The Value of an OKR Framework. Starting a business is one thing. Growing it is another. A key success factor to scaling a business is the ability of its leaders to be absolutely laser focused on where to invest their strategic efforts, and then execute those efforts well.
The primary reason for weak execution is what experts call ‘the whirlwind’, otherwise known as your day job. Strategic priorities and goals are continuously competing with the whirlwind for time and attention. The whirlwind, however, always wins the fight! Why? Because the whirlwind is URGENT – it acts on you. New strategic priorities are important – leaders act on them. When urgent and important collide, urgent always wins. What is often forgotten, however, is that both are critical to growing a business.
The challenge of never having enough time is not going to change, ever. To scale their businesses, leaders need to be able to work ‘in’ their businesses, as well as ‘on’ their businesses. They need to constantly improve, develop, optimise, and refine them. This is where growth comes from. Leaders who find it difficult to say no, end up with too many things being worked on at once. This leads to a whole lot of half-baked and half-completed initiatives which don’t add any real value to the business.
Looking into this idea, Berkeley professor, Morten T. Hansen embarked on a five-year study to uncover the work-smart practices that drive individual performance. Hansen considered the number one driver of performance to be ‘do less, then obsess’. He found overwhelming evidence that leaders who choose to focus on fewer priorities and then channelled tremendous effort into them, greatly outperformed those who pursued a wider range of priorities.
The majority of leaders GROW works with are faced with the challenge of not having enough time. So, as coaches, we must help our clients manage the fine line between actively taking part in the day-to-day running of the business and the execution of their growth strategy. This means leaders must learn to say no to a lot of things.
Steve Jobs was known for his ability to say no when it counted. Apple’s success as not only a function of what he chose to do, but equally on what he chose not to do!
In order for business owners and leaders to manage this ongoing challenge, a framework that guides, even forces, them to think carefully about where to invest their time and resources, is needed. In addition, a paradigm shift is required. Leaders must move towards understanding that it is the intended outcome of their activities that has value for a business, and not the performance of the activities themselves. As such, strategic goals or priorities should be set as that – the intended outcome and not the task itself – they are very different propositions.
In the 1950s, Peter Drucker, who is recognised as the founder of modern management, developed his Management by Objective (MBO) framework. Drucker’s MBO was then developed further by Andy Grove, founder of Intel, when he was looking for a framework on which to build his new company. It was off the back of Grove’s work, that the strategic goal setting framework called Objectives and Key Results (OKRs) was developed.
Whilst OKRs have been in use for years, it was Google’s adoption of OKRs in the early 2000s that gave rise to the explosion of leading companies across the world adopting the tool. Whilst simple in principle, OKRs require discipline and intentionality. Once in place, however, strategic efforts become laser focused, enabling alignment across the entire organisation and ultimately yielding tremendous results.
OKRs should be set for a particular cycle and should ideally be rigorously debated in the company’s strategy sessions. OKRs are made up of two key elements: Objectives and Key Results.
Typical objectives include ‘increase revenue’, ‘develop our company culture’ and ‘create an awesome customer experience’. These are the broad goals or areas where leaders agree to commit their resources and strategic effort. The KRs then define the measurement criteria.
So, by example, if the Objective is to ‘create an awesome customer experience’, the KRs may look like this:
Note that each KR is explicit. Not only does it measure the outcome the business wants to achieve, it also has a finite time frame. What it doesn’t do, however, is list what activities must be done to achieve that outcome. This is an important point. Business leaders must remember that the OKRs value to a business sits in the outcome that a set of tasks are intended to achieve. Success is achieving a result, not ticking off an activity as ‘done’.
By limiting the number of OKRs set, leaders are forced to be very clear and deliberate about what to focus on, and what not to focus on, and apply a critical thinking framework which ensures employees all work together, focusing their efforts to make measurable contributions to the goals at hand.
To drive accountability and ensure results, regular meetings must be held to allow teams to track progress of the OKRs. Without having accountability in place, your execution results are guaranteed to be disappointing. Remember, everyone is fighting the whirlwind and trying to do their day job, while trying to execute on the most important strategic goals, the OKRs.
The implementation of OKRs across GROW’s client base has resulted in leaders and their teams being more focused on fewer goals and achieving better results. We have helped our clients understand that less is more when it comes to growing their businesses.
So remember, if you want to execute brilliantly, do less, then obsess!