The Fundamentals behind Objectives and Key Results (OKRs)
Objectives and Key Results (OKRs) are a strategic planning tool used by organizations to align their employees, teams, and entire organization towards a common goal. In a startup, choosing the right goals is such an important move and will have an everlasting impact on its growth.
Objectives are measurable results that help define what a team or company intends to accomplish in the near future. They are typically set at the beginning of an organizational period, such as one fiscal year.
Key Results (KRs) are the tasks that need to be completed in order for an objective to be met. The tasks should be specific, measurable, and actionable so that each team member knows exactly what they’re accountable for.
OKRs Benefits for Early Stage Companies – 4 Reasons You Must Start Using Them Today
1. Align everyone to the founders goals and vision.
The founders have to be very specific with their vision and goals, and everyone needs to be aligned. Every ounce of activity is important in a startup and it is super important to make sure they are contributing to the right goals. The founders are responsible for managing this goal alignment among all employees.
2. Iterating on Product Market Fit
The reason OKRs are so effective for startups is because iteration is hard. A startup needs to test many ideas before hitting on something that works. The process of iterating on a product is expensive, time-consuming, and risky. Founders who rely on funding from investors through Series A or B often miss out on early innovation because they don’t have the time or resources to constantly test new ideas
3. Make your startup accountable for achieving its OKRs
Defining OKRs sets a clear target for the team and more importantly, the team is aligned to act on them collectively. This nicely leads to the team members owning their portion of the plan. By clearly laying out who is working on what outcomes, the entire team naturally makes them accountable for executing the OKRs.
4. Set the right culture in the startup that is focussed on results early on
A culture that is focused on results early on means that people are encouraged to take risks and try new things. People are also given the opportunity to make mistakes and learn from them, while still getting rewarded for their efforts. This helps to create a culture where people feel comfortable in taking risks and making mistakes, which allows them to grow as individuals. Calculated risk-taking is what startups do day in and day out. OKRs help spread this trait to the entire team.
OKR Examples for Startups
- Product Market Fit OKR Example
- O: Evaluate product fit with segment X
- KR: Identify value proposition and create a landing page
- KR: Obtain 30 signups via Growth Hacks
- O: Evaluate product fit with segment X
- Product Traction OKR Example
- O: Double paying customers
- KR: Launch a self sign up channel
- KR: Get 30% of new signups via affiliate program
- KR: Onboard 2 partners who take a signup quota
- O: Double paying customers
- Go To Market (GTM) OKR Example
- O: Study and document our ICP’s customer journey map (CJM)
- KR: Conduct 20 interviews to find out how the target audience really feels about the product
- KR: Create the CJM and map the product features to the prospective customer’s journey
- KR: Increase the website conversion rate to 15% with updated messaging.
- O: Study and document our ICP’s customer journey map (CJM)
- Fund Raising OKR Example
- O: Raise a million dollars
- KR: Identify 10 strategic investors in our space.
- KR: Pitch to the identified investors.
- KR: Follow up each investor with a sequence of 3 meetings
- O: Raise a million dollars
Irrespective of the type of goals you are trying to accomplish – personal, professional, or organizational, working on them within the perspective of Objectives and Key Results is going to make the process more practical and achievable because OKRs let you focus on what matters the most and pave the path for goal execution. In addition to this, organizational OKRs bring alignment between teams and the organization, laying the foundation for High-performance culture.
To learn more about how OKRs methodology can benefit your organization and how you can transition your team to OKR methodology seamlessly, schedule a call today.
