Welcome, everyone. This is our last roundtable of 2024. We’re so excited to have you with us today. We’re covering a topic that I’m sure is on top of everyone’s mind setting their OKRs and their plans for 2024. Starting the new year off with the bang. With us today we have Daniel Montgomery. He is the founder and managing director of Agile Strategies, a boutique OKR consultancy that helps companies achieve transformative results in growth, innovation, focus, alignment, and engagement.

Prior to founding Agile, Daniel was the vice president at Balanced Scorecard Institute and a senior manager at EY. He’s got a lot for us to talk about today. And thanks to all of you. You’ve submitted so many questions that we also will try and get to. We want to make this interactive and dynamic, so feel free to jump in and ask any questions along the way as he’s going through his prepared slides. And then we’ll have, like I said, an open Q& A at the end.

One thing I wanted to kind of start out with, and just putting it into the chat, but what are your current biggest OKR challenges? And as you’re typing that, I’m going to hand it over to Daniel to get us started.

Okay, let’s start off. We’ve got a little bit of a poll. I’m not sure everybody who’s going to be on the call is on it, but that would just help me kind of pitch this at the right level. So I think Mary’s got some poll questions for us. Where are you on your journey with OKRs? Are you just beginning? Do you consider yourself pretty knowledgeable? Or are you somewhere in the middle? I’m assuming if you’ve written a book about OKRs, you’re probably not on the call. So we’ll just give you a few minutes to, a couple of minutes to do that.

And then why don’t we close that off and see what the results are.

Lost audio again, our speakers again. Lost my speakers again. People can hear me, I can’t hear them. Can you mute her, Mary?

All right.

Okay, so most of us are in the middle. We’ve got some that are ranked beginners. So that’s, that’s helpful to know. So many of you may know enough or have read enough about it that that contributes to questions. This group has asked more questions than any other group that I’ve spoken to. So I’m going to try and get to as many as I possibly can. But we will leave some open time at the end for anything that’s burning that you don’t feel like we’ve covered or has just come up as part of the conversation. So let’s see. Was that it for the polling, Mary?

Or did we have another one? That’s it. Okay, I am going to share my screen and just jump in here. Let’s put this on presentation mode for us. Okay, so you will get a recording of this video as well as the slides. So if I’m skipping over anything, you can ask a question or review it later. Also, you’ll get my contact information if there’s anything you want to ask me afterwards. So what are OKRs? You know, we’ve heard a lot of talk over the years about SMART goals and OKRs are really fast goals.

They’re for high velocity organizations, which is why, you know, the birthplace of OKRs is in Silicon Valley, because it’s an environment characterized by intense competition, very high business tempo. None of this is any surprise to any of you, I’m sure. So when we call them a fast goal, that breaks out into they’re frequently discussed. So the idea is that we are keeping the outcomes that we’re after right in front of the windshield all the time as we’re driving along.

Rather than getting too focused down in our initiatives, we always have an eye on what the higher goal is. They’re aligned. Developing OKRs is a way to start with what’s the North Star of what your organization is trying to achieve? And then how do we break that down? So everybody sees an alignment between what they’re doing day to day and the overall goal or the North Star of the organization. They’re stretchy. So one of the differences between other methods of goal setting that I’ve worked with personally, is.

this stretchiness, because it really calls forth this newer idea that the fail fast, learn fast kind of concept, which was really not the case when I started my career. You wanted to set a safe target and just guarantee that you got there, but we really don’t innovate or make much progress if we do it that way. That’s an approach that grew up when the economy was much more stable than it is. So stretchy. You need the level of trust and psychological safety in the group in order to really learn from mistakes and be open about mistakes.

And finally, they’re transparent. Everybody in the organization should be able to see what everybody’s working on. That can lead to really positive network effects. So that’s what we mean by fast. So an objective is something that’s tied to the strategy of the organization. It’s typically, it’s an aspirational statement. It’s qualitative. So you might say, be number one in the XYZ space. The key results are there to actually keep us honest about, well, what would that actually look like? It needs to be measurable.

It needs to be verifiable, quantitative that shows progress on the objective. So the grammar of an OKR is we’re gonna be number one in the XYZ space as measured by one, two, three. So that’s the idea with objectives and key results. The big difference between the way that we typically operate is we’re shifting from an emphasis on outputs, like I’m getting this project done.

