Setting Goals and Tracking Performance
OKR Overview and Process
Objectives
Objectives are the goals. They tell the company where to go.
Key Results
They align with objectives and tell the company how you’ll get there.
Example: We sell barbecues online.
Objective: We want to grow revenue to 1 million this quarter.
Key Results:
- Rank top three in results for “buy barbeque”
- Run discount campaigns in two national newspapers
- Increase site traffic by 20%
Broswe the full playbook:
Conscious Culture
Key Results and KPIs
Key results should be stretch goals. Success for OKRs is hitting around 70% of key results. If we’re hitting well above that, generally speaking, we’re not being aggressive enough. If we’re hitting well below that, we should discuss if we’re being too aggressive or not performing to the level we hope. Additionally, hitting OKRs is not the only measure of success for a team. Thus OKRs should never be treated as gospel and what’s best for the company should always be put over hitting an OKR. OKRs can be wrong and you shouldn’t hit them simply because you wrote them down if it’s not what’s right for the business.
Key results should often be linked to Key Performance Indicators (KPIs) as it is critical to objectively measure the performance of the company and your team. “You can only manage what you can measure.” KPIs allow you to do this. KPIs are the 1-2 metrics for each major function of the company that allow the entire team to know in an instant how the company is doing, and where the issues are.
It is important to determine the 5-6 overall company KPIs, then track them religiously and make them available for the entire company to easily see on a daily basis. Do so by putting the metrics up on a TV screen in a visible place in the office, using a software tool like Geckoboard, or something similar. As Andy Grove has pointed out, it is also important to define and track counter-metrics, because metrics will be optimized sometimes to a fault.
More Examples
Take a look at http://okrexamples.co/. These are great.
Why Objectives and Key Results (OKRs)?
As companies grow, communication and productivity usually break down. The system of group organization that existed when the company was all sitting in the same room together (no system at all) suddenly no longer works when team members are not all sitting next to each other. Once a company is over 20, you will hire great people, but they won’t know what to do, and you will be frustrated by their lack of output. Luckily, there is an answer. It has a time-cost. But once implemented, it will allow your company to become productive again, and will continue to be effective as your company scales from 10s of team members to 100s to 1,000s to 10,000s.
This system is one that every successful large technology company uses. Without it, your company will never function well beyond 20 people. Each company has a different name for their system. Google calls theirs Objectives and Key Results (OKRs, other companies call them Key Performance Indicators (KPIs). But the systems are essentially the same from company to company.
The organization system does the following:
- Sets vision and goals for the company, each department, and each individual.
- Communicates that vision and those goals to every team member.
- Tracks and reports how successfully each person, department and the company overall is in achieving those goals.
- Elicits feedback from all team members on what is going right, and (much more importantly) what is not going right and needs to be changed.
The system creates information flow out (from CEO to all team members) and information flow in (feedback from the front lines to the CEO). Without it, team members don’t know what the highest priority tasks are for them to do, and the CEO gets no feedback on what is working and what isn’t.
In the system, each manager has a team that reports to him/her. Before electronic tools, the optimal team size was 4-6 (not including the manager). This was because a weekly 1on1 in-person meeting was required with each team member. With the advent of electronic tools which facilitate information flow, meetings can be much more time-efficient, and team sizes can therefore be much larger.
OKRs In Practice
The core of the system is a series of regular meetings:
- Quarterly Goals Meeting
- Regular Team Meetings (Weekly or biweekly depending on your team)
- 1on1 Meetings
- Weekly or biweekly depending on your team
- Company-wide Meeting
- Office Hours
These meetings usually last one full day per week for each manager. Upwards of two maximum. The Team Meeting lasts 1-3 hours. And the 1-1 Meetings and Office Hours take up the remainder of the day, and determine how many team members a single manager can effectively have. The overhead feels tremendous to a team lead / manager who has previously never had to have a meeting because everyone worked in the same room where information flow happened organically. Unfortunately, without this one day per week investment, the larger team will never fully know what to do, nor will the manager get the needed feedback on her and the company’s performance.
This is where the Vision is created for the team (where the Team wants to be in 10 years).
Read more about how to hold a productive meeting in our Meeting Guide.
OKR Process:
Key Dates and Deliverables
The below is a sample OKR process timeline.
OKR FAQ
The below outlines how we use & create OKRs at Bolt.
Q: How do we decide what to focus OKRs on?
A: In setting our OKRs, we start by first deciding on our company level Objectives. Once you’ve set your Objectives, set targets for measurable Key Results that can serve as leading indicators of your progress against the Objectives.
In setting the Objectives, reference your long-term strategy, your annual plan, and your past results and use these to align on the most impactful cross-functional outcomes or improvements you can achieve over the next three months to ensure that you continue making progress against our strategy.
To provide an analogy, if a new college student’s goal is to become a doctor, during her freshman year she might set an objective to “Pass all of the pre-req courses for a Biology degree”. During her sophomore and junior years, perhaps she adds an objective to “Prepare for the MCAT” and if she has a low GPA, she might also add an objective to “Get all A’s this year” to improve her GPA. Finally, during her senior year, she might start to have objectives like “Earn six elective credit hours to meet graduation requirements” or “Prepare my med school application”. In each stage of the journey, she uses her objectives to focus on the most important things she could do at that stage to keep making progress towards becoming a doctor.
