the box on gender or race or whatever. Um, you know, this is where the hard conversations.

Speaker A: Anyways, diversion.

Speaker B: Let's go back to okrs.

Speaker A: Another. Another topic for another day. Yes.

Speaker B: Okay, so okrs, like, listen, I think that, um. I think that one of my philosophies on OKRs, and I'd love your opinion on this is, um, because they're a shiny object. Right? And we're gonna do okrs. Um, people often start with them for product in isolation because, you know, that's where the investment is. So product managers are, like, told to go get an okr. Go get your okr. Um, and, uh, sometimes the engineering team gets included, sometimes design gets included, Sometimes it's like sales or whoever else is in the company. But often it's just this poor sucker of a product leader and like, six product managers that have to make up, uh, define and measure what they think are the okrs. In isolation.

Speaker A: Right. 100%. No, I think I've seen both those things. Right. I've. I did some. I did some, uh, consulting with a company where they were like, we're doing okrs. And then I. When I went in to look at it, I was like, I mean, you're not doing OKRs. These three people are doing OKRs. All your product team is doing okay. The rest of you don't seem interested. Right. And it was. They were like, what do you mean? Right? I was like, has to be the whole organization. Right. We're not. They're not doing it for their health. They're doing it for the organization.

Speaker B: Yeah. So accounting okrs, and.

Speaker A: Yeah. Uh, what are you guys being measured on? Right. Because I want in on that. If I'm the product leader, I went in on whatever you're being measured on, because I'm pretty sure I'm facilitating it. Right. And. And I think what I. Part of the conversation we had was around. I mean, I felt like I peeled it all the way back to operating model. Let's have an operating model discussion. What does your product team do?

Speaker B: Yeah.

Speaker A: Like what? Why are they here? What is their role? And how are they tied to the mindset of the whole company?

Speaker B: Yeah.

Speaker A: And I mean, I felt like I had to, uh, boil it all the way back to there so that everybody would go, oh, we all have to participate in this.

Speaker B: Yeah.

Speaker A: Right.

Speaker B: Yeah. Yeah. Ah, I think. I mean, I think that's one of the. That's one of the biggest things is there's. If you're going to do okrs, it starts with the CEO and the C suite.

Speaker A: Absolutely.

Speaker B: What are the Metrics you need to run your business. Everybody's going to fall under these metrics. No one escapes.

Speaker A: Yeah, yeah.

Speaker B: Um, and how do you measure success as a business?

Speaker A: Exactly the opposite of that is that this startup that I was mentioning before, man, the OKRs belong to everyone else and I was in service to them and so they would make all these promises about what they were going to do and I was like, hang on, hang on. How are you gonna do that OKR in isolation? Well, this is what we need to do, right?

Speaker B: Who's gonna do that?

Speaker A: Who's gonna do that? I remember sitting down with the co founders and being like, you see these okrs, this list that everybody's come up with, this was like, everybody put it all in the pot and we'll discuss it. I was like, these are these 50 things you need, my team, 45 of them. So how are we doing that? I need it dialed back and I need us to have a plan. Like it can't be. To kind of your point, it can't be product management in isolation and it also can't be product management and service.

Speaker B: Yes.

Speaker A: That's why it's about the operating model 100.

Speaker B: I, uh, you know, I've seen a lot of companies go into what, you know, the three to five year planning because you know, every year you kind of do your three to five year plan, um, to see what the next three to five is going to look like. But they don't include technology until later. Just not sure how that works.

Speaker A: Genius.

Speaker B: Because like how are you going to accomplish some of these things? Like I get it if, like I get it if you don't need your systems to change or like let's, let's say you're a super mature business and, and you're really sort of at like no more investment. In a technology perspective, you don't need to innovate. Uh, maybe you've solved, maybe you solved your little niche. Um, then sure, right. It's about putting more salespeople on the street. But, but I think in this, in this era, especially now of where technology is moving so fast and we're starting to try to hyper augment humans, right? How do we help our humans be more successful? Leaving some of these conversations until, oh, later because they're just a dependency is like, I don't understand. I don't understand.

Speaker A: I don't either. I don't either. Because it's, if it's not fundamental to what you're doing, why are you doing it? Like outsource it, buy it off the shelf, figure out how to do it another way. Why do you have a team that's that expensive if they're not essential until you bring them in at the last minute and say, can we do this, everybody?

Speaker B: It's not even, can we do this? It's like, but I need this by. You know, it's six weeks. I need. I need a thing that I don't really want to take the time to explain to you because I've already talked about it for four months.