And when we have a meeting around the table, we’re gonna do a show and tell, and I’m gonna say, well, I’m about 50% of the way towards this deliverable to spending more time focusing on the outcome. So the outcome becomes the way to frame a management meeting or a team meeting and then the tasks kind of fall under that. That actually turns out to be a more efficient way to run a team meeting. So we’re moving more towards a focus on the delivery of value to customers with the idea that we’re more flexible about how we’re actually gonna be there.

If the deliverable I’m working on is not getting us toward the key result, we change that rather than getting addicted to our initiatives, which I worked on a few big projects in my IT career, I would characterize as zombie projects. They just take on a life of their own and we all forget why we were doing it. We forget what the value to a customer really was. So let me just take you a little bit back in history. It’s an important point about how did modern OKRs develop? They are not really a brand new idea that just came up in the last few years.

The idea of how you set goals and objectives for knowledge workers, as opposed to measuring efficiency of people working in a factory goes back to the 1950s and Peter Drucker, who was a mid- century genius in terms of being a management guru. So he came up with this idea of management by objectives. So the boss sets their objectives and then five people report to the boss. They each develop objectives that support what the boss wants to do. And that might go down in a couple of other levels in management.

So what the problem with those was those came up when our society and our economy was much more stable and relatively predictable. If you were General Motors in 1955, you could predict what the market ought to be in 1956 or 1957. That was before the invasion of all the Japanese cars that happened in the 70s. So Andy Grove at Intel really loved the idea of management by objectives but he made some important tweaks to it.

He involved more people in it because he realized if you’ve got a team of engineers, they all need to buy into what the objective is and have a say in what the objective for their particular team ought to be. So it’s not just manager to manager to manager. The other thing with MBO was it was tied very directly into compensation. If you achieve what you said your goal was, you get a bonus. That doesn’t work when you’re dealing with the level of uncertainty and change that Intel was dealing with in the 70s and 80s.

And so decoupled from a compensation you could say involving a lot more people and faster, rather than being an annual kind of objective or goal, it became quarterly, if not more rapid. So big difference there. John Doerr.

Worked for Andy Grove. He was an acolyte of his. Basically took that out into the market when he joined Kleiner Perkins sometime in the 80s or 90s. Took that into some of his early investments, including most famously Google and some of the other ones. So he’s really been the Johnny Appleseed of OKRs. Wrote the book a few years ago called Measure What Matters and been a very, very popular book. So that’s where OKRs actually came from. It’s the evolution of an idea that’s actually been around for a while.

And my career, coincidentally, I started off actually working for the state of Washington in their training department because I went to school in Olympia and didn’t wanna leave. And we were teaching people management by objectives. Later on, I worked with another model called Balance Scorecard, which is kind of a related strategy execution model. Saw that that really wasn’t agile enough, started Agile Strategies, and started working with OKRs close to 10 years ago now.

So a question here about, and this relates to, I think, at least one of the questions I saw that one of you may have submitted, that what about using OKRs for the regular jobs to be done that just have to happen? And I think this slide will illustrate a little bit of it. A lot of people will say, well, OKRs are over here. They’re about moving forward strategically. They’re not about business as usual. In reality, I think there’s a spectrum of things because particularly in your kind of organizations, there’s probably not that much business as usual.

There are certain things that you need to do to keep the lights on, to pay people, manage cashflow, all of those kinds of things. But a lot of what you’re doing is really new. So the way that we think about it is if you’re just focused on a function that’s keeping the lights on, you can use KPIs. Like we want receivables to look between this and this number. We wanna manage payables this way. We wanna manage people this way. We wanna keep turnover to a minimum.

You manage those with key performance indicators, which are not quite a full- blown OKR in that they may not have an objective. It may be just a simple number. And you’re keeping the lights on, just maintaining the core business, whatever that might be. And then there’s two levels of OKRs that go up from that in terms of how far ahead you’re thinking and how much risk and learning is involved. So you’ve got roof shots, which if you’ve read Measure What Matters, John Doerr calls those committed OKRs.

Those are things that you know with enough focus, you know how to get them done. You just, you need to exercise the muscle to make a commitment to the goal and just get it done. So that’s a roof shot. A moon shot, like the original moon shot, nobody quite knew how it was gonna happen. There were a huge number of questions. There had to be a lot of collaboration, experimentation and learning in order to make it work. So these influence the kind of OKR that you write. The ones to the right are gonna be more experimental.

