How are you doing? I certainly hope well and welcome to the darn good leadership podcast. This show is all about being a strong and effective leader. One that can make positive impacts on your teams and communities. In the next 20 minutes, you're going to get ideas, inspiration and practical advice. You can take action on to be a darn good leader. I'm your host, Emily. Holting. Hello there. Today we're discussing. Okay. Ours and KPIs. And more importantly, the three words that will solidify for you, how they work together. So very quick, refresh OKR stands for objectives and key results. Objectives are what you're trying to achieve. And the key results are your measures of success. And these things need to be transparent and aligned to your strategy. Objectives, and key results are more explicitly linked to goal setting And KPIs. KPI's stand for key performance indicators. And they are the health metrics of your business. Uh, in order for KPIs to be effective, they need to be visible and you need to understand what good versus bad looks like for your business. KPIs or single data points, whereas, okay. Ours will involve a few different data points. Points with multiple key results per objective. If you want to empower your people, hold yourself and others accountable for results. And crush your business goals. You need a crisp strategy and a way to track and measure performance results. For a long time. I struggled with truly understanding when and how to use versus KPIs for tracking performance. Then I worked with an amazing company called adaptive eight. Who with one sentence? Just one magical sentence. Made it so incredibly clear. Of how to use. Okay. RS and KPIs. Are you ready for this? Because this is huge. It is a magical results producing statement. I believe it holds some value. If you say it. And it will help you explain it to others. So here we go. And thank you. Adaptive eight, the three words are this. Okay. R's. Serve. KPIs. One more time for the people in the back. Okay, ours. Ours serv KPIs. Just as a cold glass of milk serves a warm chocolate chip cookie. And just as catch-up serves crunchy, delicious French fries. Well folks. Okay. Ours serve KPIs. Now, like anything in this world, things are much easier to understand through the art of storytelling. And guess what? That's just what I'm about to do for you. So I'm going to share three quick stories to explain how, okay. Ours serve KPIs. This story involves a road trip. So grab your comfy clothes, some good stacks, your favorite tunes, because today we're taking a road trip together. Our vision and our strategy for this road trip is to get from San Diego, California to lake Tahoe, California. Now, this is about a nine hour drive without traffic and it's California. So we all know there's always going to be traffic. And we are traveling from the salvia, California to the north and the climate between the two are very different. San Diego is mostly sunny and 70 much warmer and lake Tahoe is known for its snow and skiing, especially in the winter months. In this glorious road trip, our car dashboard is going to act as our health metrics. So our dashboard is our KPIs. And as stated earlier, KPIs need to be visible, which our car dashboard is sober. Good. There. And we need to understand what good versus bad looks like. So if we see the gas gauge, for example, It is visible again. Good there, but if we don't understand what good versus bad looks like here, and we don't understand that when the dial is all the way to the left, that we may end up on the side of the road because we ran out of gas, then that's bad. So with any KPI, you got to understand your gauges and what's good versus bad. Not just that the number is visible. So we've got our strategy of going to lake Tahoe. We've got our KPIs, which is our car dashboard and on our journey to Tahoe, we are going to drive through three scenarios of how, okay. Ours serve KPIs. And away we go. Scenario number one, OKR. Ours can serve KPIs when a KPI isn't performing well. Here we are driving along and suddenly our oil pressure light comes on. Now oil pressure is a KPI. It's a health metric of our car. And we know that if that light comes on, It is in a gauge of being in bad health. It is a sign that the engine oil pressure has dropped to a low level, which can be dangerous and destroy the engine kind of quickly, but fear not. This is a perfect opportunity for an OKR to serve this KPI and focus on improving it back to health. So let's write this OKR together. Our objective would be get our oil pressure back in good health today. Our key result. Number one might be something like find a place that doesn't oil change with a five-star review. Key result. Number two, find somewhere that is 10 miles within where we are right now. And KR three might be something like pay less than$50. And finally care for, get it done in less than two and a half hours. Let's take this example out of the car and into the real business world. Okay. Let's say we have a KPI for our company around employee retention rate. And we don't just track retention rate. We know a good looks like for industry, and we notice that this KPI is trending down and has dipped into a range. We have deemed bad health. so just like we use a no care. There to serve our KPI on oil pressure and help bring. That back up to good health. We could use a no care to serve this KPI. On employee retention rate to focus on a very clear goal to bring that back up. To an excellent range of health as well. So that is how okay. Ours can serve. KPI's. when a kpi is in performing well Moving right along to scenario number two. Okay, ours. Ours can serve KPIs when a KPI needs to be leveled up. So we're back on the road and we found a nearby spot to get an oil change, and there was no way the pricing was within budget. And we successfully got our car back integrate health, and now we are continuing on our way to Tahoe towards our vision. Suddenly We hear a weather report that it's starting to snow and ice and lake tahoe Now we are driving in an SUV with new tires. But we know we still might need to level up the traction on our tires to prevent skidding sliding and any accidents. Now notice our current KPIs are still an excellent health and the traction light hasn't come on, but