Thanks to everyone who responded positively to last month’s newsletter. If you missed it, here’s the link.

This month we’re going to talk about two metrics you need as you direct your life, your team or your business. Before I tell you my view, let me tell you what I know about you.

I know you’re managing complexity.

This complexity consists of categories – buckets of priorities if you will. The buckets will differ from one individual to the next but will undoubtedly include your family, career, health, and friends. The same applies if you’re leading or part of a team – buckets could include sales, service, support, brand, and development.

I know that in some areas of your complex life, the thought “If things could just stay like this” has crossed your mind sometime in the past.

We’ve all had that feeling when the sun is shining brighter than usual and happiness abounds or you close a big deal and secure the future of your business. And you want to capture that moment and replicate it. At that moment, you are 100% satisfied with that bucket.

I know that in some areas of your complex life, you know that things need to change.

You might be satisfied with some areas, but it’s highly unlikely – I’d say impossible – that you’re satisfied with all of them. Your career might be on track, but you know your family life needs a change. Same in your business – the service levels in your business might be on form, but sales is taking a beating and needs a change.

So here’s the type 1 metric. They are the things we need to maintain.

Things are on track and in check, we just need to keep going. Maintain.

Then there are type 2 metrics. They are the things we need to change.

The necessity for change could originate from one of three sources.

We’ve gone off course and need to recover.

We’re faced with opportunity and need to improve.

We’ve been dumped in the deep end and need to explore.

As an example, a type 1 metric is your weight or BMI. These are KPIs – Key Performance Indicators. The interesting thing about type 1 metrics is that you can’t really change them. You can, however, change things to impact them. You can change the calories you consume, which will impact your weight or BMI. In this case, calories consumed is a type 2 metric. These are your OKRs – Objectives and Key Results.

A type 1 metric in your business might be the number of qualified leads. If we’re not getting enough leads, you need to change something – but you can’t change the number of leads. Change your marketing efforts, webinars, or something else to influence leads.

Why is this important?

Two reasons.

One: The track to success is maintaining what you have and changing what you need. If you can maintain your baseline and consistently improve from that baseline, you’ll never fall back. Easier said than done.

Find the balance between “maintain” and “change”.

Two: People have a finite capacity for change. Change causes stress, and too much stress is damaging in all sorts of ways.

Limit what you change.

What to do about it?

Understand buckets. If you want to understand life buckets, check out this post by our colleague Sheldon. Business buckets are a bit more complex and varied based on the business model.

Score each. Businesses should have clear KPIs for each bucket. This time in your life is more complex – it’s usually a subjective rating per bucket.

Limit change. Decide what you want to change (in line with your long-term strategy and goals), and set up OKRs for those.

Be accountable. In a business, this is a weekly leadership meeting. Read more about it here. In life, it’s not as easy. But if you want an accountability partner, let me know.

Take action. Every week, move forward. Letting it slip for one week is okay, but if you’re not moving forward for a few weeks in a row, you lose momentum and likely stagnate.

Review periodically. KPIs will stay pretty constant over time unless there are massive changes like a change in business model. For OKRs, we recommend resetting them quarterly – set up a new goal and start again!

Type 2 metrics aren’t more important than type 1 metrics. Both are crucial, but they have to be handled differently. Type 1 is about maintenance – keep it in check, and do what you’ve always done.

Type 2 is about change – set up a hypothesis, draft an experiment, put in extra effort, change something and measure the effect.

It’s protect and maintain vs. grow and expand.

It’s run the business vs. change the business.

It’s business-as-usual vs. strategic change.

It’s operational vs. transformational.

It’s your dashboard vs. your GPS.

It’s status quo vs. taking risks.

It’s maintain vs. improve.

OKRs and KPIs are very different. Don’t confuse them. Both are necessary. Lead with OKRs; manage with KPIs.

If you have questions, we’re always keen for coffee.

Get in touch so that we can brainstorm a few solutions together!

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