You’re gonna be testing hypotheses and assumptions about your product, about your market, whatever. The ones on the left are far more predictable, at least in terms of understanding how to measure them. So often the further to the right you get, the trickier it is to actually write good key results that are really relevant. And so any organization should have a budget of their metrics in terms of which ones are more important. If you’re a really raw startup, you’re gonna be much more to the moon shot end of things.

You’re still trying to find your product market mix, for example. So, you know, in a typical mature organization like this example, 70% might be about running the business. 10% is about what’s gonna transform us, what our new products are gonna be in the market five years from now, for example. So this really kind of repeats most of what I said already. So I think the point that I want to make about OKRs is they are about delivering new value to a customer. So any key result you’ve got, you should be able to say how that delivers value to a customer.

Even if you’re delivering value to an internal customer, you’re doing something on one team that’s gonna enable another team in the organization to do something that’s gonna benefit your end customer, in which case that other team is actually your immediate customer. KPIs are more like what we would call health metrics. They’re just the things that need to be working in order to keep the organization flowing.

There is a question that often comes up about using OKRs for individual goals. And it’s a pretty tricky thing. A lot of OKR consultants will say, just don’t do it. Just say no. I think it’s actually a little more subtle than that. For most people in an organization, it is inappropriate to have an OKR as an individual goal. It’s better to have OKRs as a team goal. And then the way you evaluate the individual is, are they participating as a good team member in the process? Are they willing to stretch?

Are they willing to provide feedback and receive feedback, learn from mistakes, or just learn from experiments? You don’t even have to think of them as mistakes. Do they have a good attitude? Are they adhering to the values of the company and that sort of thing? Probably the biggest exceptions might be senior executives and salespeople who often are compensated based on that. And a lot of times, board members and investors really feel that needs to be in place. So those are the exceptions that generally prove the rule.

Daniel, we have- Do we have any questions so far? Yeah.

We had a quick question in the chat. Would you recommend department- level OKRs that waterfall down from the company- level ones?

Yes, absolutely. Yeah, so I mean, the thing for that is for the team to go through a process that says, well, if we’ve got this company OKR, what is it that we do within the domain of our function or in conjunction with another team at our level that’s going to contribute to that? You know, so if we need to produce features faster, we might diagnose that, you know, the problem is we’re not really very good at project management.

And so somebody in the training function might say, well, I can contribute to that by providing a project management course and measuring people’s competency at project management. So you kind of do a root cause analysis and break down what the drivers are. You know, if we’re going to be delivering features faster, what needs to be true? And you sort of do a functional breakdown with that.

And I’ll put this in the chat once I get out of presentation mode, but there was a great article by Jeff Goddelf, who’s a very product- oriented OKR person about how to actually do that kind of decompensation and decomposition, rather. And I think it’s worth taking a look at to help answer that question. Any other, anything else, Mary?

I know we’re out of time on the chat, but feel free to chime in. I know there was a lot of pre- submitted questions.

Okay, I’m going to just skip over that one and say, this- We just got another one, Daniel. Okay, sure. Well, let’s give priority to the questions.

Do you have any tips on how to manage the definition process of OKRs that require cross- department involvement?

Read that to me again, please.

Do you have any tips on how to manage the definition process of OKRs that require cross- department involvement? And then feel free to hop in and clarify.

Okay.

Well, the anti- pattern would be that, you know, department A defines an OKR, and they’re going to need support from department B in order to do it, but they don’t bother to tell department B. Meanwhile, department B is working on its own OKRs. So problem there. So what I encourage people to do is something like, you know, the RACI framework is one way to do that.

So you’d say, well, you know, we’re the ones responsible for that, but we need a contribution from team B. So before you set the OKR, you really should sit down with team B or a representative of team B and work it out. And then actually have it be shared. You don’t have to be hung up on if you’ve got a hierarchical organization chart with all these functional teams. Use OKRs to cut across the silos. That’s a really, really powerful approach.

And, you know, think of yourself as participants in a value stream that’s ultimately providing value to some customer. And I mean, I think the other thing, it’s really about starting at the top and going, okay, how do we contribute to that? Like the example of the trainer. But the other thing is to really maximize engagement for people. Often there are local issues with a particular team that are unique to that team and not a problem. Like you might have a particular issue getting the right skillset into a team.

