You can use a KPI metric when you want to set custom start and target values to your objective. Objectives tracked based on KPI metrics are associated with ‘Units’. Units represent how an objective’s progress should be measured. Ally.io supports two types of units - Numeric and % based. The roll-up of progress for each of these units is calculated differently.
Numeric Units: For objective’s tracked based on a numeric unit, the progress of the objective will be the sum of numeric key results.
% Units: For objective’s tracked based on the % unit, the progress of the objective will be calculated as the weighted average of all key results, whether they are metric based, or just going to 100% complete. You can also set individual key results that do not contribute to the parent.
Objectives measured based on the numeric unit
Progress for objectives that are tracked based on numeric units, is calculated as the sum of all the key results. For objectives tracked by numeric KPIs, your objective and key results should essentially carry the same units for the progress roll-up to work. For instance, when an objective is measured based on a KPI metric with a numeric unit, the key results will contribute to the progress only when they’re also calculated by numeric metrics.
To create an objective that’s tracked by a numeric KPI,
1. Click the ‘Add Objective’ option and fill in your objective title and other details like type, owner, time period.
2. In the 'Outcome' section, click on the ‘Add a metric’ option to give details about the metric you’d like to measure, the starting value, and the target you’d like to achieve. You can also choose a unit based on how you’d like to measure progress.
3. Once you’ve added details about the metric, choose 'Automatic via rollup from key results' as the progress mode under the 'Progress' section, and click on ‘Create’.
Note: The progress section has three different types of progress modes: Manually, Automatic via rollup from key results, Automatically from a data source. Learn more about all the progress modes here.
Say, for example, your Sales team has an objective to 'Increase ARR from $1M to $2M'. Now the objective is tracked by a KPI metric that is numeric. This objective has key results that are also measured by a numeric KPI.
Objective: Increase ARR from $1M to $2M
KR 1: Increase NAMER ARR from $400 K to $800 K
KR 2: Increase MENA ARR from $100 K to $700 K
Objectives measured based on the % unit
Progress of the objectives that are tracked based on the % unit will be calculated as the weighted average. You can also set the % completion arbitrarily as per your requirement. This will work for both manual progress updates and automated updates from integrations. Objectives that are tracked by % complete KPIs can have key results that are tracked either by % metric or by the numeric metric.
Simply put, an objective’s completion doesn’t mean it has to hit a 100%. You can choose to set your objective’s completion % as 60% and update progress manually or connect your objective with an integration that’ll allow you to measure the progress based on % completion.
Say, for example, your Marketing team has an objective to ‘Achieve record-breaking engagement to increase paying customers’ from 30% to 60%. This objective has the following key results that contribute to the parent’s progress.
Achieve record-breaking engagement to increase paying customers
Key result 1
Increase monthly trial signups from 25% to 40%
Key result 2
Boost NPS score from 7 to 8
Key result 3
Increase monthly conversion of new paid customers from 15% to 35%
For instance, there’s a progress of 5% made in key result 3 (Increase monthly conversion of new paid customers from 15% to 35%). Whenever there’s a progress checked-in the actual progress made will be displayed under the progress bar and the scaled progress is shown right next to the progress bar.
Let S be the ‘Starting’ metric and ‘T’ be the ‘Target’ you’d like to achieve. ‘P’ is the value of the progress you’ve made so far.
In this example, there’s a check-in made at 20%.
S = 15 (Starting value)
T = 35 (Target)
P = 20 (Progress made)
Here’s how the key result’s progress is used to calculate scaled progress:
So for this key result, the scaled progress would be [5/20]∗100 =25%
Objectives measured based on the % unit can have key results that are tracked either by %metric or the numeric metric
Objectives that are tracked by % complete KPIs can have key results that are tracked either by % metric or by the numeric metric. The key results progress will roll up to the parent’s progress irrespective of its metric. This is because the numeric metric can be converted and expressed as a percentage.
In this example, consider the key result 2 ‘Boost NPS score from 7 to 8’, where the progress is measured as a numeric metric. Say there’s a check-in made and the value increases from 7 to 7.2, then the progress made will be considered as 20% and will contribute to the parent’s progress.
Note: In case you don’t want a key result measured by a numeric value to contribute to an objective that’s measured by % complete KPI, you can open the ‘Edit weight and progress roll up’ menu and select the ‘Doesn't contribute towards the progress of the parent’ option.
The objective’s progress is the weighted average of the key results that contribute to the parent.
Let KR1 be the scaled progress of key result 1, KR2 be scaled progress of key result 2 and so on, and ‘n’ be the total number of key results.
Scaled progress of Objective = ([KR1 + KR2 + KR3+ KRn] / n)*100
In this example, to calculate the scaled progress of the objective
Scaled progress of KR1 = 0%
Scaled progress of KR 2 = 25%
Scaled progress of KR 3 = 20%
Scaled progress of the objective: [(0+25+20/3)*100] = 15%
The actual progress of the objective is calculated by the product of the scaled progress and the difference between the target and the starting metric value added to the started metric.
Actual progress of the objective = [Scaled progress of the objective * Difference between the target and starting metric] + Starting metric.
Actual progress of the objective = [(15/100)*(60-30)] = 4.5+30 = 34.5%