Speaker A: Yeah, yeah, totally. Like, wait, here's. Here's my requirements. Okay, well, that's. That's extra large. It can't be extra large. Right. It's like, oh, get out the T shirts. People play the game, right? Yeah, no, 100%. 100% agree. Like, I think it. I mean, it's back to the conversation of it requires communication and dedication to a framework and a team. Framework.

Speaker B: Yeah.

Speaker A: That is inclusive of all the part moving parts. Right. It can't just be these little isolated silos who go off and say, I'm gonna do this. Good luck, best wishes. Right. And I think. I think sometimes it puts. I think because that can happen, it then puts the tech team in the seat of being, like, holding people hostage.

Speaker B: Yeah, yeah. Or the bottleneck.

Speaker A: Yes. You're like, can't be true all the time.

Speaker B: Last time, uh, last time I checked, you don't get issued, like a bottleneck card or a big fat jerk card when you. When you start to work in technology. It's not. It's not actually part of your employment. You're just put in this con. You're put in this. Where you're a key driver, but you're an afterthought.

Speaker A: Yeah. Yeah. I mean, the phrase. I think it is the place where the phrase we need you to go faster is born.

Speaker B: Ugh. Uh, yeah.

Speaker A: How? Based on what? That's always my answer to that question. Faster. Based on what? Yeah, well, we need it faster. You should have told me sooner.

Speaker B: Can we have helped you with the definition of.

Speaker A: Exactly. Exactly.

Speaker B: Because, I mean, I saw this years ago at a travel company that we both worked at a very long time ago, um, where if someone comes in with a set of things and is like, here's the thing, I want A, B, C, D, E, F. Um, more than likely, the person who's driving the business requirements. I'm doing this with fingers. Business requirements. Has thought of the most complicated way to achieve that goal.

Speaker A: Right.

Speaker B: Um. And when we stopped people and said, listen, um, listen, friends, we're Going to do something crazy. And we're going to actually have you describe the problem to the engineering team. I'm going to put all the engineering team into a room. You're gonna unpack the problem, you're gonna talk about the metrics you wanna move, and then we're gonna do a little bit of game day stuff where the engineers are gonna come up with all of the ways they can solve this problem. You're gonna talk about whether it meets their needs, yes or no. And then we're gonna give everybody enough money to not buy a feature.

Speaker A: Right.

Speaker B: And then we're gonna see how you guys come together to pick what we're gonna build. And I think that the people that had been previously just sort of like throwing over documentary requirements realized there's probably six, seven, eight ways to solve the problem. And by not having the conversations early enough and by not bringing the engineering teams in soon enough, they were actually making things far harder for themselves. Um, and if you like bring engineering all the way into the problem space, you actually can get some really innovative solutions that will, uh, unlock your business or deliver at least partial incremental value sooner.

Speaker A: Right.

Speaker B: Which gives you money to run your business.

Speaker A: Exactly. And I think we forget that part of the brain power of the engineering team, the designers, the product manager, the product development team, but certainly the engineers themselves is the puzzle creation. We stand here, here are the pieces, we want to go there. And from our business mind we're like, it has to go this way. And from the engineering head they go, I mean, I could go 15 different ways there. What do you want? Fast, beautiful, high quality, what do you want?

Speaker B: Right.

Speaker A: It becomes this game of, um, how do you want the puzzle put together? And you need. That is why the diversity of thinking is so important. Diversity of thinking has to be in your mind before you even start to think about diversity of people.

Speaker B: Yes.

Speaker A: Like, you can't tell me like, ah, uh, solve the problem of gender and race and all these things. If you're not even willing to talk about diversity of thought, how we think about problems, Start with me there and I'll, we'll work, we'll work on the other problem. We'll get there. And I think that's where I 100% agree with you. I think we have to bring that, that conversation has to come together in order to really use tools like okrs. Yeah, right.

Speaker B: Okay. So you were the biggest skeptic of OKRs.

Speaker A: I was.

Speaker B: Talk to me about the, the one or two things that really were the unlock for you Being like, yeah, this all right. This isn't as crap as I thought it was.

Speaker A: Yeah. When I realized there were a couple really, uh, I think a couple things. I think the way I had seen it done the. And had participated in it, there wasn't a clear leap between sort of the O and the KR. Right. And it felt like we would plan KRS and then retrofit to O's. Like, I'm gonna create objectives around these KR's I want.

Speaker B: Yeah.