Similarly, as your company continues to make progress against your long-term vision, use OKRs to regularly revisit what is currently most important to ensure you maintain that progress. You may also use OKRs to identify and address opportunities for improvement.
Q: Should you have a long-term plan that you use to determine what to do each quarter?
A: Yes. Quarterly OKRs are meant to represent the most important short-term building blocks towards our long-term strategy.
Q: Who develops the company-wide OKRs?
A: The executive team develops the Company-level OKRs. In setting the OKRs, they incorporate input from department leads and others in the company.
Q: What tools are used to determine what realistic goals are? How do we come up with the numbers?
A: As an example sales model, market demand + product maturity conditions, and financial plans can be used to map out realistic goals. With people-related goals, like DEI goals, take industry standards and adjust to what is realistic for your company. They should be specific enough to be measurable and have clear scoring criteria but not so specific that they pigeonhole you into one approach to achieving the end goal.
Q: What are the steps of planning? Who is involved in each stage of planning?
A: For company-level OKRs, the executive team meets several times to develop a focus and formulate OKRs. Additionally, the executive team requests feedback from department leads on what they should consider when developing OKRs.
Generally OKR planning starts 4-6 weeks ahead of the beginning of the new quarter. If you have feedback on priorities for OKRs or work for the upcoming quarter, make sure you share with your manager or leader.
Step-by-step:
- Develop strategy for quarter planning – Strategy Team owns this piece
- Receive feedback from department leads on what focus should be
- Small exec team develop an agenda outline for OKR planning meeting
- Full exec team develops and finalizes OKRs
5: Department leads develop and finalize department-level OKRs
6: Company-level OKRs are announced to the broader team
Q: Are there other company-wide goals apart from OKRs?
A: OKRs are the mission-critical things to achieve during the quarter. They are meant to drive resourcing decisions so that if you are weighing prioritizing OKR related work vs. another project, OKR work should generally take precedence. They are not everything the company is working on or an exhaustive list of projects.
Quarterly Goals Meetings
Once each quarter, the Leadership Team and each Department should take 1-2 days to refresh the 10 year vision for the company (or department) and set the goals for the quarter.
- The Leadership Team should have their Quarterly Meeting first to determine the Company’s Quarterly Goals.
- Once these are established, each Department should then have their Quarterly Meeting to determine what quarterly goals they need to hit in order to successfully meet their portion of the overall Company Goals.
- Schedule a half-day offsite for a minimum of five hours, and upwards two full days Orchestrate a discussion with your team around where you want to be in one year from now, challenge all assumptions.
- As a manager, make sure you’ve spoken to higher-ups in the company first to collect the data you need for this meeting:
- What goals the company would like to see out of you
- What other teams need from your team
- Core metrics essential for your planning exercise
- Prepare a strawman proposal and walk through it section by section, building up from first-assumptions and then to final conclusions
- Upon completion of this meeting, place all roadmap goals in excruciating detail in Asana for your team under a “Roadmap” section for everyone to constantly see.
- In Asana, you can assign multiple projects so that it appears in multiple locations.
Addition qualifications of a good quarterly goal
Before you finalize any goal, ask yourself and your team:
- Is it aggressive, but not overly aggressive?
- Is it achievable?
- Is it objectively measurable?
- Does it represent what truly matters to help achieve our long-term goals?
- Is it motivating for your team?
- Is it in your control?
If you set goals too aggressively, people will burn out. However, you need to find the right balance. Keep in mind that A players recognize other A players; They’ll leave if they aren’t pushed properly.
Once OKRs are set, do the following:
- Go to your team’s weekly project in Asana, make a section at the top called “QX Goals”, and drag your goals into them
- Ensure you reiterate these goals every meeting
- Do not assign a name to quarterly goals. They are for the full team to achieve. However, you as manager in exec reporting are ultimately responsible, of course.
- Add a secondary project so that they are visible in Company Goals
- Publicize them on a screen, in writing, or somewhere visible and memorable
Note: Do not require people to use Asana for all of their tasks, only the Company tasks/goals that you are tracking. Many will use Asana as their sole task-tracking system. But for others, it makes more sense to use their individual system (Evernote, Omnifocus, JIRA, etc.) for the majority of their tasks, and only track their Company-required goals in Asana. This vastly reduces their Asana volume and ensures that they don’t become Asana-overwhelmed. This can and will happen. Oftentimes you should encourage people to not use Asana for their personal goals.
Quarterly goal kick-off
The first Friday of each new quarter teams should do a small offsite to review and align on goals. This should serve as a mini annual kick off.
10-year vision
Create a 10-year vision for the company. Imagine that it is 10 years from now. You are the dominant company in the industry.
- Who is your customer, and what pain point are you solving for them?
- Why do they choose your solution over the competition?
- What asset (human or physical) do you control that makes it difficult for any competitor to replace you (e.g.- what is your moat)?
3 Month Goals
Create the top three-month goals for the company and for each individual department. These goals should be objectively measurable by a third party.
Examples:
- Sales at $500,000 MRR.
- Hired 12 developers.
- Raised $10mm.
Good Quarterly Goals are KPI/Metric Driven.
