Use OKRs and KPIs to Create the Signal in Your Data

As you start to work more with your data, you quickly realize that you have too much data.  You solve that problem with techniques that focus your work.  You want to intentionally engage your data and analysis to support your winery.  Winealytics recommends you use a combination of Objectives and Key Results (OKRs) and Key Performance Indicators (KPIs.)  These two systems work together to clarify how to interact with your data.  As we’ll show you in this post, one system (OKRs) helps define your ceiling and the other (KPIs) solidifies your foundation.

OKRs provide a powerful yet lightweight approach for driving positive change at your winery.  If you aren’t familiar with OKRs you can get an introduction and then drill into the details through the book “Measure What Matters” or the related website, What Matters.  For this discussion, we’ll focus on how the OKR approach gets your team to set measurable goals to drive change for your winery.  OKRs help your winery through because they provide  F.A.C.T.S for your team

• Focus
• Alignment
• Commitment
• Tracking
• Stretch

For this post, we’ll focus on “Stretch.”  Stretch means breaking out of business as usual (BAU) and pushing your winery to not only achieve something new but establish a new standard of performance.  You define the Objective, e.g. become the preferred winery in Napa Valley for millennial wine drinkers.  Then you set 3 or 4 Key Results (KRs.)  These set measurable results that together demonstrate success.  So one KR might be “increase number of millennial club members by 3x.”  These examples change based on the priorities and strategies for your winery, but the objectives always define a shift in your winery and the key results always provide metrics to “prove” when you reach the objective.

You’ll also find that setting these objectives and defining the key results creates an active engagement with your data to analyze the key results.  You’ll closely track these results through the duration of the objective, whether for one quarter or over an entire year.  You’ll gauge your progress, learn from which strategies are working, which ones need refinement, and where you need to go back to the drawing table to create new approaches on how to reach your objective.  When you reach the objective, you lift the performance ceiling for your winery, establishing a new standard of performance.

Let’s contrast this with business as usual (BAU) and KPIs, but before we do that let me say something.  KPIs can mean many things, but for us at Winealytics we use them to represent the key performance metrics that protect the stability of your winery.   Think of KPIs as the floor or foundation for your winery. They are key performance metrics that indicate the continued health of your business. Don’t get distracted if you use KPIs to mean something else.  What is important is that you focus on the distinction with OKRs.  This distinction allows you to categorize your analysis work into two buckets:  driving change (OKRs) and protecting current business performance (KPIs.)

So back to BAU and KPIs.  Sticking with the theme of millennial customers, your winery may already see growth in this demographic of +4% year over year.  So if you were satisfied with that growth rate for now, or at least have higher priorities for strategic changes, you could define a KPI of “maintain 4% growth in millennial customers for the year.”  You know getting younger customers helps your short term revenue and provides stability in the future.  Since 4% growth is an established level of performance, you probably don’t need new strategies and behaviors.  Instead you just maintain the work that helped bring in the +4% millennials last year and make sure it continues to work.  In other words, you aren’t actively testing new strategies, measuring their impact, learning, and adjusting your approach ala OKRs.  Instead you need to monitor the metric to make sure it continues to perform at the demonstrated level and doesn’t degrade.  You do want an alert if it drops below the already established performance level, but otherwise you don’t regularly engage it.  In this manner, you maintain the foundation for your winery.

So as you head into your 2023 strategic planning, think about your business as areas you want to drive change and apply OKRs.  Equally important, think about the parts of your winery that must continue to perform at current levels and set KPIs.  You’ll want to focus your active data analysis on the OKRs while making sure you get an alert if any KPIs fall below your established performance levels.