Speaker A: And I could never get my head around that because it just felt like I was a feature factory. Once I saw that if you really developed the. The O's around your vision and your strategy and your flywheel, that you could actually lay out and go, yeah, you know what? Some of these KRs are good, some of them are bad. Let's do these. These are the ones that'll move the needle. Let's try these. That was. That was a key differentiator for me to make me say, okay, I'll try this. And then the other thing I think that was really important for me was the. That the way that they're structured, there's room for different kinds of learning. When you first talk about OKRs, there is this, like, you do this, you do this, you get this. This is how you measure it. But really, okrs, as they're designed, give you space to say, this is sort of innovative. We don't really know what we're going to learn here. This is where we have a little more information.

Speaker B: Right.

Speaker A: And so we know what to measure. And this is just core to our business. We know we need to move this needle. When I could see that that was built into the concept. And I think. I think John Doar talks about it, but it's not clear. And it's certainly not where business leaders start. No, they start from what they want. It's our tendency. We're back to being hamsters, right? Like, we. That's our nature is to be like, I want this. You know, someone chase that thing. And once I could. Once I could really see that you could set your okrs up to give you space to explore, to, you know, to try some things and fail and to really deliver on the core. I was like, okay, I could. I could set this up. I could do this and that. That moved the needle for me.

Speaker B: Yeah, I love that. And I think that takes two things, in my opinion. And I'm curious to see what you think about it. I think it takes a firm understanding, um, of the economics of your business.

Speaker A: Yes.

Speaker B: You need to know, like, if your business is a magic box, you actually need to know what goes in the magic box, what are the things that need to happen and what comes out of the magic box. Um, and then you need to know, um. Oh, I forgot what I was gonna say. But, yeah, I mean, I think it's about understanding, uh, how your business works. And if you don't, like, fully grasp it, if everybody doesn't fully grasp it, like, you know, this is a revenue driver. This is our engine. This is part of our core. Like, this is part of our core. But not everything's core. That's the other thing I love is when people are like, this is corn. But it's like everything. And you're like, everything's not core.

Speaker A: It's, um, not possible. I've built platforms. I know that's not possible. Yeah, everything can't be core. Go away.

Speaker B: Exactly. Right?

Speaker A: Yeah, I think you're absolutely right. I think there is an element of this that, for me, really understanding your business and understanding what season is your business in, because what you do at a startup that's profitable is different than you do at a startup that's just trying to build, or one that needs to raise money, or a big company that has lots of drivers, some cash cows, but has some room for innovation.

Speaker B: Right.

Speaker A: It just depends on who you are. You need to understand what those drivers are for your business and making money. And who are you today? Which is why we end up back at. You need to know your flywheel. You need to know your vision and your strategy.

Speaker B: Yeah.

Speaker A: Right.

Speaker B: So, yeah, m Phase of your business, I guess, like, I think that's really, like, you just. You just sort of. You gave me a little aha moment there, Leah. Um, let's say that you're a startup that's starving, that needs to make enough money to pay your people next week. You're probably not investing a whole lot in exploration.

Speaker A: Shouldn't be. But, yeah, I don't.

Speaker B: I benefited from, uh, from the cheap money in Silicon Valley. Valley. For a long time. Like, I got a lot of free lunches and a lot free rides and a lot of. A lot of really discounted stuff. So. Thank you.

Speaker A: Um, right.

Speaker B: But I do think that you should know, like, at what stage do you start to tip into the next phase? Like, you're no longer starving, you just got vc. How does that change what you measure? How does that change what you go after in a way that the company understands it? Um, because I think that's the One thing about OKRs that I sort of thought was interesting when I saw it work well is that everybody knew where they rolled up to.

Speaker A: Yeah.

Speaker B: And everybody knew the part they played in these things. So that when a strategy or a tactic changed, um, it was pretty easy. You didn't have these pockets down in corners to like blasting off towards the wrong direction. Which is, I think really easy when you start getting into bigger and bigger companies.

Speaker A: Yeah. Yeah. And you're absolutely right. Like, I think we sometimes lose the plot, as they say in London. A lot lost the plot. Um, like we, we suddenly are, we forget that, oh, hey, this is a diff. We're moving into a different season.

Speaker B: Yeah.

Speaker A: Right. Or something has actually happened that will jar us into a different season. Try working for, at a startup that's a travel startup during COVID Um, nothing changes your perspective about what you build, what you're doing, how you're doing it. What are you going to do on the other side of it when you don't know what's going to happen. Right. How long it's gonna last, what's gonna. Suddenly you're like, game on. What's the, what's. What are we trying to do?