we have this new found information. And we can use this information to create an OKR, to focus on leveling up this KPI. That way we are ready to effectively handle the snow and ice. And prevent any future mishaps We create an objective and the objective goes like this. Drive through lake Tahoe as graceful as a mountain goat. And so how do we do that? So let's put our key results into place. Our key result, number one, find a store with snow chains and that's going to help us keep that traction. number to find somewhere that's within a 10 mile radius of where we currently are. Key result. Number three, pay less than$75 for these no chains and key result. Number four, get it done in less than an hour. Okay, let's take this example into the real business world. Let's say we have a KPI for our company around transaction volume and we know what good health looks like for our business. And currently we look great. However, We hear that our service is going to be featured in Oprah's favorite things list, which is very exciting. And we know though that everyone goes crazy over this list and that our volumes are likely going to spike and go through the roof of what we normally see. So just like we realized we needed to know care. To help level up our KPI on traction. Action to handle the snow and ice. We can use an OKR here to help us up level our KPI on transaction. Action volume. And remember currently our transactions are an excellent health. But we're using this OKR to help us level up and be ready for this increase in volume. And that is how okay. Ours serve KPIs when a KPI needs to be leveled up. Cruising along to scenario number three. Okay, ours can serve KPIs when a KPI is missing. And or needs to be put in place. We're back on the road. The snow chains took way longer to find everyone was hungry. And so we decided to stop at a hotel for the night. In the morning we wake up and we realize everyone's credit cards and cash have been stolen. This news of having zero money and this new circumstance of what are we going to do about that in order for us to meet our vision and strategy of getting to Tahoe. Makes us think about. How we're going to solve for that. And you come up with an idea. You decided to become a delivery driver as a way to make money for the rest of her journey. And we suddenly have a new health metric that is important here. Net revenue of deliveries. So we would create an OKR to help you get this KPI into place. The OKR here would be the objective. Become a delivery driver to make some money fast. Key result one start tracking net revenue. Key result to make$500 to pay for the hotel and some gas. So let's bring this into the real world. Let's say that you've got five clear company KPIs and you know what good health looks like for all of these, but there suddenly is a change in the marketplace and what your customer values. You decide in order to ensure your business is delivering on this value, you need to start tracking a new measure of health. So just like you created an OKR for the delivery. Net revenue to be put in place as a KPI. You can also create an old care to get your new health metric into. To place and being trapped as a KPI. This is precisely how okay. Ours serve KPIs when one is missing and needs to be put in place. All right. I'm. Happy to announce that we've finally made it to our destination. We did this by understanding our strategy and vision, which was road tripping to Tahoe. Having clear KPIs, which was our cars dashboard. Board showing us our health metrics and then using OKR is to serve our KPIs. So this was bringing our oil pressure. KPI backup to good health with an oil change. Leveling up our tire traction KPI with snow chains and putting. A new KPI in place for our net revenue.

Of delivery.

So we can make fast money for the rest of our road trip. Nice work. So let's do some real talk about how. You would actually proceed with taking action on something like this in the real world. Step one. Ensure your. Our company or line of business has a clear and transparent strategy in place. The buck stops here. This is needed above all other things. And this is what the entire business Sims from and where all actions and results. Should be calibrated against. Once that's in place, then you as a leader can craft your own strategy that is aligned to it for your department or team. Step two. Ensure your company or line of business has clear invisible KPIs. This should not be a laundry list. This should be the top five-ish metrics that matter most for the ongoing. Ongoing longevity and health of your business from there, every department and team can also create their KPIs that represent the. Five-ish metrics that are the most meaningful for that department and team. And all of. Those should have clear owners. Step three, given your strategy, review your KPIs and assess which ones aren't performing. Well. And are in bad health, which KPIs need to be leveled up. And which KPIs are missing and need to be put in place. Based off of that, identify which okay. Ours need to be created that can serve both your KPIs and aligned towards your strategy. Remember, we don't want a laundry list of our OKR or KPIs. Less is more and focus is what. It helps teams and companies reach results faster. KPI's as well as OTRs all need clear ownership. And that allows for clear accountability. If you want an empowered, motivated, and accountable workforce that is delivering the highest results to customers. Well, then having a clear strategy and effectively using. Okay. Cars and KPIs. Is one way to make that happen. The next time anyone asks how to use, okay. Ours and KPIs. Just remember these three magical words. Okay, ours serve KPIs. Okay. Our served KPIs when a KPI is underperforming and needs to be brought back to good health. When a KPI needs to be leveled up. And finally, when a KPI is missing and needs to be put in place. I hope this episode continues to grow your understanding of how to create meaningful outcomes through strategy. And KPI's. Thanks so much for sharing your time with me today. If you like what you heard, please leave a ratings and review. Be bold, be brights, be a leader who the next time you're in the car or on a road trip. You can't help, but think of, okay. Ours and KPIs. Cheers.