OKRs: How to Go Beyond Copycatting Google and Make OKRs Work For You

OKRs: How to Go Beyond Copycatting Google and Make OKRs Work For You

OKRs: How to Go Beyond Copycatting Google and Make OKRs Work For You

OKRs: How to Go Beyond Copycatting Google and Make OKRs Work For You
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Imagine you’re part of a band of adventurers on a riverbank. Your goal is to ford the river. You know there's a series of stones that you can jump across to reach the other side of the river. The issue is the river is covered by a thick layer of fog and the stones are strewn about the river randomly. 

Your startup is the adventurers, the other side of the river is your company’s vision, and your OKRs are the path you're going to test to cross the river. This metaphor, which comes from friend of the community and OKR expert, Christian Ulstrup, represents the challenge many startups face when it comes to setting and achieving their objectives and key results (OKRs). 

Think of OKRs as a roadmap that helps you track progress, align your team, and encourage engagement around measurable goals.

An objective is a qualitative outcome that you want to achieve. It's the destination you want to reach. Meanwhile, key results are the quantitative metrics that you believe indicate you're moving in the right direction towards your objective. These are the milestones you need to reach to get to your destination.

The OKR Framework helps organizations achieve strategic alignment by ensuring that every individual and team has a clear understanding of the company's goals and how their work contributes to those goals. With OKRs, you can measure progress and hold teams accountable for achieving results.

History

Any thorough discussion of Objectives and Key Results (OKRs) must begin with their history. As you may know, they were first introduced by Andy Grove, a former CEO of Intel, as a way to help his firm set and achieve ambitious goals. John Doerr, a venture capitalist who worked at Intel, became a strong advocate for OKRs and introduced them to companies such as Google, where they became an integral part of the company's management system. 

After that, OKRs exploded in popularity and numerous startups have adopted the framework without truly understanding its purpose. The result? A mimetic and ineffective practice that fails to align teams and deliver results. In this article, we'll discuss how to go beyond copycatting Google and make OKRs work for you.

With that said, properly implemented OKRs can help teams align their efforts with the company's long-term vision and mission. They can be an effective tool for strategic alignment, if they ensure that everyone is working towards the same goals. OKRs also promote leadership accountability, as each team member is responsible for specific outcomes.

Who needs OKRs?

First, let's discuss who doesn’t need OKRs. 

OKRs are not a good fit for the earliest days of a startup where the (small) team should be focused relentlessly on speed of experimentation and getting to product-market fit. With a low headcount (8-10 people), a seed-stage company doesn’t have enough management complexity to require slowing everyone down with a structured planning process. Speed is the only weapon you have at that size.

Similarly, slow growth companies don’t need OKRs. Eventually, companies mature to the point where their market will not sustain fast growth; this happens whether your firm is a local electrician or a multinational software provider. With slow growth, there are fewer experiments and projects to be done, so less coordination is required; most people will spend their time on well-trodden processes.  

OKRs are most useful for companies with >10 people in headcount, product-market fit, and rapidly approaching hypergrowth. At this point, you need more management structure in place to ensure your expanding team is rowing in the same direction as well as a way to record hypotheses, progress, and results of all the experimental projects you’re running.

When the organization is growing and there's a lot of activity, but progress seems to be lagging behind, it may be time to adopt OKRs. If communication is filled with friction, it's a sign that OKRs may be necessary to provide clarity and focus. OKRs can help organizations achieve their overall strategy by keeping everyone aligned and accountable.

Framework: Setting, Syncing, Reflecting

Now, let's dive into Christian’s approach to OKRs. In his view, there are three steps to the OKR framework: setting, syncing, and reflecting. 

  1. Setting: The first step is to hold a 5-6 hour workshop at the beginning of each quarter. The outcome of this workshop should be 1 objective and 3 quantitative key results.
  2. Syncing: The second step is to establish a weekly 1-hour touch base with the senior leadership team. The outcome of this meeting should be 1+ experiments to test over the coming weeks in order to improve the odds that the company meets their key results.
  3. Reflecting: The final step is to run a 2-hour evaluation at the end of each quarter. During this time, the team should reflect on their performance and assess whether they met their objectives and key results.

It's worth noting that this process requires 20 hours of executive time per quarter, which can add up to tens of thousands of dollars in executive labor per year. Therefore, it's important to use this time effectively.