You know, the skills are very hard to get and that’s not a problem for the company as a whole, but you need to address that. Or you might have just a process bottleneck of some kind with another team. So that’s where OKRs really thrive in an atmosphere of openness, where you feel like we can go to team B and say, hey, I think we’ve got a problem and they’re willing to talk about it. So there’s a lot of those kind of cultural features of organizations that I find really contribute to OKR’s success, which is there’s trust. There’s trust there.

Anything else coming up, or whoever asked the question, if you want to clarify that.

OK. Actually, the ratio is a good answer to how to manage the tension between departments when defining OKRs. I’ll take that as a tip. Thank you.

Yeah, yeah, it’s a good framework. OK, great. So one of the things, when you think about strategy, I get in a lot of discussions about strategic planning. Some organizations really feel like we have to have a strategic plan every three years. And really, for most of you folks, and I think for most organizations these days, even if you have a long- term strategic plan that defines your long- term vision of where you’re trying to go, you really need to get people engaged in focusing on what are the current challenges in actually getting there.

So this is an example. I came up with the term minimum viable strategy because I think people waste a lot of time with strategic planning. And you need to just answer a few key questions about why do we exist, who are we serving, what’s our vision, what values guide what we will do and will not do, where are we playing, how do we intend to win, what resources do we need to fund in order to make all of this work. But then within the shorter cycle that we’re working in, in like a 90- day OKR cycle, your strategy should define a North Star.

So the example I’ve got here is, well, we’re going to get to this ARR by the end of 2026. And you say, OK, from where we sit right now, we’re setting our OKRs for Q1 in 2024. What’s the big, what’s the crux of the issue right now? And this guy Richard Rommelt actually wrote a book called The Crux. He’s a strategy professor. It’s a really good book. I really, I could really recommend it. What is the big challenge we’re facing right now that we need to overcome? Like we don’t know how to get to our customer. We don’t know who our customer is.

We don’t know what’s motivating them. Or there’s a particular technical challenge with the product that we want to build. So we define that. So in this case, we’ve said, well, we have to improve customer retention because we have a problem with that. So let’s brainstorm what the drivers of that are. It could be our UX. It could be our customer support. So it’s a design thinking cycle because you’re starting with a problem or a challenge that you’re trying to fix.

And then defining, well, all right, if we decide, well, one of the problems is UX and we’re the UX team, what key result would tell us that we’re making progress? So we start decomposing again this thing into like, well, what aspects of the UX we’ve got are helping or hindering customers being engaged with our site, for instance? So you use that to frame what the OKR looks like.

You run the OKR cycle, do your regular tracking and regular checking conversations, do a retrospective at the end of the quarter and say, OK, do we declare victory on that OKR? Do we need to modify the North Star? Like if you’ve read Measure What Matters, there’s a great story in there about YouTube going through several iterations trying to define what their North Star was. And they finally decided it wasn’t how many users we’ve got, it’s how long the user stays on the site.

That’s actually more important than numbers because that means the users we’ve got are addicted. So that’s what we want. So they modified their North Star as they went through this kind of a process. Let’s see here. Got some examples of good and bad OKRs that we can look at real quick. This is often the kind of objective people will come up with initially. It’s kind of business as usual- ish, improve and streamline recruitment process. And often, what do we even mean by streamline?

So the idea with an objective is you’re putting yourself at a point in the future and asking, what would it feel like to be at this point in the future? And then we use the key results to work our way backwards. So we’re going to have the A team. We’re going to have the best possible people who work well together, have all the right skill sets, all of that. And the recruitment process, improving that is an initiative that we would undertake in order to get to the A team. So it’s really important to make a distinction.

The biggest mistake people make with key results is they write tasks and projects. The key results are actually measurable things. And I’m going to get to that on the next one.

A couple of examples here, onboard two new suppliers. Let’s say we’re a company that’s, you know, we’re essentially an online catalog. Well, two new suppliers sounds very quantitative. It’s probably too quantitative for an objective because an objective should really be more aspirational and more qualitatively. So what we want to do is we want our customers to be impressed with our products. That’s really the ultimate goal. I had a company that was trying to, before the pandemic, they were going to open a bunch of stores.

They’re a famous global outdoor gear company. They were going to open stores in South Asia. That was not possible. Well, why were they doing that? They were really doing that in order to increase their sales. So how else could we do that? Well, they poured all their resources into going online. And by the end of the year, their online sales were 75% of the total. So they really got down to what really, really mattered. Going to jump ahead to the next one here. A couple of examples of key results. Here’s a classic.