Speaker B: Yeah.

Speaker A: And you have to be willing to shift identity a bit in that moment because you can't be, we just got serious C funding. You have to be like, we got serious C funding. We may not ever see funding again. We don't know what's gonna happen. Right. And I'm just using that example. I think, I think you're absolutely right. There are these moments where you have to go, huh, uh, wait, what's happened that makes us different. Right. Which is why OKR can be really nicely tied to your planning cycles. But your planning cycles involve a little bit of are we still who we say we are? Do we still want to be who we've said we want to be?

Speaker B: Yeah.

Speaker A: And um, that's what we're supposed to be revisiting at those cycles. Not just check, check, check.

Speaker B: Can I tweak this formula so I can get 70%? I actually, I actually love what you just said and I think it, it, I would even more plainly state it is that OKRs enable business agility. Um, because a lot of times leaders will be agile, but teams and organizations are not. Especially as you get bigger, how does that information flow? How do people know how they fit? Um, you'll see the leader that gets up and puts the five item slide at the beginning of the year. And like, this is our strategy. Um, there are hundreds of people in your company that do not understand how that impacts them. So they just keep going, right?

Speaker A: Yeah, no, totally. I think they absolutely are spot on. Like, I think there is a moment there. It does. I think it absolutely is an agility driver. And that is why, if your OKR is going badly, don't try to trick it. Learn from it, and go, huh, uh, we shouldn't do that. Or why is it doing that? Is the question, what did we think was gonna happen? What happened? And what do we do next? Instead of, like, let's retool the calculation so it comes out the way we thought it would. No. Learn from what it's teaching you.

Speaker B: Yeah.

Speaker A: Because something is shifting either in what you know, in the market, in your client, whatever, but go with it. Don't try to avoid it.

Speaker B: Yeah, yeah, yeah, yeah. It's so hard, you know, when you've been. When you've been raised on the benefits of always getting a good metric.

Speaker A: I want a hockey stick, please. Right.

Speaker B: I read in business school that this was the way to do this. McKenzie told me I have to do this.

Speaker A: Yeah, I know, exactly.

Speaker B: If I do these five things, then I. Hockey stick.

Speaker A: Um, sometimes it's just not the case. Right. Because sometimes the first user of your client isn't the final user of your. Of your product. Isn't the final user of your product. Yeah. And what you learn is like, oh, there's another.

Speaker B: There's another customer segment out there that. That is that I have the ability to solve a problem for that is more rep. Like, drives more revenue or is more profitable for my business. If that's your metric. Right. Yeah. I think by any objective measurement, most companies exist to make money.

Speaker A: Yeah, yeah. And pretending like we're not silly. Yeah, yeah, yeah. I agree completely. So one last question before we end this particular podcast. This was a good one. We talked. We had lots to talk about. I don't think we even knew we had that much to say about it.

Speaker B: We didn't.

Speaker A: Um, what is the difference between an OKR and a KPI?

Speaker B: So I think that a KPI is a measurement. Um, so okrs set out your goals. Um, and at the highest level, your objective is this. Sort of like, um, here is what I want to see happen in my business. We will be successful if this part of the machine runs like this. And again, if you have seven parts of your machine, they all need to work in harmony. You cannot just optimize one over another crazy town. So here's the. Here's the objectives for each of these parts of My business. And here's how they all fit together in harmony. Under that is a set of things that we think are the key results. Um, they're probably things that need to be driven underneath that objective. We think they're the right metrics. But a KPI is the performance of how those things are running, in my opinion. Right. So m. It's a metric. Um, it's a metric. And like, I think that's the, um, I think that's the ah, sort of difference for me. Like okrs are how you track progress against your goals.

Speaker A: Right.

Speaker B: And the KPI is like how you're going to measure the most important part of those.

Speaker A: Yeah, love it.

Speaker B: Again, like, let's go back to the flywheel. Um, there's probably. And it also is going to depend on like who you are in the company. So the CEO, she, like, she, I'm gonna say she, she uh, wants to know, um, of the, of the, of the available market, how many am I, I am engaging with? Yeah, um, how am I, how am I doing on getting them to engage with my platform or even come. How am I attracting them? Um, what's it look like to have them engage with who I am? How am I going to convert them in a way that makes money for the business? What does that look like from an LTV or a returning customer or a loyalty perspective? Um, what does churn rate look like? Uh, so there's a set of high level objectives and there's probably KPIs for like this year and next year. And I want to measure progress against those larger macros. How would you define it?