Setting

Preparation: 

Before your 5-hour workshop, it's crucial to build trust with the execs and get all the information you need. You can take two recommended tactics: 

  1. Pre-workshop touch bases will help you understand each exec's pain points and conduct a premortem, identifying potential causes of failure and ways to avoid them. 
  2. You can also conduct an anonymous survey polling the entire company on their confidence in progress towards the company's mission, premortem comments, and asking Peter Thiel’s go-to question "What do you believe about this company that the rest of your team would disagree with?"

Workshop: 

The workshop itself involves a brainstorming session, where sticky notes with suggestions are put together and converged into themes, then distilled down to 1 objective and 3 key results. 1 objective creates focus and clarity about what’s most important.

Objectives should be qualitative, and Key Results should be quantitative. It's strongly recommended to set KRs at a confidence level where the exec team believes there's a 50% chance of hitting it; this ensures the experiment is ambitious enough, not just an incremental change. Another critical step is to assign a dedicated executive "steward" of each KR. They are not responsible for delivering that KR, but they are accountable for staying on top of its performance and having a gauge on its likelihood of success.

Communication: 

Once the OKRs are set, it's essential to disseminate them to the whole company. It's recommended to test out a method called the backbrief, where after sharing your OKRs with the team, your team communicates the company's OKRs back to you, so there are no gaps in understanding.

Syncing 

This is the next component of Christian’s framework. In this step, you touch base weekly with your Senior Leadership Team to assess the progress of the KRs and ensure that the team stays on track to meet the objectives.

To do this effectively, you should create a template to be filled before the meeting that recaps OKR performance, including a weekly demonstration of accountability that highlights any commitments made in the previous week and confirms completion. The steward of each KR should also report a confidence score on a 0-10 scale for both the past week and the current week, along with reporting KR metrics.

Consider this example: “Regarding the KR, ‘gain 5 product partnerships by EOQ’ we had 0 last week and 1 this week. My confidence around this KR has gone from a 3 last week to a 5 this week”, 

During the discussion, you should focus on KRs with the largest gap between weeks' confidence scores. Ask the steward: "what would need to be true for you to increase your confidence score by 50%?" Based on the response, poll the group for experiments that could be run to achieve the increase in confidence. Remember, this meeting is not meant to be a mere status update, but a discussion to increase the likelihood of success.

Reflecting

OKRs are about more than simply hitting numbers, they're about optimizing for learning. So when it comes time to review the quarter that's passed, keep that in mind. You're not just evaluating whether you met your objectives or not, you're also looking for insights that can help propel you forward.

The reflection process follows a simple structure. You start by comparing your target key results with your actual results. Did you hit the mark, outperform, or fall short? Next, you evaluate whether the key result you selected aligned with your overall strategy. Did it actually move you closer to your goal?

Then it's time to take a deeper dive into the insights you gained from the quarter. What growth factors (e.g. sales tactics, channels, marketing approaches, etc.) did you discover that you can use to your advantage going forward? On the flip side, what limiting factors did you uncover that you need to account for and overcome in the future?

Finally, it's important to identify and celebrate the heroic narratives that emerged over the quarter. Who were the team members that went above and beyond to help the team hit its objectives? Recognizing and celebrating these individuals sets a positive and motivating culture for the whole team.

Pitfalls

Finally, as with any new initiative, there are pitfalls to avoid when it comes to implementing OKRs. Here are some of the most common ones to watch out for:

  • Having too many OKRs: It's important to strike a balance between being ambitious and being realistic. Having too many objectives can lead to confusion and a lack of focus. Remember, OKRs are meant to be a tool for prioritization and alignment, not a laundry list of goals.
  • Sharing OKRs with external stakeholders: While it can be tempting to share your OKRs with investors or partners, keep in mind that they are a tool for learning and improvement, not a performance metric to be judged against. Sharing your OKRs with external stakeholders can create unnecessary pressure and distract from the learning process.
  • Don't skip a weekly sync: The weekly sync is the cornerstone of the OKR process. Skipping a sync can lead to the process unraveling and focus diffusing. Make sure to prioritize this meeting and keep everyone accountable.
  • Comms failures: A poorly communicated OKR can lead to confusion, frustration, and a lack of engagement from the broader team. Make sure to communicate your OKRs clearly and consistently, with back briefs as mentioned above, to avoid any misunderstandings.
  • Syncs shouldn't be status updates: The weekly sync is not meant to be a status update. It's a time for discussion, reflection, and problem-solving. Avoid the temptation to simply report on progress and instead focus on identifying challenges and finding solutions.

With this framework, you’re equipped to go beyond copying Google and actually make OKRs work for your business. If you’re interested in seeing the full video of Christian’s talk on OKRs, sign up for the Chief of Staff Network here.

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