As I said, the most common problem with key results is we turn them into projects. We turn them into deliverables. So you want to ask yourself, why are we launching the new website? Well, we don’t think the one that we’ve got is engaging enough. Well, why don’t we come up with some measure of how engaged people are instead of launching the new website? Maybe we don’t need a new website. Maybe we can do something else with the one that we’ve got. So we’re going to measure the click- through rate. That’s actually more important. Here’s an example.

This one isn’t bad. You know, it’s quantitative as a key result should be. We’re going to increase investment by $ 20 million, but in this case, we talked more about what kind of investment they wanted. They wanted smart investments. So we don’t want 100 investors. We’d like two who are in it for the long haul and are willing to really put a lot of skin in the game. So the first one isn’t bad, but the second one is really better. This is the example I was talking about. This company was going to open offices, bricks and mortar, no longer possible.

What they really wanted to do was expand sales.

Daniel, we had a question come in from Nick. Nick says, and Nick, feel free to join in, and Kevin already responded in the chat, but what are the best practices on reviewing progress against OKRs both during and after working towards them?

Funny you should ask that question. One of the best practices is having frequent check- ins. Another big pitfall is what we call set it and forget it. So don’t let the perfect be the enemy of the good. You can spend a lot of time planning and trying to come up with the perfect OKRs. I would say, get something that you can talk about and then just start talking about it week to week as your experience evolves.

So frequent check- ins during the course of the OKR cycle, and then at the end of the OKR cycle, doing a really thorough retrospective and saying, well, we came up with these OKRs. Did we get there? Did we not get there? Why didn’t we get there? What assumptions went into the OKRs that we set and have our assumptions changed? We all have this view, this mental model of the market that we’re in. What happened in terms of competition? What did we learn about customers? What did we learn about the technology? That kind of thing.

The weekly check- in here is a mix of kind of data- driven, objective conversation and more subjective feeling that really becomes important here. We value our intuition and our hunches about things. So step one, the owner of the OKR.

the accountable person or the responsible person, depending on how you’re using RACI, reports tangible progress based on data. What does the data tell us? But often, unless you’re really skillful at using leading indicators for key results, the data may not be showing anything yet, even though you feel like you’re making progress. So the second point here is very important, that how confident are we that we’re actually gonna get there?

So often we’ll use like that agile technique of a fist of five, you know, is everybody at least at a four, if you hold up one to five fingers and how confident are we that we’re gonna get there? Or you can use traffic lights, which reduces it down to three. But the whole team needs to participate in that, I think, because it could be like, well, I heard something the other day about what our competitor is doing that really worried me. So let’s talk about that a little bit. That we might need to speed up, we might need to put more resources on this one.

And that’s the third one where we’re saying, well, applying resources and tasks to achieve the key result are we doing the right things to get there? And finally, how well are we working together? It’s really good to just take five minutes at the end and say, okay, are we feeling like we’re getting the issues on the table here that really need to be here? So I think that’s an extremely important thing, Nick. Any comments on that, more question on that?

This was really helpful, thank you.

Great, good.

We also had Kevin chime in here. Are the best owners of OKRs executives or some sort of biz ops type person with more of a SME plus project management skillset, or should it be both exec sponsor for authority plus someone who can live in the data and really drive things?

Well, my view of what the owner should do is the owner should know what’s going on. The owner is not responsible for doing everything connected with it. But it’s, you know what the data is telling you and you know what’s being done in order to do that. I think the answer depends on what level the OKR is because if you fully elaborate it, you could have, and I’m gonna segue over to this slide because it addresses a question someone else had, it might’ve been you.

You’re gonna have OKRs at the leadership team level and you’re gonna have them in functional teams or shared across teams. And so you could have owners of different personalities in different functions in the organization. So I think the answer is both. Does that get at your question?

Yes, it does. Thank you. I also think from my perspective, having been with, I’m with ShipBob by the way, I’ve been here since we were, you know, 25, 30 employees and now we’re, whatever, 1, 500. I think the answer for us has changed a lot throughout too. You know, early days, of course, it could just be an executive and it would get done because, you know, it’s a company of 50 people or whatever.

And now it seems like we need a lot more of this interstitial sort of connecting tissue type people that help us keep the boat moving kind of in the right direction.

