It’s been an action packed quarter for me – I added 20k to my monthly FBA revenue, launched a private label product(sort of), doubled my Etsy revenue and opened the doors on my new graphic design business.
Would you believe that despite all of that, I am (happily) on course to fail 75% of the goals I set for my business this quarter?
How could it be that I am so smitten with my apparent failure to achieve my goals? How could it be that the results I achieved this quarter didn’t count as success?
The answer, is because I have deployed an aggressive and powerful goal setting system across my entire business – the same exact goal setting system that Google has been using for almost 20 years (since 1999!) – a system called “OKR”.
Google made it famous – but they aren’t the only ones using it.. here’s a short list of other companies that use OKR’s
The list goes on and on – for a full list check out this article
The genius of the OKR is that it can be deployed by any company, of any size – even if you are a one person company (if you are a one person company, I have a short section for you at the end on how to adapt this process).
OKRs Solve Your Focus Problem And Drive Results
If you’ve ever felt adrift in the myriad of things you could be doing every day, or if you find yourself easily distracted by shiny new “Opportunities” that pop up on the web, then you and your company are probably suffering from a lack of focus.
“After you start using OKRs, you and your company will be focused on results with a ruthless efficiency that ties together every person, team, and division in your organization.”
Do you ever play “Kick the can” with an important to-do? You know, set a deadline for it and then kick it down the road when it comes up?
Have you found yourself excited about a project and then you never manage to finish it?
You’re not alone.
OKRs solve your focus problem by galvanizing your goals and insisting on a relentless focus on them.
After you start using OKRs, you and your company will be focused on results with a ruthless efficiency that ties together every person, team, and division in your organization.
In the next section I am going to share what exactly they are but before I do – it’s crucial that you understand that the magic behind an OKR is not just “What it is” but how you deploy it – in other words, the system you put in place to use it.
Later in this article, I’ll share that system with you so you can use it
Use Objectives and Key Results To Measure Your Success
OKR stands for “Objectives and Key Results” which on the surface is easy enough to explain.
You start by defining a time period (I use quarters) and then an objective for the time period.
Your objective does not need to be quantifiable – examples include things like…
Expand into a new market/niche (Be specific)
Deliver a better customer service experience
Add more users/subscribers/customers
Increase our social media presence
Your objective is the “Goal” and it should describe the results you are looking for. If you have a team of people, it’s important that the goal is inspirational and easy to understand (and get on board with)
For each objective, write Key Results that answer the question “How do we know if we have succeeded in our objective?”
If your objective is “Expand into a new market” Then a key result might be “Have 25% of weekly revenue originating from this market”
Examples Of OKRs
Objective: Deliver a better customer service experience
Key Result: Create a process for polling customers and integrate it into the website by (date)
In this case, the key result is binary – did you, or didn’t you? That’s important to remember when we come to scoring later
Objective: Add more subscribers to our mailing list
Key Result: 1,000 Total email subscribers
This key result is measurable – at the end of the period you can see how many subscribers you have and score your progress.
Objective: Increase our social media presence
Key Result: Increase post engagement by 100% from an average of 200 engagements to 400 engagements per post
And in this example you are bench marking where you are now and where you should be.
Remember: Key Results must be measurable but Objectives don’t have to be
Each entity in your organization (Person, team) should have 2-4 Objectives, and those objectives should each have 2-4 Key Results. 4 Objectives with 4 key results is a lot because as you’ll learn, when you write your OKRs your goal should be failure.
7 OKR Features That Will Make You Unstoppable
Anyone who has had to draft another quarterly S.M.A.R.T. goal at a corporation or business, or who has written their own for their own business, can probably tell you that after goals are written, they go in the top drawer and are forgotten about until it’s time to rewrite them.
That won’t happen when you use OKRs
#1 – Everyone Writes Their Own. No One Hands Them To You
Crucially, everyone writes their own OKRs. You do not get handed an OKR from the boss, and you don’t hand your employees one either.
It’s fine (and encouraged) to have a dialogue with your employees, managers and peers about your OKRs.
Especially in the beginning it will be helpful to have a conversation about them in order to get everyone’s gears going, but at the end of the day, each entity writes their own OKRs because they need to own them.
#2 – They Aren’t Tied To Performance
You absolutely can NOT tie an OKR to a performance evaluation. The goal of an OKR is not to decide if an employee is deserving of a raise, or how well they are doing. The goal of an OKR is to get BIG, measurable results from your team that aligns with your organizational goals.
If you tie the OKR to a merit raise, then naturally your team will fear failing. If they fear failing they will lower the bar for themselves and therefore achieve diminished results.
#3 – You Score Yourself Based On Your Results
At the end of the quarter you and your team will score yourself based on your key results
- Score each key result on a scale of 1-10 (10 is best)
- Average your score across the keywords to get your score for the objective
- Have a conversation with your team about the scores and what they mean going forward
The goal is to consistently score a 6-7 on your objectives.
Scores in the 8-10 range
These scores indicate that your key results are not aggressive enough – next time push yourself further
Scores in the 1-5 range
A score in this range means that something broke down during the quarter. Maybe it was time, maybe it was a strategy shift, or lack of skill. Use it as a learning experience for next time
Examples of Key Results and Scores
For the key result mentioned above “1,000 Total Email subscribers”, if you have 1,000 at the end of the period you would score yourself a 10, if you have 700, then a 7.
