Measuring Performance in the Age of Insights through Data Driven Developments: Performance Metrics vs. Objectives

If you work on the management side of things within your organization, it's common to hear, "do you have the metrics to support this"? In some cases, metrics and data may be used interchangeably. With distributed work teams becoming more common with distributed systems and their infrastructure being located in various cities across the globe, you'll experience more of your staff becoming curious about or unintentionlly invested in data synthesis for metric reporting. Yes, those dashboards that you take a quick glance at to better understand the current state of things. These dashboards are driven by the relevant data of their sources. Each can present an accurate or inaccurate state of being, if the underlying queries are not in alignment with the results they are reporting on.

With the continuous and rapid advancements of the capabilities of artificial intelligence and machine learning solutions, we can easily fall into thinking "the solution is right here". However, it remains critical to the organizations bottom line, to ensure that the algorithms and flows on the backend are queried in a way that provides the correct response to your queries, with enough depth. Saying that to say, there will always remain a need for validation of requested output to ensure the information we share is the correct information.

With businesses becoming increasingly interested in leveraging data for improved decision making it raises the need for understanding the difference between the objectives we set and the performance metrics which align to these objectives, representing a current state of being. This includes mapping our technical performance metrics to business operations. In this article, we'll focus on the differences between both.

Understanding Key Performance Concepts

I found myself in coversation, explaining the concepts of Reliability Engineering as it relates to performance metrics, or SLIs, SLOs and SLAs. I often relate the concepts of SLIs and SLOs as technical KPIs for individuals who speak technical lingo. It's deeper than that, but also a good starting point. Key Performance Indicators (KPIs) are the quantifiable metrics used to measure the state of a businesses financial, operational and strategic overall performance. In "Reliability Engineering: Service Level Quantifiers in Software and Technology, we highlight SLIs as the performance metrics which capture a systems performance, with SLOs being the ideal targets or thresholds for ideal performance.

When managing teams at all levels of an organizations, there tends to exist a set of objectives, or goals, that the org sets out to achieve over some period of time. This can easily leave an organization adoption frameworks such as "OKR Management" using Objectives and Key Results as a tool to maintain alignment and increase visibility of cross-functional goals. This collaborative process ensures all parties maintain focus and accountability of the tasks required to achieve an overall strategic goal.

Objectives vs. Key Results

Objectives are the aspirational goals, created by an organization as a motivational method to inspire. They are typically very broad. Key Results, are the metrics or measurements that inform the organization of the success or failure of the objective. Since objectives tend to be broad in nature, it is common to have multiple key results which achieve a single objectives.

These can be written in one of the following formats:

• We will [objective].

• We will achieve [objective], measured by ...

It's up to the teams managing these OKRs, but common to remain broad, short, and aspirational. As a framework, OKRs are goal-setting tools which aligns organizational focus, through structured objectives and performance metrics, measured over a set period of time. Key results are the metrics or measurements of the criteria which determines success or failure. A few examples of this:

• Increase "x" by "y%" over the next quarter.

• Achieve "y%" increase of "x" in FY25.

Whatever your key results are, its important to ensure they are measureable and time bound. Key results do not focus on the operational aspects for achieving the required result. They provide insights into the "thing" we are measuring, for how long, and the single threshold we are looking to achieve.

Exploring OKRs, KPIs, and SLAs

OKRs are a goal-setting framework that aligns organizational focus. This differs from Key Performance Indicators (KPIs) which are the specific metrics used to evaluate success in achieving objectives and Service Level Agreements (SLAs) as formal agreements that define expected service standards between service providers and clients. While KPIs and SLAs are both measurements, KPIs will focus on a formula to calculate performance of a business operation and is used achive an objective. While SLAs, used in tandem with SLIs and SLOs are the commitments made to your clients or customers, whereby you want to implement internally, processes that keep operations in alignment with meeting those commitments. Let's briefly shift our attention towards SLIs and SLOs.

The Role of SLIs and SLOs

Service Level Indicators are the quantifiable measures that provide insights into performance against SLAs. Think of the relationship as similar in nature to KPIs as key results aligning with objectives. Service Level Objectives (SLOs) are specific targets set for SLIs that help in maintaining agreed performance levels. We can think of this relationship, or threshold setting, as a reinforcement of the requirement for key results to remain measurable and timebound. An SLO focuses on:

• Some [measurable performance metric (SLI)] performs for [threshold] within [compliance period].