Yeah, absolutely. Yeah, and that’s often what I find. When I start working with an organization, they’ll talk about these big outcomes that they’re after and they know what the North Star is and often go into it thinking, well, our OKRs are gonna be about our market share or our revenue or whatever it might be. More often than not, the OKRs end up actually being about improving capabilities. And like, that’s a good example.

I’ve worked with a lot of organizations where when you get down to the crux of the matter, it’s like, we know how to deliver the service or the product, but we don’t know how to scale this. And I think what you’re talking about is an issue of scale and the way that you’ve dealt with it. Somebody had a question here about, what does the investment committee level need to know? What’s happening at different levels? So I put this slide together.

So basically, the IC or the board, whatever you have, I think you wanna focus on a few key things that are probably gonna be more lagging indicators kinds of things. The leadership team should be focused on functional OKRs across the whole organization because you’re in it together. And then the team level OKRs, as I talked about, focus on unique team performance issues, cross team issues. So, you go from less to more, and I always say less is better with OKRs that you should have as few OKRs as possible, but not too few.

That’s why I think it’s a real mistake to go too fast. Okay, everybody’s gotta have OKRs by Friday and turn them in, big mistake. You really wanna start with a leadership team and then fold in the other teams as you go along so that the leaders really understand how to use OKRs and what some of the pitfalls might be.

So I’ll go back to the pitfalls and leave that one up. I’ve already talked about some of these already. Shadow goals is one other one that I’ll mention because I’ve had cases where we spent two days with the leadership team, we came up with all these OKRs, they were well- defined, they all had owners. And in this one case, the CEO went off to a board meeting, came back with other kinds of things, but it somehow did not occur to him that, well, maybe we need to modify them.

So he’d start working one- on- one with different people and saying, I really need you to focus and what about my OKR? Well, this is more important. Well, then it should be an OKR. Like, don’t hesitate to change the OKR if it doesn’t feel like it fits anymore. So you could call that a shadow OKR or a zombie OKR, if you will. I’ll show you this one too.

I’m sorry, can you, Daniel, do you mind talking more about the last point on that slide? The- Sure. Sorry, it had to do with, oh, the Big Bang Approach.

Yes, I was kind of curious. The Big Bang Approach. Well, the problem with doing it all at once is you’ll end up with way too many of them. I had one client, they had us come in, we spent a lot of time developing them at the leadership team level, and then they said, OK, thanks very much. We’ll take it from here. The next thing I knew, they had basically demanded everybody down to the individual level. It was one of those examples of get your OKRs in by Friday.

And the problem was there wasn’t enough experience at the senior level to really guide what other people were doing. And you ended up with a huge amount of duplication. And just, and those other folks did not get the level of training or the level of support that we had provided to the leadership team. So you ended up with a lot of repetition and a lot of redundancy, which goes against the principle of just having as few as possible.

So, you know, there’s always gonna be exceptions to this one, Kevin, where you really need to focus on OKRs in a particular pilot or a particular product. You’ve really got a problem in HR that you need to focus. And those are the exceptions that would prove the rule. But usually my experience is we work with the leadership team for three to six months before we start rolling it out further.

Thank you. That is very timely for me right now.

Appreciate it.

Good, good. I’m glad, I’m glad. What else is coming up in the chat?

So Daniel, we had a question earlier about the biggest complaint we get from teams is that the initiatives are not aligned and people feel the process is too top down. What is the best way to get that alignment? So essentially how to get people, you know, on the bottom more aligned to the top goals or bottom.

Well, it’s interesting that this person mentioned initiatives because we’re not talking about cascading initiatives. We’re talking about cascading results. So I think if you focus on the results first and then see how the initiatives fit in, that helps quite a bit. What was the second part of the question?

I can jump in. Hi, this is Sanowi. So we do our KRs, right? But when we present the KRs without actual plans on how this is gonna happen, it just feels like, thank you for putting out a number that we will never achieve. So then what we do is we basically, once we do the KR part of it, we cascade down and the teams put together the initiatives that we think will get us to the KR, right? In order for it to be a believable goal.

Those initiatives though, because the KRs for us are very cross- functional, those initiatives involve a lot of different groups. And we’re only as right now, like 200 and something people. So we have like an executive lead, if you will, on the KR. And then that person is tasked with making sure that there is communication cascaded down to the groups what are the teams working on that will lead to this result. And then we groove that into the initiatives that are being worked on across the organization.