You may have a key result like this: “Create a marketing plan for Pinterest that increases our daily pinning to at least 20 per day and drives at least $500 weekly revenue from Pinterest”
Let’s say that at the end of the period you have this result: “I created a marketing plan but we didn’t put it into action” I would score that a 1
If you created the marketing plan and increased your daily pinning to 20 per day but not the revenue, then you might score yourself a 5-6
Don’t get too hung up on the score – the important thing that needs to be accomplished when it comes to scoring is to make sure your OKRs are aggressive enough, and to create a feedback loop where you can troubleshoot problems and figure out what is working and what isn’t.
Lastly – Since OKRs are self written, they also need to be self scored – If you have employees, you can provide input and feedback, but don’t do the scoring for them.
#4 – OKRs Force Teams, Departments and People To Align Their Goals
This is one of my favorite things – and if you have employees you are going to love it too.
The OKR process starts at the company level – You as the business owner write the OKRs for your company.
Then, each team in your company writes their own OKRs which should contribute to the company wide OKR
Finally, each employee on the team writes their own personal OKRs with the goal of having them align with the team level OKRs
How I Pulled This Off In My Company
Company Level (for Graphic Design Agency)
Objective: Increase revenue and client base
Key Result: Have at least 15 client referrals over the period
My Personal OKR
Objective: Increase Revenue and Client Base
Key Result: Contact 50 shopify store owners to generate $500/mo in additional revenue
My Designers OKR
Objective: Drive Repeat Customers and Great Customer Satisfaction
Key Result: Maintain a revision rate of less than 100%
#5 – Weekly Check-ins Keep Your OKRs Relevant
As I said earlier, the systems that you use to execute your OKRs are at least as, or more important than the actual OKRs.
After you have them written don’t just stash them away in a drawer somewhere, or some miscellaneous google doc that no one opens again.
Keep them front and center in your business. The best way to do this is to make checking in on your OKRs a mandatory task every single week.
In my company every employee and myself must write an update on their OKR process every Friday. In this way we review what our OKRs are, what progress we are making, what is holding us back etc.
Another benefit of checking in every week on Friday is that on Monday when we are planning our activity for the week, our OKRs are on the top of our minds.
I can very easily evaluate a new shiny object or “Opportunity” or even a task on my to-do list and ask “Is this going to contribute to my OKR?” if not, then it gets sidelined.
#6 – Transparency Fosters Innovation
If you have a team of people, everyones OKR should be available for anyone to read. None of this happens behind closed doors or in some proprietary software which no one but you and a manager can access.
Because the OKRs are transparent and publicly available, it should encourage conversation between team members.
Not only will individual employees be able to set their OKRs based on what the rest of the team is doing, but they can provide insight and feedback which will get the company closer to the results it is planning for.
#7 – OKRs Encourage Growth Through Failing Forward
A key part of healthy growth is a fair amount of failing.
By setting objectives which you will only score a 7/10 on, you are baking failure directly into your process.
You will force you and your team to make big leaps, push themselves, innovate, come up with solutions… in short, do everything they can to achieve a difficult goal.
Since failing is the best way to learn, you and your team will get better with every iteration of OKR, and your results will get better too.
How To Get Started With OKRs
#1 – Set The Calendar
Figure out what time period you will use (I suggest quarters) Then schedule a “Planning/Scoring” Period which starts a week before the period ends and a week after the new period begins. Put these on a calendar and share it with your team.
#2 – Get Your Team On Board
If you have a team, get them on board with the process by sharing this article with them. Another good resource you should check out (and share with your team) is this video from Google Ventures which goes through the process.
Decide what day of the week your team should report on their OKR status and have each team member add it to their calendar – again, enforce this.
#3 – Schedule a Kick Off Meeting
In your kick off meeting, each person should come prepared with their OKRs, which they will share with everyone else and then receive feedback from everyone involved.
Obviously, If you have a bigger organization then the kick off meeting will need to be segmented
Sidenote: Even though the OKR results are not included on my employees performance evaluation, their participation in the process IS included
Fast Action Tips
Take It Easy Your First Quarter
Team members will need some time to get used to them. Set your goals aggressively, but don’t pile on a ton of objectives/key results. If everyone has at least one objective with two key results, that’s a great starting point.
Use software you already have
The best software is going to be the one you use regularly. Google docs is typically a slam dunk and my team uses Asana every single day. We use Asana to manage our OKRs
Adapting OKRs For Solopreneurs
If you don’t have a team, or if you have a small team, don’t let that discourage you from using OKRs.
It’s true that it’s easier to be accountable when a team of people is participating in this, but there are still a lot of benefits to implementing OKRs for a one person team.
Decide if your OKRs are going to be personal, or company, but don’t do both.
Follow the exact same process I’ve outlined above – including scheduling time on your calendar every week to update your OKRs.
Consider sharing your OKRs, or at least your objective with another business owner and seeing if they would be willing to be your accountability partner (share this article with them to get them interested and up to speed)
Don’t Wait To Get Started
If it’s in the middle of a quarter when you are reading this, it may be tempting to put it off until next quarter – Don’t do it!
You can get this started no matter what time of year it is which will give you and your team valuable practice before the next full quarter rolls around and you’ll start getting into the habit of engaging with this process every day.
Before you know it, you’ll be failing as often as I have this quarter (I missed my FBA Goal by $5k by the way).