Data-Driven OKRs: Unlocking Google's Success Secrets with Microsoft Power BI

Despite the appeal of systems like Objectives and Key Results (OKRs), many companies struggle to implement the concept. Like many seemingly simple ideas, OKRs are not as obvious as they look. 

How hard can it be to set an objective, and then define some measurable key results? I mean, what could go wrong?

In his book, Measure What Matters, John Doerr describes the OKR system as he learnt it under Andy Grove at Intel. It’s a good read, and Doerr brings out an A-list of celebrity organizations to illustrate his point. Doerr describes how he introduced OKRs to Google, and how it was Google who greeted his OKR message with the most enthusiasm. In the Plex author, Steven Levy, says “Doerr had Google at metrics”. Not quite as romantic as Jerry Maguire, but we get the message. Levy goes on to say “OKRs were an elastic data driven apparatus for a free-wheeling data-worshipping enterprise”.

And there’s the kicker. Google was already a data driven company. OKRs didn’t change that, John Doerr just gave them a powerful management wrapper around their data driven culture. And they took the idea and knocked it out of the park.

But the very fact that Google were already a data driven company goes some way to explain why so many companies struggle with OKR’s or other objective and measurement systems such as the Balanced Scorecard. Data, analysis, and good communication lie at the heart of the concept. Which is exactly why you can’t “set and forget” an objective. 

It’s not that visionary leaders don’t believe in their objectives, or that their objectives are unimportant, more that they struggle to get good data, and to make the data work for them. And without good data and a solid way to communicate it, no one pays attention. 

To make things even harder, as soon as people are scattered in multiple locations, such as working from home, or on different continents, whiteboards and water cooler discussions break down. Remote Team meetings go some way to fill the gap, but the data and the communication must be rigorous and intentional, to quote Andy Grove. Without a good platform to help, it all becomes too difficult.

Fortunately, in the intervening years data technologies have become more powerful and easier to use. Microsoft Power BI can take data from a wide variety of sources to support all types of objectives. And powerful visuals can communicate progress in different ways, from summary scorecards to more graphical gauges and dials.  

Unlike specialist apps that support specific objectives, Power BI supports a wide range of data sources and data analysis. It’s this width and breadth of situations that make Power BI so impressive. Like Excel, it’s a tool that can tackle the simplest or the most complex of problems and do it very well.

The fact that Power BI Desktop can be downloaded for free, makes measuring and communicating key results more attainable for many more leaders. It may not be the end of their data journey, but it certainly could be the beginning.

Microsoft Power BI and the whiteboard

The room is noisy with people on the phone, while others are shouting, unaware of the racket they are making. There’s laughter, banter, and plenty of energy. 

I notice the large whiteboard on the wall. The writing is messy, but at the top there's each team’s sales goals written large and in red. The smaller numbers beneath are difficult to read because they keep getting rubbed out, so the new numbers can be written in. These are their results. 

This is a focused, albeit noisy, bunch of people. And they all have their eyes on the prize.

While I wait for my meeting to start, I stare at the whiteboard. I know the company is growing fast, and while they won’t win an award for neatness, I wonder how much of their success is due to their ability to focus their team on their objectives. 

This is the world of telesales a decade or two ago, in one hugely successful company. Since then, the world has changed at lot, but the ability to keep people focused on an important objective is just as powerful. 

Arguably a manager’s work has become a lot more complicated, including new challenges such as:

• Keeping everyone focused when people work from home and come into the office at different times.

• Creating objectives for complex projects that cannot be reduced to one number.

• Focusing people’s energy and ambition on work that contributes to objectives, even when everyone is working on different things.

Whilst some things have changed, other things remain the same. Effective managers still want to:

• Unite their team behind a common objective – including complex objectives.

• Keep people focused and engaged with the objective.

• Update personal and team results, so everyone can see and analyse progress. And see where their contribution fits in. 

• Encourage discussion about how to adjust when things are going well, or when you are falling behind.

What’s needed is an electronic whiteboard that is highly graphic, and that updates results without all that rubbing out. Oh, it lets managers to write as large as they want, in whatever colour they want. 

Power BI is a genuinely multi-purpose package that is indispensable once you get to know its capabilities. You could say it’s a bit like a whiteboard, only neater, and a lot more powerful. And easier to clean.

Microsoft Power BI is great at communicating objectives, the progress towards those objectives, and creating engagement. Why? Because it’s not really a whiteboard (you might have guessed that). It will connect to existing and new data sources. It will clean and transform data and join data together from different systems. You can create visuals that communicate what you are trying to achieve and show progress. Because just like that whiteboard on the wall, it needs to be at-a-glance easy to communicate what needs to be done. 

