Strategy in Action at Hevo: Implementing and Achieving Aspirational Goals

Our previous blog was a bird’s-eye view of various functions of the Strategy team at Hevo. Let’s now zoom in and expand on one of these — the planning and implementation of growth and operations strategy.

Once an organization has achieved its product-market fit and set up the initial functions, it needs to start thinking about creating a growth and operations engine that can work effectively on a day-to-day basis. This engine must be honed in a way that every function is working in tandem toward the organization’s goals, with a way to measure and improve the health of every nook and corner of the organization.

How can this engine be set up effectively? Let’s take a look at Hevo’s approach to this question.

Step 1: Setting Org-wide Goals — North Star Metrics

The organization’s goals depend on its stage and its vision for the future. For Hevo, we are at a stage where we are experiencing hypergrowth. So our north star metric (NSM) is to attain a certain growth in customers and revenue (ARR) with reasonable cost constraints. Our annual goals tie in with our vision of becoming a dominant player in our industry. For perspective, we are targeting to maintain the same growth rate which we have experienced over the last 2–3 years, though our scale is significantly bigger than the last 2 years. We are talking about 3x-4x annual growth at scale!

A company can always refer to historical data to understand what can be realistically achieved, but a good mantra is to always do better and surpass the past performance. Hence, we must set high aspirational goals for ourselves.

Aspirational goals also have second-order effects. They act as a war cry and help rally the entire organization towards achieving those goals. Whatever gets done in the organization has to be justified through the lens of achieving these goals.

Step 2: Translating Goals to Function Objectives

Different functions in the organization generally need to do two things right for the organization as a whole to meet its aspirational goals — 1. Improving existing processes and 2. Experimenting with new growth strategies.

For these to happen, functions need to have clarity on what they need to do to help achieve the goals. Hence, once we have set org-wide goals, we need to translate them into function-specific objectives.

Though a central Strategy team can help translate organizational goals into functional objectives, the functions themselves are the best judges of what can be accomplished within a certain time and constraints. Hence, the functional objectives need to be discussed and mutually agreed upon. This also ensures that the functions have strong ownership of what they have committed to delivering.

Without going deep into the semantics, we need to ensure that the functional objectives satisfy the following criteria -

• They tie with the organizational goals as directly as possible. This helps weed out non-essential activities.
• They can be achieved by specific functions as independently as possible. This creates a strong sense of internal ownership for the function.
• They can be measured as objectively as possible. This helps us to measure, establish a baseline, and improve them.
• They can be achieved within a certain timeframe. For example, all of our functions define their objectives monthly. If there are certain functional activities where effort and outcome don’t coincide in the same month, we try to break them down into sub-activities that have a clear effort-outcome connection in the same month.

A great example of such a breakdown is the goals for the Talent Acquisition (TA) function. Most of the time, the TA function’s activities are dependent on when other functions share their hiring requirements. Requirements can come at the beginning, middle, or end of the month. Hiring cycles usually span 1.5–2 months (or more for certain positions!). So, it is not possible to measure the outcome in the same month as when the hiring activity starts.

In order to solve this, we broke down the hiring process across certain stages with a clear timeline and defined outcomes for every stage. The stages are then mapped across different calendar months. In this way, the TA team knows the stage to be accomplished in each month and what the outcomes are of that stage.

There are always some exceptions to the above criteria, but establishing such parameters can help to define goals coherently.

Step 3: Top-down OKRs

Once functional leaders know what they need to achieve in a certain timeframe, they must also communicate the same to their entire team. In addition to ensuring that the function has an actionable plan for achieving its objectives, this step also helps team members realize how their efforts tie back to the organizational goals.

The functional objectives are translated to level 2 and level 3 outputs and activities, which are basically individual OKRs. These outputs and activities are usually measured at a higher frequency than function objectives. For example, if the function has a monthly objective, the outputs and activities are measured weekly. These act as leading indicators of monthly performance and help us understand any issues early. This can help us correct the course, wherever required.

Breaking down functional OKRs into individual OKRs can help implement them throughout all levels of the organization. To do this, functional leaders need to think about the fundamental actions that move the needle on broad objectives. Each activity needs to have a measurable output.

Often, a final outcome can be dependent on some uncontrollable factors as well. In such a case, we need to ensure that if the responsible team or individual has made an honest effort towards the goal, there should be a fair evaluation of their effort.

The level 2 or level 3 activities are assigned to team members, generally, without any overlap. This would provide a clear direction to individuals within the team while ensuring that all activities are contributing directly to the organizational goals.

Step 4: Cadence and Problem Solving

The last step implementation step is to set up a cadence so that the organization’s progress can be measured on a regular basis. At Hevo, we have a weekly cadence with all functions. The leading indicators established in Step 3 can help us identify the bottlenecks across functions. If there is a significant shortfall or delay in achieving a certain output, we understand that there is a risk to the monthly objective. We then understand the issues and blockers that the function may have and help resolve those as quickly as possible. We usually see issues falling in any of the following 3 categories —

i. People — The people working on a specific task may not be the right fit, may not have had adequate training, or may have had other personal blockers during a particular week that affected their performance. Diagnosing this and figuring out how it can be avoided would lead to better results in the future.

ii. Process — The processes followed for the task may not be set up effectively, or the right parameters may not be measured. In such a case, it is crucial to identify shortfalls and change the process.

iii. Technology- This refers to the tools used by a team or individual to perform a task. The right technology can boost and accelerate performance, while performance is hindered when the right tools are not utilized.

Finally: Observing the Results

Though this top-down approach to OKR planning has been implemented recently, we can already see a difference in the way that functional heads think about and approach their goals. It is imperative in a growing organization to ensure that we move in tandem, rather than branching off into discrete departments that work independently of each other. This form of OKR planning means that the entire organization, from a department head to a newly-joined intern, is thinking clearly in terms of what we wish to accomplish and taking deliberate steps towards that.