Do you struggle to make progress with your goals and as a result, cannot grow your small business as you would like - with ease?
You need to be making measurable progress toward your biggest goals.
That old adage of “what can be measured can be managed” is a truism.
If you really want your team to take steps forward, setting OKRs is likely to get you where you want to be faster.
How can OKRs be used when growing your small business
OKR stands for objectives and key results..
It is a collaborative goal-setting methodology used by teams and individuals to set challenging, ambitious goals with measurable results.
OKRs are how you track progress, create alignment and encourage engagement around measurable goals.
You can read a good example at Atlassian, the huge software company.
The origin of OKRs is rooted in the “Management By Objectives” system that was founded by consultant and author, Peter Drucker.
Andrew Grove, the former CEO of Intel, then took the system and put it into a simpler form that answered two core questions:
- Where do I want to go?
- How will I pace myself to get there?
An objective in the OKR framework
As the name indicates, OKRs are split into two main pieces: objectives and key results.
Think of the objective as the goal that you’re setting.
With your team, you should brainstorm objectives by asking
“What are the most important needles we need to move this quarter?”
I like setting OKRs on a quarterly basis, as these objectives should be high-level and aspirational – not day-to-day tasks in the whirlwind of running and growing your small business.
I also suggest you introduce ‘sprints’ within each quarter.
These sprints focus on actions to achieve your objective and provide a higher level of accountability for your team.
EXAMPLE OBJECTIVE: Launch a client portal by the end of the quarter.
And what about key results?
OKRs themselves might not be easily measurable.
That’s the job of your key results, and measurable outcomes that indicate you've achieved your objective.
Don’t make the mistake of confusing key results with tasks and to-dos.
This is about identifying outcomes, not things for your team to get done.
So, make sure you're always pointing back to a measurable result.
EXAMPLE KEY RESULT: The new portal increases client feedback scores by 25%.
Why use OKRs to help a small business grow
Many great businesses use them for goal setting, such as Google, Netflix, Adobe, Samsung and Atlassian.
If it is ok for them, why not your small business.
But there are plenty of other reasons to use OKRs, including:
- Greater alignment: Everyone is on the same page about goals and success indicators - having everyone rowing in the same direction is critical
- Improved flexibility: Since OKRs are set quarterly, those shorter goal cycles allow more wiggle room
- Boosted accountability: Everybody knows exactly how success will be measured and who is responsible for making it happen, which is often a missing link, and
- Increased focus: OKRs must be thoughtful and well-defined, which boosts focus on the goals that really matter.
It’s easy to see why OKRs are used by so many successful and growing businesses.
How to set OKRs
To grow your small business, you must join the ranks of those teams and businesses who relentlessly pursue their goals.
Start by having a brainstorming session with your team to identify what you most want to achieve.
There’s probably going to be many ideas, and likely some debate, about what your objectives should be.
But LESS is more in this instance.
We recommend distilling them down to no more than five objectives for each quarter.
You’ll also want no more than three key results assigned to each objective, so you don’t add confusion.
Also, keep in mind that OKRs are a better fit for loftier, longer-term goals, and aligned to your strategic plan.
You’re not going to use this system to tackle one task on your daily to-do list, or a team project that’s wrapping up tomorrow.
With the above as context, following are the steps you and your team need to follow to set OKRs.
Step #1: Share the basics
If this is your first time using OKRs, a lot of this is going to be new to you and to your team members.
Save some time at the start to teach your team about the process and terminology so that they’re able to constructively add to the conversation.
Step #2: Set your objectives
Ask your team to brainstorm what big rocks you need to move in the quarter.
Give everyone some time to write their ideas on sticky notes and stick them at the front of the room.
When that’s done, group similar ideas together and have an open conversation to refine ideas and land on no more than five objectives that are most worth focusing on.
EXAMPLE OBJECTIVE: Create infographics for all blog posts.
Step #3: Identify your key results
You have your objectives, now it’s time for the team to think about what results you would see and measure if you actually reached that goal.
These should be your key results.
Remember, you don’t want more than three for each objective.
EXAMPLE KEY RESULT #1: Infographics improve the user’s time spent on page by 10%.
EXAMPLE KEY RESULT #2: Infographics are pinned on Pinterest at least 100 times each.
Step #4: Check yourself
Now review the objectives and key results you’ve come up with.
Are they unrealistic?
Or are they too easy?
Do you have too many?
Or not enough?
This is your chance to make some changes before finalising them.
Step #5: Schedule your monthly checkpoints
Like any other goal-setting method, OKRs are not “set it and forget it”.
