Many of my readers are asking me where they can find a book describing how to successfully launch OKRs.
I couldn't find one, so I'm writing one myself. Here's a preview of the first chapter of my upcoming book on Objectives and Key Results.
To request a copy of the eBook set to release later in 2014, click here.
The Problem
CoolSoftware wasn’t hitting their revenue targets. The sales team felt dejected. So why was the marketing team out celebrating at an expensive marketing automation conference?
It all started when the CEO appointed a new marketing VP to help implement CoolSoftware's growth plans. The marketing VP introduced a lead-nurture score to measure lead quality. While the CEO thought scoring leads was just what CoolSoftware needed, sales reps did not see a correlation to a prospect’s level of interest and ignored the metric. Although sales reps complained from time to time, the marketing team kept reporting lead score.
Each sales rep dealt with the lack of quality leads differently. Some used their network to try selling to old contacts. Others compiled email lists for marketing to load into the CRM system.
The marketing team didn't like getting lists from sales reps to load into the CRM. Lead quality was dubious and many of these leads were already in the system. The marketing VP got a round of applause when he said, “Why don’t those sales reps go out and start selling instead of trying to do our job for us!”
To their credit, the marketing team worked hard. They had a coherent set of goals with measurable results such as increasing traffic to the website, improving landing page conversions to download the company brochures, and increasing the number of subscribers to their blog. However, the marketing team was working on the wrong goals!
Senior marketing and sales leaders didn’t get on the same page to define and align their objectives with measurable key results. Effort was wasted. If one team celebrates while another is dejected, your company may not be well aligned.
Leading companies such as Intel, Google, and LinkedIn have solved this problem — by using Objectives and Key Results (OKRs).
Definition: Objectives and Key Results (OKRs)
OKRs is a critical thinking framework and ongoing discipline that seeks to ensure employees work together, focusing their efforts to make measurable contributions that drive the company forward.
OKRs consist of 1) Objectives and 2) Key Results.
It’s easy to come up with objectives. It’s hard to define key results. In a typical meeting, the outcome might be, “We all agree that we need to increase demand in our solution.” This statement can easily be written as an objective, “Increase demand in our solution,” but how will we know if we’ve achieved this objective? This book focuses on best practice approaches and questions we need to ask in order to clearly define the objective's underlying key results as well as ongoing tools that can be used to ensure we maintain the discipline of OKRs.
Definition: Alignment
Alignment is the extent to which the strategy and operations levels of an organization are in sync.
If we’re making progress moving up ladders that are not declared “strategic” by executives, our company is not really aligned; we have a busy-but-not-productive problem. CoolSoftware had this problem. We're making progress increasing the lead score metric, but the VP Sales does not consider this strategic.
Is Your Work Aligned?
"A mere 7% of employees today fully understand their company's business strategies and what's expected of them in order to help achieve company goals."
- Robert S. Kaplan and David P. Norton
Workers that feel disconnected from strategy should reflect on and question how the work they do each day contributes to the company mission.
As a mid-level manager of a Business Intelligence (BI) team at planetrx.com, a mid-sized company, I once had that something-seems-off feeling and it seemed my work was disconnected from strategy. Our BI team sent out semi-automated, daily flash reports to all executives and managers. After a few weeks of getting these emails, I noticed that most recipients deleted the daily email and treated it more or less as SPAM, yet the BI team continued to put in hours each week maintaining these reports. Finally, I decided to stop sending these reports to test how my internal audience would respond. No one complained that the reports were phased out! We were busy working on stuff that didn’t matter! I'm not alone. Research indicates that as many as 60% of highly engaged employees feel their work is not aligned with the company's strategic goals.
Are you updating and sending out reports that don’t lead to action? OKRs gives leadership a framework for ensuring that managers adjust their work so the organization stays in alignment. So, if OKRs is such a great framework, why has almost no one heard about OKRs?
Why OKRs took off in 2013?
OKRs is not a new management buzzword. Intel and Andy Grove are credited with introducing OKRs to the business world in the 1980s. Key executives coming out of Intel spread the word on OKRs. Gary Kennedy left Intel and introduced OKRs to Oracle in the 1980s, John Doerr left Intel and went on to introduce OKRs at Google in the 1990s. Recently, dozens of successful companies including LinkedIn and Twitter started using OKRs as a performance management platform. So, if OKRs have been around over 30 years, why are there no books dedicated to OKRs? Why the sudden explosion of interest in OKRs? The short answer: Google.
Google started using OKRs in the 1990s, back when they had just 40 employees. In May of 2013, Google Ventures partner Rick Klau gave a one-hour, 20-minute presentation on how OKRs work. It’s an amazing presentation that I forward to anyone interested in learning about OKRs.
Klau's tweet indicates he is surprised by the exploding interest in OKRs and his workshop video:
@klau tweet: "My OKRs video just passed 150,000 views. That's about 149k more than I thought it'd get"
However, as more and more Xooglers take leadership positions and the next generation of CEOs view Klau's workshop, it's no surprise that OKRs are gaining traction. The OKRs methodology is taking off outside the US and with companies of all sizes. One study suggests 40% of tech start-ups in London recently switched to OKRs!
Individual Contributors: Don’t read this book unless you’ve experienced one of the following at work:
Our company’s performance management system does not help me do my job better
I can’t see how my contributions drive the company forward
I wish I had more visibility into what “those people in department X” really do
Managers: Don’t read this book unless:
Most of my team cannot state the company’s business strategy and what’s expected of them in order to help achieve company goals
I need a better way to know my direct reports are focused on key results that best drive the company forward
Our company could use more alignment across teams
OKRs: The Measurable Pathway to Greater Success, defines the types of OKRs, provides sample OKRs across various departments, analyzes over a dozen software vendors that provide solutions for defining and tracking OKRs, and most importantly, details the pitfalls to avoid as well as best practices to follow in order to rollout OKRs successfully.