But when we’re going through that second part, because is where we get a little bit of like, well, like, where did this KR come from? Like, this seems like we’re already working on this initiative. We were working on it from the beginning kind of thing. And there’s a little bit of like lack of alignment at that level.

Okay. Okay.

Say a little bit more about the lack of alignment at that level.

Well, I think people, people feel like, so for instance, some product folks are like, hey, we’ve been working on, on, I don’t know, you know, building this X product, we might come up with a KR. And now, in some ways, in order, again, because technically this should, this should, as my understanding, and I failed a lot of times at implementing OKRs, this should be, you know, sort of a guiding light as to what we all work collectively on, right? Like, this is basically intended to make sure that we’re all working towards the same goals, right?

And that all of our work, like, adds up to, to, to these results. Sometimes the results are not necessarily, like, directly aligned to the things that people are actually working on. And since we do them on a quarterly basis, sometimes people are like, well, yeah, sure, I’m going to put this initiative there. May or may not actually be related to that, to that result, but guess what? It also doesn’t fit into the other results. So we got to kind of like fit in our work somewhere, if that makes sense.

Well, then why would you be doing it if it doesn’t fit in with that? I mean, I think, I mean, I think, I think it makes sense. Either it’s got to be something you need to do to keep the lights on, because, I don’t know, your whole tech stack is going to collapse because Microsoft isn’t supporting something anymore. So that’s, you just got to deal with it. And that’s, it’s kind of boring, but somebody’s got to do it to stay in business.

So that might not necessarily fit with an OKR. But I guess I’d question, why are you doing this initiative if you can’t demonstrate the logic of how it goes up to an OKR? Yeah, it’s a good, it’s a good question.

I think it’s the linear nature of the result. But I think the question that I would have for you all is. Once you get past the OKR, like what is the best way for you to cascade it down to the work if it’s not initiatives? I think one of the things you question in your initial response was like, well, what, you know, what is this, you know, like, why are we talking about initiatives? And I get it. But if all you’re doing is putting out a KR, then how does that actually cascade down to people’s work? And I agree with you 100 percent.

I think, again, the trying to do everything and doing company wide OKRs down to the individual basis, I’ve seen that fail quite a few times by now. So there is a, there is, you should be humble about how you’re going to deploy this and introduce it. But there is something about how do you communicate that down for that alignment, if not with an initiative? I’m open to change anything for that.

Well, I mean, I agree with you that maybe you don’t need OKRs for every team. You know, I had one client that they had about 3000 employees. They’re all over the U. S. And we did OKRs at the leadership level and then the next level down because we basically built a whole like customer value stream and then looked at like, where are the gaps? Where are we trying to improve? So that led to like, OK, functional team A’s got to do this and team B and C got to fix this bottleneck. And we didn’t take OKRs any further than that.

And when the executives did a road show in Denver, there were like 400 people in this big ballroom. They described all the OKRs without even using the term at all. But they did a really good job of saying, here’s where we need to move the needle and here’s why it’s important. And everything from that level down was an initiative and it worked fine. So it kind of depends on your audience that way. So I’ve seen what you’re describing work.

Kevin, you want to jump in?

Kevin had some thoughts that he put in the chat that might be helpful.

Sorry, I feel like I’m so active here, but I just love it. I’m living this right now. I hope I pronounced that right. We’ve tried to do two things. We’re not perfect. It’s progress over perfection. But to get to that level underneath the KR is, well, first of all, before we even do this, so step zero is like justify the KR. Like, why should it exist? And we have like a more centralized process for that than we did previously. So instead of just executives saying, finger to the wind, we need to do X this year, there’s some of that, of course.

But then there’s like a secondary layer of refinement and justification where there’s like, OK, here’s why this matters. Here’s, you know, some evangelization that we’re doing internally. Then step one is how do we make sure the department OKRs reflect a contribution to the goal? And that’s like a like a sort of alignment process. And that’s really bottoms up. Like they get to pick what they they think is best for their business unit. They know their business unit best.

But it does elicit questions if like our head of merchant care or like a customer support arm doesn’t have anything about contributing to one of our OKRs that is related to customer experience.

Right.

That’d be a red flag. But they get to pick what they want. So it’s decentralized. Then the third piece is we have like a program manager, strata manager person that is attached to each OKR and is looking at the data every day and is kind of driving some initiatives that might be needlemovers that other folks haven’t thought of.