We might want a content creator to post a single piece of content that is greater than 3 minutes long, once a week, and maintain a success rate of 95%, leaving an error budget of 5% or the time limit equal to .05 to not achieve that 3 minute long period. Instead of measuring operational business success, we want to measure this contractual commitment that we made to our viewers. Similar thinking! In retrospect, we mentioned key results not capturing how. SLIs help to capture what we are measuring. In this instance the length and consistency of content posts, in a contractual agreement (SLA). To get there, we might implement automation and other DevOps practices that simplify the process of creating and posting content externally. These technical processes will reduce toil and simplify deployment, leaving room for focusing on the quality of the content posted.

Creating frameworks and practices that align with the roles of the individuals handling daily operations, improves the communication gap that can exist when communicating within cross-functional domains within an organization.

Implementation Strategies

Cross-Functional Alignment

When creating strategic objectives that scale across an organization, it can be difficult to get into the finer details related to the "how" we achieve this. One of them being the communication gaps that can exist between cross-functional domains. OKRs, KPIs, SLIs/SLOs help to achived these objectives and SLAs using processes that align with the thing we are measuring and the staff doing the measuring.

Within the technical product landscape, there exists many solutions which implement these practices in a plug and play manner. Meaning, your team(s) or organization is responsible for the collaborative efforts to plug this information into their platform and populate the current state of things across a business group or organizations. These frameworks also ensure that we do not fall back into the limiting silos and continue to progress together across departments, ensuring we maintain and achieve a set of unified strategic goals.

Real-World Applications

In this section, we'll highlight a few examples of each to solidfy the difference between each of the performance measurment frameworks. In a realistic setting, these are created through assessing the artifact or process to be measured in a collaborative environment, with the appropriate stakeholders. Therefore, you'll often see typical metrics that are captured across a specific domain or industry, but it remains critical to maintain collaborative workshops or assessments to identify any anomolies or unique use cases that will better aid in creating or achieving a critical objective.

Examples of OKRs

• Example of a sales department's OKR focused on increasing revenue through lead conversions.

  • Objective: Achieve record setting revenue growth through customer focused engagement.

    • Key Result:

• Example of a development team's OKR centered on improving product delivery timelines.

  • Objective: Improve product delivery success through efficient and timely delivery timelines.

    • Key Result:

      
      

Examples of KPIs

• Example of a customer satisfaction score as a KPI for service delivery teams.

  • KPI: CSAT (Customer Satisfaction Score) measured by the percentage of customers that are satisfied with service delivery.

    • 99% customer satisfaction rate for FY25.

This can be measured by surveys or another way that captures customer sentiment and used to achieve an overarching OKR or objective.

• Example of a code quality metric as a KPI for software engineering teams.

  • KPI: A metric that captures the number of incidents post code push in comparison to the total code pushes, or analysis of code quality through a code review process.

    • 99.5% of PRs are successfully pushed into production without incidents, each quarter.

      
      

Examples of SLAs

• Example of an SLA between the IT department and the rest of the organization, specifying uptime guarantees for internal systems.

  • SLA: Internal HR portal employee data is available for download with inaccessbility resolved within 4 hours.

• Example of an SLA for a customer-facing service outlining response times for support requests.

  • SLA: 95% of incoming support requests are responded to within times outlines in their respective severity level.

Alignment of Business Metrics and SLAs with OKRs

Driving Organizational Goals

To achieve the ideal level of insight and success through performance measurment will require alignment between business metrics and organizational OKRs to create impactful strategies. This ensures all team members across the organization work towards the same business outcomes, and are reporting on the current state of the outcome as it relates to the success of its overarching objective.

Continuous Improvement in Performance Measurement

Each of the performance measurment concepts, or frameworks, mentioned in earlier sections is an ongoing task. Success is not easily obtainable if they are implemented and never refined. Regular reviews laterally and vertically with the necessary staff is a great way to kickstart your iteration process.

Final Thoughts

Developing data insights that provide the necessary visibility into operations to track and measure performance is critical within modern organizations in today's society. More important than leaders within organizations understanding the need for these structured frameworks like OKRs, KPIs and SLOs is ensuring that your staff understands how to utilize these to effectively report on the status of the work they do, to capture the importance of the work they do in relation to broader strategic organization wide goals. What you'll likely find is the more your staff understands the relationship between organization objectives and that simple task they come into to work to complete everyday, the more empowered they will feel within your organization.

These frameworks not only drive efficiency, but ensure we eliminate silos through structured conversations and collaboration cross-functionally to achieve organizational success. I hope that you look for opportunities to implement today and connect with us if you're interested in learning how to begin your organizations transformation today.