To accelerate growth and get results faster, CEO’s & companies need a simple, repeatable & scalable recipe (a.k.a process) to drive execution on company objectives. The recipe that puts the discipline of thinking, planning and executing WHAT needs to be achieved and HOW it can be achieved in your teams; every quarter.
OKR is one such recipe used successfully by many fast growing companies. qilo “OKR Implementation Handbook” gives you step by step recipe (a.ka. process) to implement OKR in your company.
qilo's OKR Implementation Handbook is goes beyond the basic introduction of Objectives and Key Results. We are sharing a valiable lessons from our number of implementations and failures we have seen during our journey till date.
Most companies today are running on practices & principles defined around 50 years back, invented & promoted by Ford and GE. But many new age companies like Google, Amazon and Netflix have adopted new practices and principles (sometimes called as Agile management practices) that enables them to grow faster. Google, Amazon and Netflix are todays Fords and GE’s. These new age giants might have different products, services or business model, but if you look at their new practices and principles, they can be applied & adapted in any kind of organization.
Adopting these new agile management practices are imperative because new entrants and companies from emerging markets are arriving on the scene and challenging once dominant players. Technology sector companies are moving into all industries and increasing the speed at which traditional competitors need to respond.
Let’s look at a few statistics that illustrate these changes:
Few of these principles are around
Outcomes are the results you want to achieve, “inputs” are what will lead to those outcomes. To give you a sports analogy, if you are a coach, and want to win a cricket championship, your “inputs” will be “how you recruit your players”, “conduct player training sessions”, and “enhance effectiveness of assistance coaches”.
Similarly, when you want to grow your company & revenue 10x, your “inputs” will be “your strategy”, “how you recruited your people”, “your plans to achieve your strategy, “your plans to achieve sales & marketing numbers”, “your plans to enhance customer satisfaction”, and “plans to launch & test new products”.
When a company wants to grow its business, the CEO and leadership makes educated bets to achieve the desired growth. If CEO & management team can sense what’s coming in future and remain radically open-minded, they will be able to come up with the better bets. In management jargon these bets are called strategies or company objectives.
But where most companies fail is to get execution done against those company objectives. Execution fails or moves slow in most companies because they don’t have a recipe (a.k.a process) in place to
Few examples of these execution plans are:
Every year, most organizations spend much of their time in discussing these strategic bets aka company objectives. This is followed by the sales targets to be achieved and cascading of these targets for each region and sales manager. Few companies go beyond sales targets and put plans to achieving execution on these company objectives. And they die a slow death in excel sheets or legacy system in next 2 to 3 months post the yearly planning session.
The main reason why those plans die:
“Objective & Key Results (OKR) is a framework for CEO’s and companies to build the habit of thinking, planning & execution across teams to accelerate company growth”
Once the leadership defines & finalize the company objectives, it needs to set and communicate the process of implement OKR’s across teams.
OKR Stands for Objective and Key Results.
An Objective defines “What I should achieve”
And Key Result defines “Steps to achieve what or how I am going to measure progress that I am trying to achieve”.
Here are few examples of OKR’s:
|OBJECTIVE: Enhance Sales Effectiveness by Q3 end|
|1. Develop the sales training module by Oct, 15th.|
|2. Complete training of all filed sales executives in north zone by end of Nov,30th|
|3. Conduct assessment of all sales executive by Dec,31st.|
|4. NPS of new training module >=8|
|OBJECTIVE: Acquire 3500 leads (or signups) by end of Q1|
|1. Launch 3 targeted online campaigns to achieve 1000 leads by end of Q1.|
|2. Launch 4 new nurture and email marketing campaigns to achieve 500 leads by end of Q1.|
|3. Deliver 1000 leads through direct mail campaigns by end of Q1.|
|OBJECTIVE: Close Leadership Hiring Positions by Q2|
|1. Interview at least 3 candidates for director of finance & operations position by July ,31st|
|2. Hire 1 director of finance & operations by Q2 end|
|3. Interview at least 3 candidates for director of product management|
Key Learning: OKR is a framework for CEO’s to align people with company objectives. And build the habit of thinking, planning and executing what it takes to achieve company objectives.
