If a team doesn’t know what their goal is, it’s impossible for them to know what to focus on, or to take the right action to grow your business the way you want. This is why goal-setting frameworks help startups grow.
Because of the metrics and goal-oriented nature of our product at Geckoboard, we’ve been thinking a lot about goal-setting and using the right frameworks for the marketing team. We ran an experiment of using Objectives and Key Results (OKRs) over the last 6+ months with some success, and now we’re rolling it into other parts of the business, such as Customer Success.
As a very brief primer, OKRs is a framework popularized by Google to help you set, track, and execute aggressive goals. When implemented properly, OKRs create a singular focus within a business, stretch the limits of what’s possible, and keep every employee accountable for company growth. For more background on OKRs, my colleague Laura wrote this helpful post.
Here, I’m skipping past OKRs 101 to share the tips I’ve learned for effectively setting OKRs. Then, I’ll dive into the lessons we’ve learned along the way because setting proper OKRs takes some trial and error, and we’ve learned from a few errors so far.
1) Make your key results percentage growth, not actual numbers
When it comes to defining key results for pipeline targets, don’t set actual numbers. Rather, define percentage uplifts. Then score key results on a scale of 0 to 1 (with 0.6 to 0.7 being par).
Let’s say you need to generate 1,000 leads in a particular quarter. You set that as a key result, but get 600 leads. The score would be a 0.6. Looks good on the face of it. But if you got 650 leads the quarter before, you’re not actually growing. However, your OKR score suggests you’re doing just fine. If your key result was “increase leads by 25% vs. the previous quarter,” then any score over 0 will still mean growth for your business.
2) Set your OKRs quarterly
There’s lots of research suggesting that objective-setting in high growth businesses should be quarterly, as things change quickly. I favor quarterly because anything more regular than that will create huge administrative overhead for you — to the point where you will never do anything but set and score objectives and key results.
3) Don’t set more than 4 objectives, as it dilutes focus
I’ve found 3–4 objectives to be optimum. Any less than that, and you’re not quite pushed hard enough. Any more creates a loss of focus.
4) Set 3–5 key results per objective
Less than three key results or metrics per an objective tends to ignore that each key metric has supporting metrics to ensure you achieve that key metric in a sensible way.
You can read a bit more about KPIs and supporting metrics here. Too many, and you counteract the focus that OKRs are meant to bring.
5) Set aggressive goals
If you want to drive growth, you need to set aggressive goals. I often say to my team when we’re defining key results that it’ll be equally disappointing if you get a 0 or a 1 when it comes to scoring. Getting a 1 suggests you aren’t thinking big enough when setting goals, and that’s not the mindset needed for growth.
6) Create buy-in through collaboration
If you set targets and tell your team what they are, then they won’t have much accountability or buy-in for them. Working together on defining aggressive but realistic targets based on pipeline goals creates far greater accountability and buy-in.
Consider letting your team members set their own OKRs, then work with them on tweaks to match them back to the overall company goals.
Other lessons learned in setting OKRs
As you dive into the OKR process, keep these tips in mind.
- Get your CEO to define your focus: work with your CEO to define the One Metric That Matters. Taken from the Lean Analytics book, this is a single number that you care the most about at the current stage of your growing company. It will change as you evolve, but at any given time, there’s one metric you should care about above all else. All of your team and departmental metrics will feed into and move forward this one metric.
- Review if your targets are realistic based on people and budget: you don’t want to set your team up for failure. Make sure they have the resources needed to create action!
- Make your OKRs visible at all times: to encourage collaboration and accountability.
- Review progress in regular meetings: let your OKRs be the driver of your weekly one-on-ones with your team members to ensure you’re on track and prioritize the right tasks.
- Detach OKR scoring from compensation reviews: OKRs are simply a framework for focusing your business. If compensation is connected to OKRs then it encourages people to fudge figures and set easily attainable key results, defeating their purpose.
There is no silver bullet when it comes to choosing a goal-setting framework. Many startups succeed using various different ones.
However, if your business is inherently metrics focused, has clear goals that can waterfall down the business, and you’re in a growth mindset — then OKRs are a fantastic option. They push the boundaries of what is possible with clear metrics and goals.
Just make sure objectives are clearly aligned around a common business focus and set of priorities. Also be sure that key results can’t be fudged, will drive growth, and don’t exceed four focused and related metrics. Hope that helps, if you’re thinking of trying the same!