In 2013, Google published a talk by Rick Klau on their use of Objectives and Key Results (OKRs). This talk enlightened business leaders with the goal setting methodology that has benefited Google as an organization. In the past couple of years, the number of companies politing and implementing OKRs has grown steadily. Of these companies, the majority have succeeded in their process to adopt the OKRs methodology fully, while others have encountered obstacles that resulted in resistence.
For today’s CEO, the debate is on whether OKRs is a methodology well suited for any type of organization and whether the benefits are worth the investment of time and resources. In this upcoming blog series covering the use of OKRs, I will be discussing the roles various stakeholders of an organization will take to ensure success when implementing OKRs. In today’s discussion, we will be looking at OKRs through the eyes of a CEO for small to medium sized organizations.
As CEO of my organization, why would I want to implement OKRs?
To start, who doesn’t want to be like Google? Or more specifically: which CEO is not set out to build a successful and well-run organization?
The OKRs methodology is appealing to many CEOs because it is one of the few that encapsulates the organization both top-down and bottom-up. Unlike traditional goal setting methodologies such as MBO and SMART goals, the company vision and long-term strategies are being converted into quarterly objectives with clear key results. The key results are then assigned to your management team and eventually to each team member.
Since OKRs encourage objectives to be publicly shared within your organization, it’s an easy way to communicate with everyone on:
- What the company’s main areas of focus are this quarter
- What the company’s metrics of success are
- How various teams are held accountable within their areas of responsibilities
Whether you are the CEO of startup or a Fortune 500 company, OKRs ensure that everyone understands what the company should be focusing on and executing in the same direction. On a high level, the reason to implement OKRs is to ensure that your limited resources—whether it is time, manpower or budget are being put to good use.
What can I do, as CEO, to ensure the success of my team using OKRs?
Having worked with many companies of different sizes and industries, there are similar factors affecting organizations that have made them successful using OKRs:
1. Invest in time and resources
For SMBs, you as the CEO, needs to be 100% on board with the process. OKRs starts with YOU, along with your leadership team if you have one.
The companies that have found the most success with OKRs are the ones where the CEOs live and breathe OKRs (i.e. it’s part of their business processes, they hold meetings around OKRs and take actions whenever needed).
OKRs take time to implement; after interviewing dozens CEOs, we are able to gage CEOs to feel most comfortable with rolling out OKRs fully after 3 to 4 quarter—meaning this could easily be up to 6-9 months invested in making adjustments so that your team reaps the full benefits of OKRs.
The reason for this long roll out process is simply because OKRs is not a methodology where one-size-fits-all can be applied. Each organization has their own internal infrastructure, success metrics and cadence they need to apply. And as the CEO, the first quarter is generally the most challenging because you have yet to know how receptive your team will be. In the 3rd and 4th quarters, you’ll have the ability to reiterate the process multiple times, gather feedback from team members and adjust the process to make it seamless and more efficient.
To ensure success in your small to mid-size organizations, you’ll need to carve out time 2-3 weeks before the end a quarter to start drafting company OKRs. Do this and share them with your management team, make the necessary tweaks and communicate them to the rest of the organization before the end of quarter, so that everyone will have their personal OKRs ready to go by the first week of the new quarter.
2. OKRs should be a must-have, not a nice-to-have
This factor relates to our first point (i.e. as a CEO, you need to implement OKRs as part of your current processes and not something on top of your existing practices).
Team members look up to you as the leader. If you champion OKRs, chances are your team members will be more receptive. One thing that I tell leaders with whom I work with, is that creating OKRs can be broken down as follows: 25% about the work, 70% about the process and the last 5% is about the vehicle used to communicate OKRs and regular check-ins.
Again, as CEO, you need to lead by example. In this circumstance, if you’re implementing OKRs updates in your daily/weekly standups, holding monthly meetings on OKRs statuses and action plans and providing detailed closing notes on each OKRs, your managers will follow through.
Often, CEOs use OKRs as a supplement to the current strategic execution and there is nothing wrong with it. However, as mentioned before, it does take time and resources to get OKRs right. If OKRs does not become part of your fundamentals, it’ll be a challenge to increase adoption the methodology in your team.
To ensure you’re successful, start creating a framework around the process (i.e. how often you want team members to provide you with an update of their progress, when do you want to discuss the status with teams and the company and how do you want to close the objectives at the end of the quarter).
3. Provide training before delegating
Many of you might recognize yourself in the following scenario: you heard about OKRs and the benefits companies have experienced using it. You read about it and decide that you want to roll it out to the rest of the organization. You delegate the implementation to your project manager or your HR leader.
So what’s missing from this picture?
The big red flag is the lack of training. I have met many HR leaders and managers who have come to me and say, “My CEO wants to implement OKRs and I have no clue on where to start”.
This is where I asked, “Why do you want to implement OKRs?”.
The answer is unfortunately unknown or, “Because my CEO wants to”.
HR leaders and other stakeholders often become the gatekeeper of OKRs in a company. The main reason being, these individuals have access to resources when it comes to training and OKRs require educating each team member on how to properly set objectives and key results. However, the process still needs to start with the CEO.
Your gatekeepers are not the ones who are responsible to outline the company objectives and key results. They can, however, help with communicating information to the rest of the organization.
To reiterate, delegating is not an issue. However, you need to ensure that your champions have received the proper training and clearly understood what you’re trying to help the company achieve by implementing OKRs, and agreed on the process.
Avoid the situation where your champions tell you, “We did not go through with OKRs because we had to chase our CEO down to get the company OKRs ready for the rest of the team”.
PRO TIP: Start early! If you plan on implementing OKRs out in 2017, you should start experimenting in August/September with your group of champions. Practice makes perfect and this definitely applies to OKRs.
The Ultimate CEO Checklist for a successful team using OKRs
- Start by creating company OKRs. You can check out this webinar on How to Create Organizational OKRs to get a better idea on the OKRs framework and how to get started. Remember to identify the main of success metrics according to your company core values.
- Identify champions of the OKRs methodology within your team. Even if you are going to be the one spearheading the implementation, you should find stakeholders who can help you reiterate the process, brainstorm alternative ways to adopt OKRs and become a mentor to team members who need extra guidance when setting their own OKRs.
- Implement OKRs by within teams on a smaller scale to start. Companies who have been successful with OKRs have been the ones who have carefully rolled it out—first internally with OKRs champions, next with the management team, and eventually the whole organization. By executing a partial roll-out, you have the buy-in of every member before moving on to the next group and the opportunity to iron out any issues along the way.
- Dedicate time to mentoring and feedback. Very often, team members understand the concept of OKRs, what makes a good OKRs, and the process behind it. The major issue is “How do I create my own OKRs?”. For many roles, the team members don’t have specific metrics that they were working towards. These individuals need help with identifying these metrics to turn into key results. The same applies for more functional roles. For example, as a receptionist, what type of OKRs should I set for myself?
- After each quarter, reiterate the process and customized to fit your organization. Do not hesitate to add in your own twist to the process. One thing to keep in mind is that OKRs works for Google because Google has found a way to ensure that the methodology is customized to their needs. You don’t have to follow the same guidelines to the tee. Involve the organization in providing feedback on what works and what needs improvement on. As you solve the issues, you will end up with a process that is aligned with why you decided to do OKRs in the first place.