Beware of Falling Rocks

We regularly circulate business books among our Executive Team to help us identify new ideas or best practices to apply to the company. Several of our selections were designed to condense an MBA or a career’s worth of valuable experiences into a few hundred pages, giving an entrepreneur the tools and confidence to, for example, draft a mission statement and set of core values, build a team of A-Players, or unlock their businesses’ strategic vision.* One of the most common topics is annual planning - guidance is offered on how to turn a set of goals and a strategic vision into action plans, and how to break down longer term targets into manageable pieces.

I suspect the assignment demands brevity and simplicity, but, with all due respect to these authors (who no doubt are deservedly selling countless additional copies of their books in the time it takes you to finish this sentence), it can be frustrating that many are still promoting the use of single line “Rocks” to try and turn long term goals into immediate actionable items.

What we have learned at our business is that a well-written OKR provides far more information than can be conveyed by a single line target. Using OKRs, our managers have greater guidance regarding the necessary actions to achieve those goals, while the executive team possesses a better way to measure progress and encourage accountability during the period.

Rocks -> OKRs: An example

Let’s return to the previously defined Aspirational OKR to highlight the benefits of providing additional detail. When creating a goal to enhance our strategic priority of maximizing engagement of our software platform, the typical template for a single-line Rock would yield:

Annual Rock: “Increase user activity on our platform.”

Compare that to the full OKR below, which provides a roadmap offering a number of clear benefits not available from the shorter Rock.

Aligns To:	Build an intuitive platform which maximizes monthly engagement
Team:	Marketing, Customer Support, Account Success, Software Development	Aspirational
Objective:	Increase average monthly activity per user by 15% for Q4 vs. Q4 in Prior Year	Target Date
Key Result 1	Publish at least one blog post per month highlighting under-utilized features (Marketing)	12/31/22
Key Result 2	​Launch in-app guides providing application walk-throughs and identifying key features to the users for at least 50% of existing enterprise customers (Customer Support)	6/30/22
Key Result 3	​Initiate email outreach sequence to at least 25% of users on the platform focused on driving usage (Account Success)	9/30/22
Key Result 4	​Launch to production user-experience improvements to reduce steps and friction in ordering process (Software Development)	6/30/22

Specificity - “increase user activity on our platform” isn’t a wrong objective. It is consistent with the strategic priority and would be easily understood throughout the Company. It even passes the dinner table test. When you’re at your parents’ house for Sunday dinner and your father asks you what you’ve been up to, answering that you’re working to get your customers to use your software more likely will earn the oh-so warm and satisfying feeling of an approving head nod from Dad... at least until he follows up and asks “by how much”, and your pride bursts as you quietly avoid eye contact and search for an answer in your chicken pot pie.

As frustrating as it is to admit it, Dad is right. A well written Objective demands that two questions be answered.

1. What is the benefit you are trying to create?

2. How will you know when you get there?

By contrast, any instructions I have read on creating Rocks require far less definition. While Rocks certainly allow for specific targets, OKRs require them. Use an OKR, be specific in your goal, and look good in front of your family this week.

Clarity - If you thought Dad stumped you, wait until Mom asks you “how”. And if Mom is unsatisfied by your response, just imagine how your team feels because you neglected to give them any direction - an annual goal with no underlying plan is basically just a hope.

Compare the single-line Rock again to the detail offered by the OKR, where the Key Results define the required underlying steps to take along the way to achieve that outcome. Following this OKR would provide a clear understanding of what was expected, and by when, allowing our departments to manage their day activities against this expectation without requiring our constant involvement and direction.

Collaboration - OKRs also promote engagement within and across teams. A tenant of a well written OKR is that if all of the Key Results are completed, the Objective should be achieved. We have found it is common that while our highest level Objectives are defined by the Executive Team (as they would be for Rocks), the Team Members and Managers in our various departments are much closer to customer needs and opportunities for improvements, and are best equipped to draft the more detailed roadmap contained in the Key Results.

Measurable Progress - Key Results function like a project plan, with transparent milestones and accompanying due dates. The end goal to “increase user activity” doesn’t offer much when determining if you’re on track midway through the period.

Once defined, we track progress against each of our Key Results, represented as a percentage, and measured against time remaining until the stated Target Date. While this doesn’t guarantee we’ve defined the right Key Results to reach our Objective, at least we know definitively if we’re making progress against what we said we would do. And if we did set the wrong goals, knowing we fell short of the Objective while achieving all of our Key Results is valuable feedback that guides us to try different actions in the next cycle.

Your Turn!

This is perhaps the easiest advice to follow that I am going to offer. Just use the “find and replace” of your mind to substitute “OKR” whenever you see the word “Rock.” Since top-down goals are likely to be created by your immediate leadership team, transitioning Rocks to OKRs can be completed almost immediately, and certainly as soon as your next planning cycle.

Our experience is that department heads and team members appreciate the extra guidance being offered by the greater specificity, and you’ll benefit from an increased ability to track progress. Additionally, as our broader management team has become more familiar with the OKR framework over the last few years, they are increasingly creating the most useful Key Results themselves against the top-down goal presented, further improving our quarterly goal-setting and execution.

If you’re stuck on where to start, go back to the last two posts on Anatomy of the OKR and Meet Your OKR’s Supporting Cast to help you write great OKRs, or, better yet, reach out if you have any questions.

* This year’s was Traction by Gino Wickman. I’d recommend it, particularly for the chapter on deploying more productive meeting cadences. We’re test driving that this year… tune back in later and I’ll let you all know how it goes for us and what we would suggest to others looking to drive more valuable leadership meetings.