Sunday, December 15, 2013

OKRs – objectives and key results

Last night I returned from a 2-day offsite with the Point Nine team (in Schlepzig, of all places). Our (small) full-time team more than doubled in the last six months, and this was the first time for all of us to spend some time together away from the daily bustle. We had a long list of topics that we wanted to discuss, ranging from investment theses to portfolio companies and to a number of projects that we're working on.

I wanted to kick off things with a session about our OKRs (objective and key results), and we had scheduled two hours for this agenda item. If you haven't heard about OKRs before, it's a methodology invented by Intel and popularized by John Doerr, the famous VC who invested in Netscape, Amazon and Google. The idea is (simply put) that a company needs to have clear objectives and that every department, team and person in a company needs to have objectives – and a set of key results for hitting those objectives – which are aligned with the company-wide OKRs.

We ended up spending the entire first day and some more time of the second day on this topic. This is particularly funny because I wasn't even sure if it's worth talking about our OKRs since I was wondering if they aren't obvious anyway.

Now, to be precise we didn't spend ten hours talking about our high-level long-term objectives. At a high level our goals are pretty obvious and I've written about them here. But diving in deeper and deeper brought us from one question to the next question, and by the time we were finished with the OKR session we've covered most of the topics which we had planned to discuss in other sessions. So on the one hand we completely screwed up the schedule that we had put together, on the other hand we covered most of the stuff that we wanted to get done in the end.

After this experience I am now even more convinced than before that every startup should use OKRs or a similar methodology to ensure that everyone in the company is on the same page and that there are clear and measurable goals. Scott Allison, founder & CEO of Teamly, wrote a great summary of the benefits:

  • It disciplines thinking (the major goals will surface)
  • Communicates accurately (lets everyone know what is important)
  • Establishes indicators for measuring progress (shows how far along we are)
  • Focuses effort (keeps organization in step with each other)

But isn't this a no-brainer, don't all companies have a plan for the company as well as targets for most employees? Yes and no. All bigger company presumably have a budget and plan in place which is aligned with the company's objectives, but my guess is that what's often missing is linking that high-level plan to every employee's targets and communicating it throughout the entire organization. I'm pretty sure that if you randomly picked 100 employees of any Fortune 5000 company and asked them about the objectives of their companies you'd get lots of different answers. And in a fast-growing startup which doubles headcount every year and where each individual employee can have a much bigger impact than in a large enterprise, it's even more important that everyone is on the same page.

If you want to learn how Google (where John Doerr helped introduce OKRs) sets goals, watch this video from Google Venture's startup lab.




7 comments:

Emac said...

Thanks for sharing! my intuition tells me that organizations already do this in a way or another but definitely worth considering.

chrija said...

Emac, thank you for your comment! I agree, most organizations do this one way or another, but my guess is that in a large part of them what's missing is the link between the high-level plan and every employee's target, plus even more importantly the communication around that. I've inserted a para to add some more color.

Roberto Bonanzinga said...

You must have good co investors with whom to discuss similar topics :)

chrija said...

We do, especially in Contentful!

Amin Palizban said...

Awesome. Glad you guys are adopting OKRs in an investment firm. We have few valley-based VCs using our OKR tracking tool. If you like more resources on OKRs and how companies utilize them, checkout our blog: http://blog.7geese.com/category/company-goals-and-objectives/

Kris Duggan said...

Thanks for sharing your experience with OKRs. I see more and more organizations doing what you did—using valuable offsite time to focus on goals. But what happened after your offsite? That seems to be a critical juncture for many companies today—keeping alignment as executives and employees move forward in their day-to-day roles. Google built a proprietary platform to track its OKRs. Other companies are looking at goal-setting platforms like BetterWorks to drive operational excellence. As John Doerr says, execution is everything. Check out http://www.betterworks.com for more info.

James Strickland said...

This is an observation that we've noticed with our customers too - what's clearly lacking in most goal setting processes is the link between the employee's objective and what the company wants to achieve. We've found that it's really important for employees to understand EXACTLY how they are contributing to the strategic direction of the company; and for Execs/Managers to understand which directions their staff are working in. At PeopleGoal we've built on this observation by developing a 'company objectives' (read Balanced Scorecard) approach where individuals link their personal objectives (OKRs or SMART goals) to the strategic objectives of the organization (see attached image). More information is available on https://www.peoplegoal.com