How FreshBooks Stays Focused

FreshBooks sets its audacious objectives on a yearly and quarterly basis. When I say “objectives” I’m talking about things like Revenue targets, as well as delivering on major strategic initiatives.

Pioneered at Intel, OKRs help companies focus on what matters most.

To set and communicate these objectives at FreshBooks we use a methodology called Objectives & Key Results (OKRs), which was pioneered at Intel, and has since been adopted by the likes of Google, eBay, and many others in the Tech world. OKRs are used in these companies as a tool to help focus and align the efforts across several departments, as well as from top-to-bottom within departments. Google Venture’s Rick Klau goes in depth on how Google does it here.

A few quick definitions:

An Objective, is where you want to go. For example: “Win the Superbowl” might be an objective for a professional football team (admittedly, not a software company).

A Key Result, is how you know you’re on the path to getting there. For example: “Win 90% of home games” would be a key result for a professional football team. While winning those games doesn’t mean you’ve met your objective, it does indicate you’re on the right path towards achieving it.

Setting Product Development Objectives

At FreshBooks, we’ve adopted and adapted the OKR process for Product Development, and have reaped the benefits of greater focus and introspection surrounding our ability to plan, execute, and deliver within defined timeframes.

Here’s how we did it:

1. Leaders Set Objectives, Teams Set Key Results: The leadership team’s job is to point to the mountains that the team should climb, not to tell the team how to climb it. Have your leadership team set the top-level objectives for the department at the beginning of each quarter, but go no further than that. Bring those objectives to the teams that will be executing on them and have them compile their own Key Results. This creates shared ownership of the Objective, pushes the “how” down to the people with the most information on how to actually meet the objective, and increases the level of engagement the team has with meeting the objective.
2. Focus on Outcomes, rather than Deliverables: Where possible, make your Key Results the actual result of getting some body of work done. Rather than focusing purely on shipping something (a new feature for example), set targets around that feature’s adoption or impact on the business.
3. Set a Realistic Number of Objectives: When we first started OKRs we set 10 objectives. The purpose of OKRs is to help focus us, and focusing on 10 things ended up being in direct opposition to that goal. We’ve settled down and try to have no more than five objectives for the department per quarter.
4. Bang the Drum: What use are OKRs if nobody knows what they are, or how we’re tracking against them? Find ways to incorporate them into things like your Weekly Sprint Reviews, Weekly Operations Meetings, coffee stations, and other communication hubs. The more people know and understand the objectives, the better they can help the company achieve them.
5. Look Beyond Product Development: Don’t develop your OKRs in isolation from the rest of the company. Review them with the Marketing team, the Finance Team, and Business Development/Sales… they’ve also got their own objectives that if aligned with yours can have a huge impact on the business.
6. The Team Owns the Objective: When we started with OKRs, we would assign an Objective to a specific individual and tell them they “owned it”. Individual ownership disconnects the Objective from the team that’s executing on the work and in a sense insulates them from both success and failure. Instead, make the Team that’s responsible for execution responsible for the Objective, that way they feel both the pain of letting themselves down if they don’t hit the goal, as well as a sense of accomplishment if they do.

The best way to know if any of this will work for your company is to try it, let a full quarter pass, and then do a retrospective on how effective your OKR process was for that quarter. Then iterate on it, record what you learned, and try again for another quarter.

How will your organization stay focused this year?

Casey McKinnon is the Head of Product @ FreshBooks.com

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