We have seen the two primary reasons why companies what to implement OKR’s:
Most of the CEO’s who hear the concept of OKR’s, want to implement it because it’s a better way to align people across teams with company objectives and get execution done on it.
But most of the time, CEO’s are unable to drive the implementation of OKR’s in their company. And the people who end up getting the responsibility for implementing the OKR’s implements it in a way that its perceived and implemented as goal-setting exercise; now done 4 times an year. And after few months, people start felling it as another monkey on their head.
At qilo, we have learned it in a very hard way after failing number of times. And we firmly believe that implementing OKR should be to get execution done & support growth, not to do the goal-setting exercise 4 time in a year.
In the sense, much of this handbook is about implementing OKR in a way to support growth and to create the overall culture of discipline within the company. And it all starts with disciplined people. Remember, OKR is a framework for CEOs and companies to build the habit of thinking, planning and execution across its teams to accelerate company growth.
As Jim Collins author of Good to Great says “Every company would like to be the best, but most companies are unable to create a culture of discipline where people across the teams can figure out with egoless clarity WHAT they can do best. And the will to do whatever it takes to achieve the WHAT”.
Key Learning: Implementing the OKR in right way enable you to bring agile management practices in your company.
Once the OKR framework makes sense to you, then next step is to define the core team of implementing OKR across the company. The ideal core team should have 3 members:
Ideally, a CEO should be the mandatory part of OKR implementation (at least for the first 15 to 18 months). At the core, OKR solves the challenge of alignment and accountability on executing the company objectives. And who else is more interested in getting execution done on company objectives to accelerate company growth then CEO.
A program manager should be someone who understand company business & operations horizontally and have enough authority to get work done across company. A program manager can either be the Strategy Head, or CHRO, or Chief of Staff or COO. The mistake to avoid here is, if you are still a growing company & your HR head is day-in and day-out busy in closing the hiring positions, don’t nominate your HR head has Program managers. Hiring right should be the 1st priority for HR and she should be completely focused on it. Remember, creating the culture of discipline starts with hiring right people.
A process execution owner can be a team member under program manager who execute the plans to implement OKRs successfully. A process owner will be the one who will be interacting with your people. This person should possess leadership qualities, should be assertive, be an excellent executer and articulator.
As a company if you don’t have the strategy head or business performance team, it’s time to hire a person who will work closely with the CEO to take care of “business performance”. And this new person can be the program manager for running OKR’s across the company. But unless you don’t put a program manager accountable for running the OKR show & making it successful and expect it to run on auto-pilot by a software tool, your implementation will never succeed.
Key Learning: Defining your core OKR team is the first step towards successful OKR implementation.
Once you have finalized your core OKR team, it’s time to draft your company level objectives. These company objectives should summarize your “strategic bets” in a way that a lowest level employee can also relate with it.
In our experience, most companies struggle to get these company objectives right first time. When we ask most companies what their Company Objectives are, all they have is their revenue projection and sales target plan.
A typical sales & financial budget plan looks something like below. The problem with just preparing those sales target plans is that it does not providing the enough guidance to the team on how they can achieve these targets.
Your company objectives should not to be a long laundry list like below. The problem with this is because its too long and you are trying to achieve too many things.
And the Company Objective should also not to be a detailed 5 to 10-year plan. Because no plan survives by the time you go to market and try to execute that.
The value of your company objectives is inversely proportional to the number of pages required to express it. Your Company Objectives should be based on your
Many companies call their company objectives as strategic priorities or strategic objectives or areas of focus. Regardless of which term you are comfortable with, the intent is to come up with 3 to 5 Company Objectives that can give the entire company the guiding force, focus and tell the people about kind of outcome you are trying to achieve as company in next 1 to 3 years.
Answering below questions might help you in drafting your 3 to 4 company objectives. Your core OKR team should be coming together and should answer these questions together:
General guidelines to draft your company objectives
Mistakes to avoid
For further understanding on how to define your company objective, there is a great video from MIT you can watch.
Key Learning: Your company objectives defines your company and leadership priorities and the overall outcome that needs to be achieved in a financial year.