But here’s where the analogy breaks down. A whiteboard may be great at keeping a roomful of people focused, but Power BI can bring large disparate teams and departments together. Wherever in the world they are located. You can go from prototype to enterprise wide, and Power BI will grow with you. And you can use in-built AI capabilities to learn more about your successes and failures. Unlike a whiteboard where you start from scratch every day, Power BI allows you to generate and analyze data about what went well, and what didn’t go so well. This is powerful business intelligence, that is available to everyone.

If you’re trying to achieve something important with your team, Power BI could be just what you need to succeed. You can download it for free, and we provide in-depth data services to help you. Whether you want to clean your existing data, use several different data sources together, or model your data, we can help. We can also help you design dashboards. If you are curious, then get in touch for a no obligation chat. There’s nothing we like more than to help people succeed with what’s important to them.

The Microsoft Power BI KPI Visual in Practice

The KPI Visual is a summary that compares an actual value to a target value, together with the percentage variance. It displays in red when below target, and in green when above target. The background shows the trend of the actual value over time.

 

The KPI visual requires two values, a target and actual value, plus a time interval. These three values mean you have to be clear about how to:

•          Express your goal as a single number.
•          Measure on-going progress.
•          Have a system to record accurate data.

Although simple, these values go to the heart of a goal, and how you intend to achieve it.

Many different numbers may contribute to achieving the goal, but you must choose the one which best represents the target. Jim Collins would argue that being able to simplify complexity into a single number is a leadership skill that unifies people, and guides decisions. In his book, Good to Great, he talks of choosing the right economic denominator to drive profitability. The concept is the same as distilling a destination, or goal, into a single metric that can be tracked. Collins is not the only fan of headline numbers, John Doerr in Measure what Matters makes the case for clear goals with clear metrics. Marissa Mayer famously said, “It’s not a key result unless it has a number.”  

That so many great minds have felt the need to say anything at all indicates that this is neither obvious nor easy.

Having decided on what you will measure, the question of how to measure arises. Again, not obvious nor without its pitfalls. Can it be measured automatically, using IOT perhaps from a production line or a smart phone? If not, do people have to input the data, in which case how accurate will it be, and how onerous on those that have to do this work? Unless the process is made super easy, estimating, sloppy categorising, and all sorts of other shortcuts get taken. Including the final shortcut – not recording the data.

All of these things happen, all too commonly simply because people are already busy with the job they were hired to do.

Antoine de Saint-Exupery said, apparently, that “A goal without a plan is just a wish.” Many others have pointed out that “the road to hell is paved with good intentions.” Both pointing out that just setting a goal is insufficient, regardless of the talent or motivation of those setting the goal.

Hitting difficult goals is more about planning, monitoring, and adjusting actions accordingly. In other words, behind every serious goal is a system for monitoring progress. Once you have that, you have a very real possibility of putting meaningful numbers into the KPI visual.

The good news is that you may well have several systems that already contain the information you need. Most companies have data in databases and spreadsheets, some of which can be used to develop and monitor your KPIs. Or you may need to adapt or add a new system.

Power BI has enormous flexibility in allowing you to use data from various sources and manipulate it into something you can use. And once you’ve done that, you have a meaningful KPI that can be communicated to stakeholders.

If you’ve looked at the KPI visual and decided it’s not for you for any reason, think again. It’s simplicity is its power, and the hard work required to get the data it needs will be repaid many times over.

If you’d like to find out more about using your existing data to report on KPIs or other reporting, get in touch.

Understanding KPIs in Microsoft Power BI

Amongst the many different visuals you can select in Power BI, there is a KPI visual.

 

Whilst it is certainly not the only visual available for measuring important indicators, you should consider it when reporting on KPIs. 

So what is a KPI? A Key Performance Indicator, or KPI, is an important indicator, or value, that tells you whether or not you are on target to achieve something. Microsoft says that the KPI visual is designed to answer the question “Am I ahead or behind my target?” It is not a complex idea, although implementing KPIs so they are really effective takes some skill.

The name says it all:

Key = important.
Performance = the thing that needs to be happen.
Indicator = the numeric value to measure and compare.

The numeric value can be anything that you can measure, such as:

• Money – sales, profit, etc.
• Production output – number of widgets produced, number of articles published, etc.
• Accidents – ideally none.
• Patients – admitted, readmitted, recovered, died.
• Training sessions attended.

KPIs are often lead indicators. That is to say, they are not lag indicators.

