The Right Metrics: KPIs, OKRs, or Rocks?

October 12, 2021 Jamie Notter

If you want to successfully implement your strategy, then you’re going to need some metrics, or, more accurately, a system of metrics. The purpose of a metrics system is to use a small number of numbers to accurately track your progress, drive specific behaviors and focus, and tell you when you fall off track, so you can adjust. There are a million ways to do that, but there are a handful of approaches that I see being used more than others, and I think the top three are KPIs, OKRs, and “Rocks.” Here’s a quick comparison

KPIs

KPI stands for Key Performance Indicators. They are a small set of numbers that you think most accurately demonstrate that your organization (or a part of it) is being successful. Some KPIs are obvious, like revenue, or membership for associations. But in the context of implementing a strategy, you’ll want to develop specific KPIs for each of the strategic goals in your plan. In other words, what do we need to measure that will tell us that we are successfully moving toward (and will eventually reach) our goal.

For example, if you have a strategic goal around providing excellent professional development for your members, then you might have a KPI like a Net Promoter Score that is an indicator of how happy people are with your programming. In a KPI-based metrics system, you track and discuss regularly at team meetings and report them to senior management or the board. For some areas, you might have several sets of KPIs that relate to each other, though at that point you might be violating the “key” principle by tracking too much.

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OKRs

OKR stands for Objectives and Key Results. This metrics system started way back with Andy Grove at Intel, but its recent popularity has been driven by its successful application at Google (the book to read on this one is Measure What Matters, by John Doerr). An objective is WHAT is to be achieved, and the key results will benchmark and monitor HOW you will get to the objective. If your very high level objective is to grow the impact of your association, one of the key results could be “grow membership by 15% this year.”

OKRs are frequently nested—like in the example above, the membership director would then take “grow membership by 15%” as an objective, and they would build out a small number of key results that would get them there. OKRs are also usually focused on stretch goals or growth, where KPIs can easily be designed to track slow growth goals or even maintaining the status quo.

Rocks

“Rock” is just another word for priority, and it comes from a metaphor attributed to Stephen Covey, where you need to fill a jar with big rocks, smaller rocks, and sand. If you want it all to fit, you must put in the big rocks first, and then let the smaller rocks and sand flow around them. Starting with the sand or small rocks first (i.e., your lower priorities) leaves not enough room for the big rocks. So “rocks” represent organizational priorities that must take precedent over other things you do throughout the year or quarter.

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The rock metrics system is very popular with entrepreneurs and software companies that are trying to scale and grow (the book here is Scaling Up, by Verne Harnish), and it includes rocks (priorities) plus critical numbers (both lagging and leading indicators), which makes it similar to the OKR system. A key component of this system, however, is the quarterly cadence. Even if you have annual goals, it’s during the quarterly priority setting where most key decisions get made about how to execute.

As you can see, all three systems are about improving performance through a more disciplined approach to metrics and goal setting. We are partial to the rocks/critical numbers approach, specifically because it helps you connect the strategic dots from the long-term down to the next three months, so that’s the system we use in our coaching program. But whatever system you use, remember that you won’t get it right at first. Each new set of rocks or OKRs you define will end up being imperfect, but that’s what sets you up for the next round to be better.

Jamie Notter

Jamie is an author and growth strategist at PROPEL, where he helps leaders integrate culture, strategy, and execution to achieve breakthrough performance and impact. He brings twenty-five years of experience to his work designing culture-driven businesses, and has specialized along the way in areas like conflict resolution and generations. Jamie is also the co-author of three books—Humanize, When Millennials Take Over, and The Non-Obvious Guide to Employee Engagement—and holds a Master’s in conflict resolution from George Mason and a certificate in Organization Development from Georgetown, where he serves as adjunct faculty.
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