Many teams set their OKRs (Objectives and Key Results) around capturing essential metrics from their dashboards, but is this really the best approach? Perhaps it’s time to rethink the point of setting goals and how success is measured. The real value of OKRs comes not from simply checking results at the end of the year but from regularly assessing progress and making necessary adjustments.
For product teams to fully benefit from their OKRs, they need to focus on metrics that respond directly and quickly to their actions. Often, the metrics found on dashboards are lagging indicators, showing the results of past efforts rather than informing what can be done now to influence outcomes. To truly drive performance, teams need to shift their focus towards leading indicators—metrics that provide immediate feedback and offer a way to influence future outcomes.
The Power of Leading Indicators
Imagine you’re part of a product team responsible for email platform integrations, and your company’s primary goal for the quarter is to increase subscription revenue. This is, of course, a noble aim, but it’s a classic example of a lagging indicator. Subscription revenue growth is influenced by a variety of factors such as acquiring new customers, upselling existing users, or reducing churn—all of which require the contributions of several departments and often take months or even years to significantly impact.
As part of the integrations team, your challenge is twofold:
- You know where your department fits into the larger company objectives, but any measurable impact from your actions will only be clear at the end of the quarter.
- While you might develop more responsive team-level metrics, they may not align with company priorities or carry much weight at a departmental level.
This is the central challenge of identifying leading indicators—balancing the certainty that company-wide metrics provide with the need for more immediate, responsive team-level data.
Why Leading Indicators Matter
Leading indicators are essential for creating a feedback loop that allows teams to adjust their approach in real time. By focusing on metrics that directly measure the impact of current actions, teams can avoid the pitfalls of vanity metrics that offer no actionable insights. Instead, they can focus on indicators that truly drive product success, helping them adjust course long before the end-of-cycle feedback becomes available.
The key takeaway here is that leading indicators serve as a means to an end, not the end itself. Simply listing as many leading indicators as possible won’t guarantee success. In fact, it could lead to a distraction. However, when selected carefully, they provide teams with a clear view of their impact, helping them to stay proactive, rather than reactive, in their pursuit of success.
In summary, to make the most of OKRs, product teams should shift their focus from waiting for end-of-cycle results to actively measuring and adjusting their actions based on well-chosen leading indicators. After all, real progress is made when teams can influence outcomes directly, not just reflect on them retrospectively.