Lag indicators are the result of something happening, whereas lead indicators are the actions that lead to the result and the lag indicator. That’s complicated to explain, but easy with examples.

For instance, better trained people are likely to sell more, so if you want to increase sales, measure the number of training courses attended by your salesforce. If you want to lose weight, the amount you weigh is the lag indicator, but calories consumed or time spent exercising are lead indicators.

Lead indicators represent the things we can actually influence, which is why they make good KPIs.

Ideally, it must be something that you can measure at internals and compare against a target value.

Now let's look at the actual visual in Power BI. The KPI visual has three parts:

1. Indicator – This is the actual value. You could think of this as the progress to date.
2. Trend axis – this is a time period, eg day or month.
3. Target goals - the indicator goal you are measuring against. The Indicator and Target goals must be the same, ie both must be currency, or both must be patients recovered. You cannot have a target goal expressed in monetary value and the indicator expressed as number of patients.  

This is an example of the KPI visual measuring daily output. Output could be anything from widgets to surgical operations, it is just designed to illustrate the point.

What does the visual show? Several things:

• On the last day of data - 20th July 2020 - the output was 271.
• On the last day of data - 20th July 2020 - output exceeded the goal by 8.4%. In this visual, the goal is not shown, but we could choose to display it. 
• The KPI visual is in green, with a tick, showing that on the 20th July, we are on target.

A common problem is that your data doesn’t include a target. For example, you may be able to link to a database that stores data about output, but it does not include a goal. That’s not a problem for Power BI because you can enter goal data in an Excel spreadsheet and link the two sets of data together.

Is this the only way to show a KPI in Power BI?

No – and it isn’t always the best way depending on your requirements. The following illustration compares the KPI visual with a bar chart, a line chart, and a table with conditional formatting. All visuals are showing the same data.

If you were Production Manager, which way would you like to have this data presented? Which is the least informative?

If you would like to learn more about monitoring KPIs using Power BI in your business, do get in touch.

A Date with Microsoft Power BI - Part 2

This blog post is about how to create a date table in Microsoft Power BI. In the last blog post, we looked at what happens when you import data with a date column into Power BI. We identified a few limitations when you don't change the defaults. If you’ve not read it, take a look.

So why do you need a separate date table? Here’s two reasons:

• To report on time periods that are different from the standard ones
• To report on time periods that span more than one year.

There are several ways of creating a date table:

• Import it – from a database or data warehouse or another service
• Create it using M
• Create it using DAX

To create a new table with a single column of type date/time using DAX:

• In Power BI Desktop, select Modeling.
• From the Calculations Group, click New Table. The DAX panel appears.
• Rename the table name to MyCalendar and to the right of the equals sign type:

• MyCalendar = CALENDAR (DATE(2020,01,01), DATE(2020,12,31))
• Click the tick symbol to create the table.

This creates a single column date table from the first date to the second date. The syntax is:

CALENDAR(<start_date>, <end_date>)

The start_date and end_date must be valid date values, so use the DATE function with the syntax:

DATE(<year>, <month>, <day>)

Alternatively, you can use a value from your data, such as:

MyCalendar = CALENDAR(MIN(Sale[OrderDate]), MAX(Sale[OrderDate]))

The important thing is that the date table contains the full range of dates in your data, with no gaps.

There is an alternative DAX function - CALENDARAUTO() which scans your data, and finds the first and last dates and creates an appropriate date table. This has one optional parameter – fiscal_year_end_month.

CALENDARAUTO([fiscal_year_end_month])

If your tax year ends in March, for example, the DAX is:

MyAutoCalendar = CALENDARAUTO(3)

This creates a table with a single column called date, with the first date being the 1st April of the earliest year in your data, and the last date being the 31st March of the last year in your data.

Just two things to remember:

• In Options, remove the Auto date/time selection
• In Table Tools, select Mark as data table. Then select the date column. A warning is given to tell you that the hidden date table will be removed. Click OK.

Now that you have a table with dates in it, you can add columns to suit your reporting purposes.

To create a new column for month name:

MonthName = FORMAT(Sale[OrderDate], “MMMM”)

To create a new column for the month number:

MonthNo = MONTH(Sale[OrderDate])

To create a new column for year number:

OrderYear = YEAR(Sale[OrderDate])

To create a new column that combines the year and month values:

YearMonth = Sale[OrderYear] & "-" & Sale[OrderMonth]

Your calendar table is now beginning to take shape, and you can now create slicers containing months from specific years.  This is progress - but there's a lot more to working with dates in Power BI.

In the meantime, leave a comment to let me know how it's going. And if you want some help with your Power BI reporting or data modeling, then get in touch.