One challenge every company faces is how to set goals and measure success. We recently had a debate here at Upstart about how we should go about that process, and I thought our experiences might be helpful to others that are struggling with how to manage their own goal setting process.
We have borrowed the concept of OKRs from Google (if you’re interested in how OKRs work at Google, check out this Google Ventures Startup Lab talkby partner Rick Klau ). However, as Hunter Walk has pointed out, there are some issues with traditional OKRs at startups where things tend to move quickly. Many members of our team voiced two key issues with the OKR process
- Quarterly targets seemed too far out for a fast-paced startup
- Aiming for 70% as success isn’t really holding ourselves accountable for delivering on our commitments.
We discussed moving to monthly OKRs, but that seems to remove the concept of stretch goals and targets entirely because it focuses you only on what you’re already planning to do. In the end, we felt like there were really two separate things we were trying to track, so we actually broke them out.
We are sticking with quarterly OKRs. The Objectives are our top 3-5 general focus areas as a company and tend to be fairly consistent quarter to quarter. Each Objective has 3-5 Key Results associated with it. These are measurable business outcomes that would indicate success for the Objective. A few key points about the Key Results:
- They must be measurable and should be only growth focused. Our targets are all about the increases/improvements for the quarter – not a total metric for YTD.
- They must be results-oriented and not simply a list of activities. Launching a feature or a new marketing campaign is not a Key Result – that’s a project (see below). We need to define what we are planning to achieve through that (eg increased conversion rate on the website).
- They are always stretch goals. We generally try to have target of 70% overall success. It’s harder to aim for that in a startup with less history to look at – but it is good to do.
For each Key Result, we list out projects we are working on for the month. Each project should have a clear outcome to define completion so there is no ambiguity about completion and a definite owner responsible for it. Our goal is to have 100% completion of the projects we list out.
Breaking our goals out this way has been really helpful in developing a useful cadence for the team. Each quarter we can set out goals that we should be hitting in terms of improving our business through the OKRs. This keeps us focused on driving real business results and not just increasing the level of activity. Monthly projects allow us to hold ourselves accountable for our internal commitments and have a tight timeline for product development or marketing and business development activities.
We review the monthly projects at our team meeting each week and make sure we’re on track. At the beginning of each month, we can check in on our status towards the OKRs and prioritize the list of potential projects based on what we think will have the most impact on our key business metrics. This keeps us focused on the projects that really matter and honest about the impact they are having on the business. If we are completing all of our projects but not hitting our OKRs, we know we have a strategic problem we need to address.
This plan is still new to us, but so far it’s been working well. Our team meetings are now more productive and focused on our key projects and activities and keeping everyone on the same page. And having OKRs that are results-oriented stretch goals helps us focus in on the projects that are most important for driving the business overall forward. I hope this post helps others out there thinking about this issue – and if you have any feedback or suggestions we’d love to hear them!