Speaker A: No, same. I mean I agree 100%. I think there is this, it's this measurement and I think KPIs. Like you just said, you have the OKRs and you have this structure for that. You have these measurements. I used to tell my teams, like have your own KPIs, you don't even have to have them. You need. We need to sit down as a, as a group and say, what do you want to measure against? What? Uh, you know, because some of this, there are some, uh, when I was running a domain, right, we had some domain level metrics and KPIs we were tracking. But some teams, theirs were slightly different than those. Those were more kind of across whatever, 18 teams. Each team then needed to have something that like, how are you measuring success? What does it look like? And even in that structure, different teams were at different seasons. Yep. Going back to what we were saying, like some teams were brand new we were like, let's just get it going. What are we going to measure? Let's get it out the door.

Speaker B: Right.

Speaker A: And then some teams were really in the factory making things happen and I was like, okay, we need to measure. Can we do more? Can we do better? What are we, what are we measuring? Right. And it just depended even at that level. So it doesn't, it's even that the micro and the macro is not that different, but people need something that they can look at and go, we moving in the right direction.

Speaker B: Yes.

Speaker A: And I think that's where to me, KPIs can come in and play a role in the OKR structure.

Speaker B: I agree with you. And I think the beauty of OKRs is when companies, uh, acknowledge and respect both like that high level and the tactical and okrs help map between. Because otherwise like, you get this, like, you know, conversion just went up. Well, what happened? What drove that? And if you can't answer those very basic questions, you're just kind of throwing shit at the wall and praying that something good happens.

Speaker A: Totally. 100%.

Speaker B: Look, my metric went up. I must be successful.

Speaker A: I'm doing well. I hope you are. I hope it's not just a mistake. I hope whatever happened doesn't change next Monday.

Speaker B: Right. That'd be super honest.

Speaker A: Like if you don't know what's happening, that's what that is. The possibility. You know, we used to say an account when I was an accountant back in the million years ago, if you're off by a penny, you could be off by 10,000.

Speaker B: Yeah. Because you don't know.

Speaker A: Because you don't know. You're not balance, you're not in balance. Right. The structure says there's a balance. And if you're off by 10 cents, you could be off by $10,000.

Speaker B: Yeah.

Speaker A: Because whatever those two things are that need to be brought into one side or the other, you don't know what the impact's going to be. Right. And I feel that this is somewhat similar.

Speaker B: I think that's, uh, recently, uh, I had, I had a team be super excited because, um. Because traffic went up.

Speaker A: Yeah.

Speaker B: Um, but you know what we were doing, we were paying for advertising, which

Speaker A: is fine, it's fine to do, but you need to know that's what you're doing.

Speaker B: And what's the ROI on that? And did you get what you expected out of the ad spend? But it was like a team just looking at their metrics in isolation and

Speaker A: being like, we did it. What? What did you do?

Speaker B: Yeah, what did you do. That resulted in that we don't know. But someone else spent money.

Speaker A: We're going to keep.

Speaker B: It keeps going.

Speaker A: Good luck. Yeah. Which is also why I don't believe in, like. Like, retooling the measurement at the. At the last mile, because actually, sometimes the last four weeks is when the thing shows up. Yeah, right. And you're like, well, if we hadn't. If we were using the original calculation, we would have been at this number anyway. We should have let things ride. Right. Like, but you also don't play with it if you don't know what you're playing with. Like, measure it and see what happens.

Speaker B: Right. Unfortunately, you know, people got to get their bonus, man. So one way or the other, they're

Speaker A: running in the wheel. They've got to get paid for. Okay, well, this was fun. I think if. If the authors of that book want to come talk to us, we'd be happy to have this conversation with them, too.

Speaker B: A hundred percent.

Speaker A: Okay. So thanks, Marilyn, for discussing oh cares with me. I think we're. Like I said, uh, I think we had more to say about this topic than even we knew. Right.

Speaker B: Yeah. Yeah.

Speaker A: So it was. It was good. And. And I think, as you said before, like, if you want to talk about this topic with us, we'd love to talk to you. Like, and. And in the comments around the podcast, tell us, like, what's your experience been? Do you hate it? Do you love it? Do you love and hate it? Tell us that. We want to know.

Speaker B: To be clear, though, if you hate it, you're probably gonna have to go to school to learn more about it. That's our recommendation.

Speaker A: Exactly. Probably. You have to take a class. I have one if you want to know about it, so. Awesome. All right, we will see you next time.