How to track slow-moving OKRs

One of the hardest challenges when setting goals is to find good ways to measure things that move slowly. This can take many form:

• Closing 1 Enterprise customer in the next 3 months (long sales cycle)
• Launching 1 new product (long dev cycle)
• Delivering 1 marketing campaign (long preparation cycle)

Whenever you see a key result where the target is a single unit, it will be very difficult for the team to use said key results to make decisions.

Why?

Because your KR will stay at zero for weeks before finally getting to your final target of 1 (one) unit. This makes it hard to judge confidence during the weekly meetings as the conversation will go like this:

• Week 1: we haven’t closed the new customer yet.
• Week 2: we haven’t closed the new customer yet.
• Week 3: we haven’t closed the new customer yet.
• Week 4: we haven’t closed the new customer yet.
• Week 5: we haven’t closed the new customer yet.
• Week 6: we haven’t closed the new customer yet.
• Week 7: we haven’t closed the new customer yet.
• Week 8: we haven’t closed the new customer yet.
• Week 9: we have closed the customer!

This is a happy case where you managed to get the result that you want. But what if you end up with 0 new product, or 0 new campaigns at the end of the 3 months? What makes this situation risky is that you’re tracking a binary result that doesn’t offer much context. We’re either done or not. Consequently it becomes harder to anticipate or detect issues with the current effort.

What if you’re unable to get demos? What if product development has halted due to a blocker? What if you’re unable to secure the right partners for your Marketing campaign?

All of these questions will be difficult to answer if you’re only looking at the end result.

By contrast a company that sells consumer products will generally be able to track sales on a daily or weekly basis. This gives them a great advantage as they can detect anomalies by looking at trends, and make quick adjustments to correct the course.

But, if you have long sales cycles with large contract value, then you must look for other ways to help you drive efforts adequately.

The role of OKRs: North Star x Guardrails

Most people understand that OKRs should be the North Star that guides your team’s effort. It helps everyone understand what the most important thing to achieve is. And this is exactly why the initial temptation is to add your end goal (ex: 1 Enterprise customer) as a key result.

But, the other role of OKRs is to act as guardrails. That is, to ensure that your current efforts will help you deliver your objectives in due time. And in order to do that, you need key results that are observable on a weekly basis.

For instance:

• Instead of tracking a single Enterprise deal, you could look at the size of the pipeline, number of demos made or quotes sent.
• Instead of checking if your product was launched, you could track the number of active alpha or beta users.

The trick is to find a leading indicator of success that can help you adjust your confidence level while you’re working on achieving your end goal.

Understanding leading vs. lagging metrics

The more you understand the concept of leading and lagging indicators, the easier it will be to set effective key results for your OKRs.

• Leading indicator: a leading indicator is something that is measured before the desired outcome happens. It’s used to predict the likelihood of future success.
• Lagging indicator: a lagging indicator is something that is measured after the desired outcome has happened. It generally helps us measure how successful we were.

A simple example would be looking at getting more customers to pay for our service.

Leading indicators would be: number of signups, session retention, number of demos booked. If all these metrics are positively tracking, then it’s highly likely that we’ll see people converting to customers.

On the other hand, lagging indicators would be: monthly recurring revenue (MRR), customer churn, number of upgrades. These metrics can help us measure the size of the success, and they are directly related to the end goal of having more customers.

When setting OKRs, you can use lagging indicators if they move quickly (on a daily or weekly basis). This is ideal because your key results are then highly correlated with your objective. Week after week, you will be able to look at the trends to make sure that you’re delivering your objective, and it will be easy to see the direct impact of your work.

But if your lagging indicators are moving slowly (ex: you close 1 or 2 customers per quarter), then you should opt for leading indicators instead. You’ll need to find the best metrics that can help you not only assess your confidence, but also help you understand how to adjust your strategy.

Using lagging metrics can sometimes feel like more art than science, but the key is to have something that can be observed on a weekly basis.

Using proxy measures of success

There isn’t a one size fits all approach to finding the right leading indicators of success. The best is to sit down with your team to brainstorm the right metrics.

• “Our objective is to get 1 new customer this quarter.”
• “Ok, but that’s a slow moving goal. How will we know we’re on the right track?”
• “We’re sending 1-2 quotes per month.”
• “Ok, but that’s still too slow. So how will we know we’re on the right track?”
• “We’re having 12 qualified demos per month.”
• “Ok, that’s 3 per week, we should track that as a key result.”

The idea is to get to something that can be seen moving from one week to the next. It also doesn’t have to be just one metric! I highly recommend pairing key results together, and you can also use a milestone-based approach, especially if your key result is a project.