May 26, 2015
Objectives and Key Results is a strategy that is widely used by forward-thinking companies (and individuals, even!) all over the world to set goals, monitor progress, and evaluate results. Bizdaq, an online platform that makes it easier to buy and sell small businesses in the UK, shared their OKR journey with us in order to help other startups get the basics in place to create a culture in which everyone is motivated, engaged, and committed. After all, that is pretty much the key to success.
Here, in their words, is the challenge that Bizdaq took on when employing a strategy to meet their ambitious growth targets:
“As part of our strategy, we decided to adopt a tried-and-tested ‘Objective & Key Results’ (OKR) approach.”
Originally an Intel innovation, OKRs are also championed by the likes of Google and Zynga. We’ve found it every bit as useful for smaller organisations as it is for large corporates. We use them to set company-wide goals over a set period. When the period ends, the OKRs enable us to reflect on our aims and evaluate the results.
The Objectives describe a specific goal – the more specific the better as it’ll be easy to spot when you’ve reached it. Key Results are the method by which success is measured – you might have two or three Key Results for every Objective.
The Objective has to be the overriding goal – for instance ‘launch a new partners program’. It can and should be inspirational. The Key Results will then define how success will be measured – you can choose metrics such as growth or revenue as well as qualitative metrics like engagement and quality.
So ‘launch a partners program’ might be measured by the following KRs:
- Engage with and survey existing tier one customers
- Convert 20% of tier one customers to program
- Prepare partners marketing pack and web portal
How does it work for us?
At Bizdaq, we set quarterly OKRs with between three and five general Objectives, each having three-to-five Key Results to measure the outcomes so we can evaluate success.
For example, one Objective we set for Q1 2015 was to establish a Bizdaq community. We associate this Objective with four Key Results:
- Increase Twitter following to 3000
- Capture 2500 email addresses
- Launch new seller and buyer ebook
- Launch new knowledge section design and community functionality
As you can see, some KRs have number-based targets to help us pin down our ‘success point’, whereas others are based on getting something done that will enhance the business. The thing we’ve found is that it’s best to only set Objectives for the key actions we need to take to pursue our business goals so we know these are the activities we should be focusing on.
No one wants to miss goals by a mile, but we’ve also learned that it’s best to set our Objectives just a little ambitiously so we have to push a little to achieve them.
Communicate and grow
OKRs are shared resources – they’re designed to be communicated and jointly owned. The joy of using them in this way is that everyone can map into what’s important and get a good understanding of how they can contribute.
OKRs are also ideal for separating good strategies from bad. If things are working well, they can be extended and developed; if not, they can be re-evaluated or dropped altogether.
OKRs will even provide all the elements you need to formulate a constantly evolving action plan. You can break down your key Objectives into as many components as you need to involve your teams in the progress – this way, everyone can see what needs to happen and how they can help move it forward.
We develop OKRs for groups and for individuals. We make sure we’re clear about individual responsibilities if we’re defining a group goal and we also have a system set up to reward colleagues who contribute towards successful achievement of our goals.
Individual OKRs can be as simple as an employee wanting to acquire a new skill or improving existing ones – ‘be great at sales’, for example, which might include KRs such as ‘complete level 1 training course’.
We find it helpful for teams to meet for a few minutes daily to share the previous day’s progress and commit to new actions – as well as to ask for help if they’re encountering any problems or obstacles that are preventing them from achieving goals. In the same way, managers maintain an overview of where we are against our objectives and what each week’s priorities are.
The OKR template we use is freely available at GoogleDocs and is an invaluable reference for ongoing strategy discussions. We’ve put a lot of time into developing our OKR strategy, understanding the nature of our goals and establishing what success looks like for us.
Obviously, every business will take a slightly different approach. The best thing about OKRs, though, is that if you know your business well, you’ll be able to use this method as a tool for targeting those areas most crucial to your future success.
The most important thing is not to set them at the beginning of the quarter and hen forget about them, or to change horses halfway through the month. If you don’t hit all your targets, you’ll make better ones next time and you’ll have learned plenty along the way that will benefit your business. And that’s what it’s all about.
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