As you scale up your business keeping every single individual tightly aligned to achieve company goals is very difficult. You’re hiring lots of new talent every month while the complexity of your product expands, initiatives pop up, new departments are born and strategies evolve — so how do you make sure everyone is going in the same direction, understand the goals, and how do you measure that without killing the drive?
There’s an ever-growing number of silver-bullet practices out there that promise miracles for scaleup entrepreneurs to choose from. It’s the usual list of three-letter-acronyms and made-up terms that sound like something you always wanted to do but just couldn’t find the word for it.
I’ve tried a fair share of them with various degrees of success in my 20+ years of managing companies and teams. Some failed due to my incompetence, some due to my misunderestimation of their application or level of complexity, and some failed simply because they were little more than buzzwords invented by authors to sell the eponymous books and lectures to tired and burned-out entrepreneurs looking for a quick way out of the hamster wheel.
I’ve tried implementing ROWE (which would be an extended-three-letter acronym), the result-oriented work environment, that ended up in the failed-miserably corner, along with The Calm Company, which proposes you don’t have to make plans or pursue goals, and peppers the “manifesto” with more f-words per page than Tony Montana for no apparent reason other than trying to be edgy. There’s also silver-bullet strategies in this corner, such as Blitzscaling, which is undoubtedly a catchy word, but a reckless technique for any startup that hasn’t got unlimited financial backing. And by unlimited, I mean Vision Fund unlimited. Silicon Valley demigod Reid Hoffman came up with the technique and described it in detail in his suspiciously how-to-get-rich-quick titled book Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies, where he argues that you should “scale up at a dizzying pace that blows competitors out of the water.” Who knew you can blow the competition out of the water when you have oodles of cash?
In the other corner, the succeeded-awesomely corner is, for example, Gino Wickman’s Traction approach, which is a practical, down-to-earth guide on how to run all the horizontals of your growing business with straightforward systems and techniques. Interestingly, among them, Wickman describes something he calls Rocks, which are 90-day plans.
And this brings us to a similar, but much deeper management tool, called OKRs, where a 90-day timeline is a crucial element of this framework which helps you align the entire company and define and track objectives and their outcomes. It stands for Objectives and Key Results, and today I am going to briefly describe what OKRs are and the hands-on experience I had implementing them.
OKRs are a 30+ Years Tried and Tested Management Tool
I’d recommend sufficient skepticism before investing time and effort into exploring a scaleup technique, let alone implementing one. Remember, if it looks like bullshit, smells like bullshit, and has a bullshit-like name, then it probably is bullshit.
Check for how long a technique has been around and how successful it is in businesses similar to yours. If a technique needs to be explained “until we’re blue in the face”, stay away. If it promises something impossible or anything really quickly, you’re better off buying a lottery ticket — at least you have the chance to get some of the money back.
When I first heard of OKRs I had reservations and thought of it as another passing fad — like many I’ve tried before.
However, OKR’s have been around since 1983, developed at Intel by Andy Grove and further refined for Google by John Doerr. The Silicon Valley god Larry Page credited the technique saying “OKRs have helped lead us to 10x growth, many times over”.
Since becoming popular at Google, OKRs have been implemented in several other similar tech businesses, such as LinkedIn, Twitter, Uber, and more.
These are some good credentials, but I encourage you to be skeptical and research the technique’s track record in-depth before moving on with it.
Introducing OKRs to your scaleup isn’t just a matter of copying the way Google uses them. Google certainly isn’t an average company — they’ve spent over 20 years growing, scaling, and experimenting with how their internal goal-setting structure works. How Google (or any other company) uses OKRs will be different than how you will.
At its core, OKRs aren’t a methodology. There’s no set path or steps you take for bringing it into your scaleup. Instead, it’s a set of practices and ideals that you should understand and customize for your business.
OKRs in Practice
Obviously a lot has been written about OKRs and their usage and implementation, so I won’t waste much time with that as there are great materials out there. Here are a couple of resources to get you going:
- A high-level TED Talk intro to OKRs by the Man Himself, John Doerr
- An outline of OKRs
- A Google Ventures lecture about how Google uses OKRs
- OKR examples for various departments (including Sales for all those who think sales must have KPIs)
- OKR template in Google Docs
But, let’s look at what may cause road bumps — from my experience — if you decide to introduce OKRs in your scaleup.
