Growth: The OKR Way

“An effective goal-setting system starts with disciplined thinking at the top, with leaders who invest the time and energy to choose what counts” ― John Doerr

Companies and founders are always looking for ways to rapidly grow their companies and boost team productivity. One key question we get from founders is “How do I inspire my team and get them to execute effectively?” The OKR is a great framework to inspire your team and get everyone aligned and working towards the big picture.

The acronym OKR stands for Objectives and Key Results, a popular goal management framework created by Andy Grove who has been referred to as one of the best managers of all time but popularized by John Doerr, who was an early investor in Google and he introduced Larry and Sergey to the framework. OKR quickly became an important focus for Google, and other companies such as LinkedIn, Twitter, Airbnb, Uber, and even Walmart have since followed suit.

It’s also increasingly becoming the default framework for lots of fast-growing startups across Africa and interestingly quite a number of companies in our portfolio have also adopted the OKR framework.

OKRs is a goal-setting framework that helps organizations define goals or objectives and then track the outcome. John Doerr’s OKR formula is to set an objective, which is “what I want to have accomplished,” and the key results, which are “how I’m going to get it done.”

Let’s take a dive into what each acronym for better understanding.

What is the Objective?

An Objective is a description of a goal to be achieved in the future, this is usually measured quarterly or annually. An Objective sets a clear direction and provides motivation.

What is a Key Result?

A Key Result is a metric with a starting value and a target value that measures progress towards an Objective. Key results measure the achievement of an objective. You can think of this as a signpost with a distance that shows how close you are to your Objective.

Objectives are typically large, bold and aspirational while key results are aggressive, be difficult but not impossible, but always measurable, time-bound, and limited in number (typically 5).

Examples of Objectives:

• Become a Market Leader in Payments in Nigeria.
• Build the best browser in the world.

Let’s take both examples and attempt to set key results for them.

1.

Objective — Become a market leader in Payments in Nigeria

Key Results –

• Grow userbase from 2k merchants to 10k merchants by end of Q2.
• Launch an offline payment feature for merchants by end of Q2.
• Reduce customer churn from 30% to 10%

This can be expanded further, but the catch is to have 5 or less Key results.

2.

Objective — Build the best browser in the world

As the true test of this is in the usage, my key result could be something as simple as:

Key Result — Grow user base from 1M to 20 million monthly active users by the end of the year.

Before writing an OKR, you need a good understanding of what you want to accomplish. Think of the potential objective you would like to achieve and ask yourself the following questions:

• Does the objective help achieve the company goal?
• Is it inspiring?
• Does it move the company forward?
• Is it timebound?

Managers and teams across board should also set their OKRs in-line with the objective of the organization, individual team members should be allowed to come up with their own OKR and review with their managers to ensure it aligns with the wider company objective.

The framework is designed to help organizations establish far-reaching goals and when implemented effectively has the potential to accelerate growth.

You can read more here and here.

Inside VP

Come 13th October 2019, Ventures Platform, in partnership with Endeavor, will host Efosa Ojomo, co-author of The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty in an event (Startup Insights) themed “Innovating for the Mass Market”. Attendees will get a chance to learn about how the private sector, particularly startups, can unlock the potential of under-served sectors and populations by building market-creating innovations and tackling non-consumption.

Click on this link to apply for a slot — https://bit.ly/2zbtEu8

Portfolio Chatter

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What We Are Reading

The Mystery of Market Size in Nigeria

Navigating the Shift from first-time founder to seasoned Exec

Measure What Matters by John Doerr. Find here.

See you next month,

V.