Goals are normally driven on a company strategy that is informed by company vision. This could be as vague or sharp as it makes sense for your organization. Ideally vision looks out 10 years, strategy is a 1-3 year thing, and goals are a quarterly thing which can be measured on a daily basis, ideally. Getting a goals framework in place at the start can be really hard though.
All frameworks to help align teams are there to help. The most recent I’ve tried is OKRs. When we decided to use OKRs, I found a template hard to find.
OKRs are just another variation of a goal framework and since using them I’ve started getting questions from a number of operators about OKR formatting so I wanted to share this with you all. Much like the one page term sheet, it’s just a tool you can select to make use of if it’s helpful for you.
I like the format I’m sharing with you because it makes clear what the all company goal is to everyone, that leadership has supporting goals, and that each team goal is feeding into the Key Results. Here is how to start thinking about the OKR format.
- (O)bjective – The thing you want to do.
- (K)ey (R)esult – How you’re going to measure your progress against the thing.
Here is the general hierarchy of OKRs that I’ve found helpful:
- All Company Objective & Key Result
- Leadership (individual) Objective & Key Result
- Team 1 (i.e. Marketing) Objective & Key Result
- Individual
- Team 2 (i.e. Sales) Objective & Key Result
- Individual
- Team 3 (i.e. Product) Objective & Key Result
- Individual
- Team 4 (I bet you see the trend…) Objective & Key Result
- Individual
- Team 1 (i.e. Marketing) Objective & Key Result
- Leadership (individual) Objective & Key Result
Then team 5,6,7 and so on as appropriate.
I nested Leadership under All Company OKRs because if leadership isn’t aligned on supporting the company OKRs it will be a bumpy road.
The actual OKR format can be a little weird to wrap your head around so let’s just start with an example.
An OKR Example
(O)bjective
Grow inbound funnel to enable sales.
(K)ey (R)esult
- 0.3 – Earn 50 MALs
- 0.7 – Earn 100 MALs
- 1.0 – Earn 150 MALS
Measuring Key Results
OKRs creates the opportunity for transparent levels of success. I love the .3/.7/1.0 framework. For those new to OKRs this is how to think about those.
- 0.3 – This is baseline performance. On a sliding scale of 0% to 100%, this is 50% performance. It’s basically what happens by you showing up and breathing. This is like running a 9 minute mile. If your job is running quickly and you are regularly running a 9 minute mile, it’s possible there is a problem.
- 0.7 – This is target performance. You can’t achieve this goal by showing up and you have to consider other improvements to get there. On a sliding scale this is 100% performance, also known as a A+. This is like running a 5 minute mile. You can do it by working hard but not everyone is built for it.
- 1.0 – This is over performance. It’s above and beyond in a way that made accomplishing the goal unclear when you started working on it. This is 150% performance or greater. It is over performance. This is like running a sub 4 minute mile. Whatever got you to this point, took a lot more than working harder. 1.0 goals normally can’t be solved by throwing more hours at a thing. They require re-thinking the thing.
You could also apply colors to this if you wanted…
- Under 0.3 – This is red. There is a performance problem / or the goal isn’t possible. This is the hardest position to be in for everyone.
- 0.3 – This is yellow. There is work to do but it’s recoverable. it’s either turning red or turning green. It should be clear what direction it’s going.
- 0.7 – This is green. Things are great and if nothing ever changed the future is probably pretty bright.
- 1.0 – This is flashing green. Things are incredible / or the goal is too soft.
The devil can be in the details here which is why managers notes and performance conversations are so important. If someone was on the cusp of their 0.7 it’s the managers responsibility to call that out.
Where these numbers fall is always a dance as is communicating how to support+evolve the performance that is attached to them. When there is repeated 1.0 performance, your goals are probably too soft or someone (or a team) is really good. Either way, you want to know that. OKRs remove the question of “how are we performing?”
Where there is repeated .3 performance (or below) the goals and the team are not likely in alignment. That is the managers responsibility to figure out and it’s not an easy job. Either way, you want to know that.
OKRs are a framework for knowing and enabling the teams and people who make up those teams to perform well and realize benefits from that performance.
There are tools you can buy for this but in my experience none of them do a great job, yet. I suggest doing it the old fashioned way with a spreadsheet and aligning team(s) with actual words. I find that it’s a good way to also provide a framework for performance without automating it. You can’t automate people which is what so much of this software is trying to do. This is a framework for people measuring people, not computers measuring people.
Some additional thoughts…
I’d suggest limiting Company and team objectives to two. One feels like too few and three feels too broad in practice. If there is a need to have 5, it might be time to split the team up or be more thoughtful about what goals are actually individual and not team goals.
Regardless, you should make the framework fit the company and you can see I’ve taken some liberties if you know OKRs well. Getting started with OKRs was most difficult for me because I had to interpret a lot of writing to get the framework built.
One thing is for sure, understanding your teams performance and goals stack (whatever it may be) will help you build a better business. Don’t be afraid to set goals.