Lessons From A Failed Founder #5: How OKRs Boost Your Startup (1)
An introduction to Objective Key Results and how the framework will guide you and your business for the rest of your life. Part one.
This isn’t going to be your average “lessons learnt” post, as our startup never got around to even talking about ways to measure our progress. While we managed to craft a strong identity and a solid go to market strategy, we were hopelessly naive when it came to executing, monitoring and optimising the 1001 things we tried to accomplish.
Truth is, we kind of knew what KPIs (Key Performance Indicators) were, but we just looked at them as yet another percentage in an Excel spreadsheet. We were also dabbling with some dashboards and reporting tools, but they were mostly keeping track of vanity metrics. However, we had never heard of OKRs, short for Objectives and Key Results.
Once you start using OKRs, you can’t imagine working a single day without them.
Some years and a couple of startups later, I am a strong advocate for OKRs and will challenge every founder who says they have no need for key results. If I had to pitch its usefulness to you, I would only say: Objectives and their Key Results keep you focused on the big picture. It’s not a list of to-do’s, but rather a clear vision of where you want to be.
Objectives and Key Results is a decades-old framework revered by the likes of Google and Intel. The funny thing is: They didn’t start using them when they were already rolling in the dough. OKRs is what kickstarted their path to greatness. These companies recognised that a list of to-do’s wasn’t going to cut it: They wanted to actively work towards their bigger goals.
Before you even think of setting Objectives, let alone Key Results, I encourage you to first work on your company’s Vision and Mission, followed by a solid strategy for the coming two years. Ask yourself the hard questions: Where are we now, where do we want to be in two years? What do we need to do to get there, what will it take in terms of funding?
Objectives let you cut up your two-year strategy into bite-sized chunks, allowing you to focus and prioritise.
Once you got those questions figured out, the answers will present themselves automatically. Remember, think big! Strategy is not about the status quo, rather it focuses on roadmapping where you want to be! And as you lay out your own path to greatness, you’ll find the prospect of getting all of that done extremely daunting. Don’t worry, that’s normal!
This is where OKRs finally come into play. The framework allows you to cut up your strategies, just as you cut up the two years worth of strategy into quarterly chunks. Just so I haven’t lost you: A two-year strategy contains eight quarters. That’s eight sprints to keep running towards your bigger picture goals. Eight opportunities to regroup and focus.
These quarters are made up of Objectives supporting the overall strategy. Every three months you ask yourself: “Where do I want us to be by the end of the quarter? How does it support us in achieving our two-year strategy?” The Objectives should be formulated in such a way that they inspire people. So ditch the numbers, for now, and focus on storytelling.
The Key Results are there to keep track of progress. Simply put: They tell you how close you are to reaching your quarterly Objectives. KRs are by definition quantitative. Be it percentages, scores or a x/10 type of trust indicator — Key Results don’t beat around the bush and they put all the buts, ifs and excuses to rest. Numbers don’t lie!
Key Results don’t beat around the bush: They put all the buts, ifs and other excuses to rest.
Just to recap what OKRs are: The Objectives are inspiring, almost visionary statements about where you want your company / a department to be in three months. They don’t mention any numbers, this is what the three to five Key Results are for. By the end of the quarter, the Key Results should all look like 10/10 or 100%.
Now, to make sure you don’t consider OKRs as yet another project management tool, I created this diagram to show you what you, as a founder, should focus on:
Trust your management team and your employees to do whatever is necessary to ensure 100% completion for every Key Result. Remember you hired them for a reason: They are talented adults who are fully capable to get things done. You and your co-founders/managers will therefore only discuss the quarter’s Objectives and Key Results. No micro-managing!
In the next article, I will provide you with examples of real Objectives and Key Results, how to implement them in phases and how you create a weekly cadence of review and debate to keep every single member of the team engaged. The article will finish with a public Google Spreadsheet that allows you to keep track of all your OKRs.
If you’ve worked with OKRs before, please share your thoughts in the comments: We can all learn from each other.
Objectives & Key Results allow you to plan, execute, and celebrate!
Lessons From A Failed Founder is a series of blog posts by a thirty-something entrepreneur who made all the mistakes in the big startup playbook, and then some. My posts are no pearls of wisdom: Consider them the cautionary tales of a young founder who wants you to avoid making the same mistakes.
Feel free to reach out to me at failedfounder{AT}gmail.com
