How to Define KPIs and OKRs Through Coaching Methodology
In a constantly evolving business environment, aligning strategic objectives with the daily actions of employees is crucial for organizational success.
Most of the topics and concerns raised by employees in their conversations with corporate coaches, mentors, or buddies relate to feelings of frustration and stress regarding objectives, which are far from being “positive” for them; instead, they feel they are “imposed.” They primarily complain about their absence in the final approval of these objectives or, at the very least, in understanding the means to achieve them, as well as expressing their inability to achieve them once presented.
This is where KPIs (Key Performance Indicators) and OKRs (Objectives and Key Results) come into play—two essential tools for measuring progress and ensuring that all members of the organization are working in the same direction.
However, defining and establishing these indicators is not an easy task. This is where coaching methodology becomes an indispensable ally, providing a humanistic and strategic approach to defining these objectives through coaching competencies such as powerful open questions and the establishment of clear and achievable goals.
1. Introduction to KPIs and OKRs
KPIs and OKRs are two widely used methods for measuring and managing performance within organizations.
- KPIs (Key Performance Indicators) are metrics used to assess key factors crucial to the success of an organization. These indicators allow monitoring performance and evaluating success based on specific goals.
- OKRs (Objectives and Key Results) are a goal-setting methodology used to establish and track clear and achievable objectives. An OKR consists of an objective (what you want to achieve) and 3 to 5 key results (how progress towards that objective will be measured).
While KPIs tend to focus on measuring performance in terms of figures and data, OKRs focus more on qualitative outcomes and the tangible results of established objectives.
In fact, the current trend is to work with OKRs before KPIs, as the analysis of deviations from objectives is more predictive when using coaching methodology as a tool for their determination.
2. The Importance of Coaching Methodology in Defining KPIs and OKRs
The implementation of KPIs and OKRs can be enriched when applying a coaching methodology, as its core is the definition of achievable goals with a clear purpose, and through powerful “drill-down” exercises, establish micro-objectives (OKRs) that allow verification of whether the goal is feasible from the outset.
Through this methodology, a culture of awareness, learning, and continuous development is promoted, facilitating the alignment of individual objectives with those of the organization.
Open and honest communication is encouraged among all parties, fostering group thinking, which is the main objective of companies: to enhance overall results rather than individual performance, allowing employees to better understand their roles and how their actions contribute to organizational objectives across the board.
This even improves the most demanded skills: effective peer communication, assertive interdepartmental communication, workplace homeostasis, etc.
3. Powerful and Open Questions: The Heart of Coaching
At the center of coaching methodology are powerful open questions. These questions are designed to foster deep reflection and explore possibilities rather than simply seeking quick answers. In the context of defining KPIs and OKRs, powerful open questions can be a key tool for:
- Clarifying Expectations and Goals: Questions like “What do we really want to achieve with this objective?” or “What will success look like for us?” or “What three goals should we achieve halfway through the project to believe that the final objective will be realized?” help teams and employees visualize and define clearer goals aligned with the company’s mission and vision.
- Exploring Obstacles and Solutions: “What challenges might we face in trying to achieve this objective?” or “What resources would we need to overcome these obstacles?” or “In case of deviation due to time, what three tangible alternatives could we present to the client?” These questions allow employees to anticipate problems and think of proactive solutions.
- Motivating and Committing: By asking “What impact will achieving this objective have on you and the team?” or “How do you feel about this objective?”, emotional connections to the goals are facilitated, motivating and committing employees.
4. Integrating Coaching into the Definition of KPIs and OKRs
- Coaching Sessions for Goal Definition: During these sessions, coaches can facilitate the conversation for employees to identify personal and professional goals that align with the organization’s objectives. Questions like “What skills do you want to develop that also benefit our team?” or “What do you want to achieve this quarter, and how can it align with the company’s objectives?” help connect employee desires with organizational OKRs.
- Ongoing Monitoring and Feedback: The coaching methodology includes follow-up sessions to assess progress towards KPIs and OKRs. This not only allows for necessary adjustments but also provides a space to recognize achievements and reinforce positive behavior. Follow-up questions like “What have you accomplished so far?” or “What could you do differently to advance further?” are useful for maintaining momentum.
- Using Analogies and Metaphors: Coaches use analogies to make the concepts of KPIs and OKRs more understandable and relevant to employees. For example, comparing a KPI to a compass that guides the team in the right direction can help illustrate the importance of performance indicators. Or in cases of layoffs and complicated decision-making involving personnel, questions like “How do you want to be remembered as the captain of the submarine: as the one who heroically went down with the ship or the one who saved half the crew?” drive action.
5. Practical Case: Implementing KPIs and OKRs with Coaching
Consider a company that seeks to improve customer satisfaction as a key objective. Instead of imposing this objective unilaterally, the coaching methodology can be used to involve employees in defining how to achieve this goal:
- Initial Coaching Session: The coach meets with the customer service team and starts with powerful open questions: “What does customer satisfaction mean to us?” and “How can we measure whether we are meeting this objective?”
- Definition of OKRs: Based on the team’s responses, an OKR is established: “Improve customer satisfaction (O) by achieving a satisfaction rating of 90% in post-service surveys (KR1) and reducing response time to inquiries to an average of 2 hours (KR2).”
- Regular Follow-Up: Throughout the quarter, coaching sessions are held to review progress. Questions such as “What actions have had the most impact on customer satisfaction?” and “What adjustments can we make to achieve our goals?” are used.
- Feedback and Adjustment: At the end of the quarter, results are evaluated, and feedback is provided, ensuring that success is celebrated and necessary adjustments are made for the next OKR cycle.
Conclusion: An Integrative Approach
Integrating coaching methodology into the definition of KPIs and OKRs not only enhances the clarity and effectiveness of these indicators but also fosters a more engaged and motivated work environment. By using powerful open questions, establishing clear and specific objectives, and maintaining a continuous focus on feedback and development, organizations can create a culture of high performance and satisfaction for both employees and leaders. In this way, KPIs and OKRs become more than just simple metrics; they transform into tools for personal and professional growth and development, as well as transparent information and, most importantly, leverage for economic success, corporate well-being, and workplace wellness.