OKRs are not KPIs
The first challenge I usually had when introducing OKRs was the confusion with KPIs. Just like I was, people are skeptical about introducing another performance/evaluation tool. But, OKRs are not an employee evaluation tool. OKRs are a management tool.
On the surface, they indeed look very similar, but they are fundamentally different. In the world of KPIs people will invariably set their indicators so that they will be achieved.
The reason for this is usually their paychecks or bonuses or the job itself depends on the performance. When you set KPIs with your employees, they will sandbag you and push back the indicators to the extent they are achievable. Which is understandable since the KPIs are of an existential nature to their lives.
On top of that, people will do whatever it takes to achieve the KPIs, many times at the expense of company goals, company culture, ethical and moral norms or even at the expense of colleagues. Again, this is somewhat understandable as the KPIs inherently create an internally competitive environment.
Obviously, you don’t want average results that stem from sandbagged KPIs and a team that will go to toxic lengths to get the bonus. This is not how you scale up.
OKRs are equally measurable but are not in any way linked to employees’ performance. You should never discuss OKRs at your employee performance reviews. Remember, OKRs are not an employee evaluation
tool. OKRs are a management tool.
Additionally, objectives should be set so that they are a stretch goal — if your team achieves 60-70% of the objective, they’re spot on. 100% means your objectives were not stretched enough.
As such, OKRs are ambitious, aspirational, and cooperative. If KPIs are roof shots, OKRs are moonshots.
Align With Company’s Strategy and Goals
I’m assuming you have already set your business strategy and goals, the Northstar metric, your BHAG, etc. But it’s okay if you haven’t; OKRs are a great motivation to kick off your strategy and goal-setting efforts.
In my experience, we had already set the strategy and goals, but it turned out they were very nebulous and intangible. OKRs workshops helped us tremendously with setting very concrete and laser-focused goals for the business.
If necessary, postpone the introduction of OKRs and go offsite to define the strategy and goals. This is what we did in one instance and it was great.
Either way, when you set OKRs, make sure they tightly align with your company’s main business strategy and goals. Once the organization knows what it’s focused on and how it will measure success, it’s easier for individual team members to connect their projects with the company objectives.
Achieve Internal Buy-In
Another mistake I made was a brute-force attempt to introduce OKRs in one of the ventures I worked at. I assumed everyone understood and loved the concept as much as I did, but it turned out the perception was quite different. People saw it as just another time-waster and weren’t very keen on adopting the OKRs.
Start small and introduce OKRs in a single department, headed either by you or someone who’s got an affinity and prior knowledge of this management tool. When people realize how cool it is and how aligned the department is, they will be your internal champions and your company-wide implementation will be much easier and more successful.
Once you’ve got the high-level buy-in and have started OKR workshops, make sure the objectives are supported by everyone in your scaleup. Once everyone agrees on what the most important objectives are, it can be easier to say no to the less important ideas. With OKRs, saying no isn’t a political or emotional debate. It becomes a rational response to a commitment that the entire organization has already made.
Make Sure OKRs are Adaptable and Agile
OKRs are ambitious because they leave room for experimentation and growth. If you’re too committed to a single path to success, you might be limiting your team’s creativity and missing out on big opportunities. Make sure your Key Results are adaptable and agile enough that they can be completed in many ways.
Have Clear Deadlines
OKRs can be incredibly motivating. As long as they have a strict time frame. Set a strong deadline and then check in weekly, monthly, or quarterly on progress (whatever works for your team and your communication style.)
Make OKRs Measurable and Progress-Based
Can you put a numerical value on the result you want to see? If not, you don’t have a good Key Result.
Make OKRs Aspirational
Does your OKR get your team excited? Can you set them off towards a moonshot idea where even moving the needle a bit can be seen as a success? With OKRs, the goal isn’t to always hit 100%. Make sure you’re pushing your team while staying within the bounds of what’s realistic.
Not A Silver Bullet
OKRs are a powerful tool, but they’re not a silver bullet for goal setting when scaling up. Every methodology has its upsides and downsides and OKRs are no different. What makes OKRs different is that they’re not simply just a way to set goals.
OKRs communicate strategy and priorities from the highest level right down to each individual team member.
They allow team leaders to push groups in the right direction while giving them constraints to make sure work gets done. They’re fantastic tools not just for moving the needle, but for focus, prioritization, and clear communication.