You should be meeting with your team monthly to check in on how you’re tracking toward your objective by giving each key result a predicted end-of-quarter score.
OKRs are scored on a sliding scale between 0 and 1 that indicates whether you missed, came close to, or hit your target for the key result.
For example, if you’ve only improved the user’s average time spent on a single blog post by 3%, you would score that key result at a 0.3.
How do you stick to your OKRs
Your OKRs are set and now you and your team actually need to stick to them.
Following are a few strategies you can use to increase buy-in and commitment to those goals:
- Involve your team in the process: Setting your OKRs should be a collaborative process with your team. These goals shouldn’t be handed down from above
- Assign owners: Every key result should be assigned an owner, so that everyone knows who’s responsible for what. It adds clarity, while also boosting accountability
- Don’t skip your check-in sessions: Things get busy, and you’d rather spend time working toward those goals than checking in on them. Resist that temptation! Those check-in sessions are important for proactively swerving around problems, monitoring your progress and bringing accountability to the process, and
- Be patient: Your OKRs might not be perfect the first time. The good news is that you’ll set them quarterly, so you’ll refine the process over time.
Some examples of OKRs
Here is an OKR example for a human resources teams:
OBJECTIVE: Improve employee engagement levels.
KEY RESULT #1: Boost attendance at monthly company social events by 30%.
KEY RESULT #2: Increase scores on employee feedback surveys by 15%.
And an OKR example for a sales teams:
OBJECTIVE: Increase our recurring revenues.
KEY RESULT #1: Decrease our customer churn rate to less than 5%.
KEY RESULT #2: Increase upgrades from free accounts to premium accounts by 40%.
An OKR example for a customer support team:
OBJECTIVE: Improve customer satisfaction.
KEY RESULT #1: Reduce wait time on customer support tickets to 24 hours.
KEY RESULT #2: Improve the Net Promoter Score (NPS) to 75 (read our blog on NPS, and listen to this 10 minute cast)
An OKR example for a product management team:
OBJECTIVE: Roll out a refreshed version of our main product.
KEY RESULT #1: Obtain 2,000 new product sign-ups.
KEY RESULT #2: Have product reviews published on 10 major industry websites.
What makes OKRs different from other goal-setting frameworks?
Two other common goal-setting methods are KPIs and SMART goals.
OKRs v KPIs
Key Performance Indicators (KPIs) require that you assign a measurable target to an existing project or process (unlike with OKRs, where setting a new objective is the first step).
KPI EXAMPLE: Imagine you’re already working on improving the effectiveness of your customer support team and aren’t sure when you can check that goal off as “done.”
You could assign a KPI of 45 resolved customer tickets per week.
OKRs v SMART goals
SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound.
When setting goals using this system, you should check all of these boxes to ensure that it sets you up for success.
It’s also important to note that with SMART goals all criteria are captured in a single statement.
There aren’t two separate pieces like with OKRs.
SMART GOAL EXAMPLE: Resolve 45 customer support tickets per week during this month in order to improve the effectiveness of our customer support team.
Go for the goals
OKRs are great for your team in order to set aspirational objectives and clearly define what success looks like.
More wins with less frustration.
The use of software to help manage and monitor your OKRs can provide efficiency.
Some options are as follows:
Also, have a look at Atlassian's OKR Guide & Template.
So in summary, the benefits of OKRs are:
- Focus - Exceptional focus on what matters
- Alignment - Better alignment to a common goal
- Commitment - Achieve engagement and motivation
- Tracking - Measurement and tracking of key results, and
- Stretching - Drive and builds a high-performance culture.
The ‘Measure What Matter: The Simple Idea that Drives 10x Growth’ book by John Doerr is a revolutionary approach to business that has been adopted by some of Silicon Valley's most successful startups.
It is a movement that is behind the explosive growth of Intel, Google, Amazon and Uber and many more.
‘Measure What Matters’ is about using Objectives and Key Results (or OKRs) to make tough choices on business priorities.
It's about communicating these objectives throughout the company from entry level to CEO and it's about collecting timely, relevant data to track progress - to measure what matters.
When Google first started out, its founders had amazing technology, entrepreneurial energy and sky-high ambition but no business plan.
John Doerr taught them a proven approach to operating excellence that has helped them achieve greatness.
He has since shared OKRs with more than fifty companies with outstanding success.
In this book, Larry Page, Bill Gates, Bono, Sheryl Sandberg and many more explain how OKRs have helped them exceed all expectations and run their organisations with focus and agility.
In our ‘Business Transformation Program’ we show you the best strategic framework tool to use, like OKRs. This tool is simple, powerful and free. Join the ‘Business Transformation Program’ waitlist.