Yeah, I mean, and I think what you’re pointing to is that if you’re going to have OKRs at a particular team, it needs to be really meaningful to the team. Otherwise, I would question why you’re doing it because it might feel too top down. So what I was describing, it’s a combination of top down, bottom up and sideways. So that it’s if I’m on a team and we got all these problems and I’m just responding to all this top down stuff, it can just feel it can feel a little bit oppressive, you know, in some environments.

So if it’s also OK to say, well, look, we’ve got we’ve got one that supports the top down thing, but we got a problem we need to deal with or we’ve got a problem with this other team. Let’s address it. It’s going to be much more engaging and not feel like just another thing we got to do that somebody is telling us we have to do that’s not really relevant to what matters to me. I put this in the chat. This was an interesting article I saw in the last week by Jeff Gotthelf, who’s a really good author on using OKRs in the product development space.

So I really encourage you to take a look at this because it is that idea of like, how do you take a big idea of who you want to be and then really break it down into OKRs at successive levels? So it’s one of the better descriptions I’ve seen. Really recommend it.

Daniel, going off of some of the other questions that were submitted and kind of going back to what you said about just not another thing that we need to do, are there any platforms or any way of tracking the progress towards these goals that you would recommend?

Well, that’s been there has been a huge tsunami of money going into OKR software platforms. There are dozens and dozens of them. A few years ago, I was naive enough to think I could have a pretty good picture of what they all did, and I really had to give up. There’s a lot of them, I mean, a lot of like HR platforms include OKR functionality. There are some that are pure OKR functionality. If you’ve got a relatively small team, you can probably do something really good with Google Sheets or Excel if you’re in a Microsoft environment.

I mean, I think there’s certain features they need to be there, like the basic, the basic here’s an objective, here’s key results that support it, here’s the tasks and initiatives that support that. It’s pretty simple to code. So, I mean, they pretty much all have that basic. But I think where they differ is, do they support the conversations that need to happen around that, for example? That’s something I would look at. But there’s, you know, there’s some in the Microsoft Office 365 environment. There’s a lot of freestanding ones out there.

Opening it up to any other questions.

Any recommendations on how to do the review? Again, you know, you set your KR, it’s an aggressive goal. Then you have to present the results and then you have to present sort of like why we got there, like any sort of like best practices. Again, back to that fragmentation, I think part of the reason why we go down to the initiative level, so we understand what we said we were going to work on that may or may not have worked in order to get to the result.

So absent of that, like what have you seen really work in terms of, from my perspective, again, and this is now across a number of companies, the biggest challenge that I’ve seen is really the buy- in that we’re just not telling people to just go through this process that, you know, in some places is burdensome. And then at the end of the day, the results are the result. And it’s like, all right, fine. Like, yes, yes or no. You stand in front of me and tell me the OKR results again. But what are the best practices?

Because that’s the thing that I continue to see across multiple companies, like that buy- in when you’re looking at the results and how do we cohesively work together towards that result.

Well, there’s two stages to it. One is, how have you written the OKR in the first place? And then how are you doing the check- in? So I think if I’m supposed to be checking in on something I had no influence on, I’m probably gonna feel less engaged, right? It’s like, you know, this isn’t my OKR. I don’t really care about it. Like, let me get out of this meeting and get back to work, you know?

So I think, you know, really encouraging collaboration as much as possible in the writing of them because you’re gonna get more commitment because people feel engaged to it. And then again, I think what I said about the check- ins that we’re not just looking at the data and the project status going into it, but there’s actually some room for saying like, I’m not sure I get this, right? I don’t get why this is important, is really important.

And I mean, the teams I’ve seen do the best with this have done the cultural work to be really open with each other and willing to get into a debate, willing to get into a conflict, being willing to challenge the team leader about something. So that’s not really been the subject we’ve been talking about today, but I think that kind of work is really important. Anyway, I hope that helps.

Yeah, it helps, it helps. Any sort of, again, best practices in defining the KR in a way that feels collaborative? The actual like KR, like the number, and I’m mostly speaking at a company level, right? Because I think team stuff, I think is very different, but if you’re presenting the general company KR, like how have you seen sort of like the best, the companies that have done it the best, like how have they gone over the challenge of naturally feeling sort of top- down just because we only have but so many hours in a day?

Well, I think it’s part of it is being willing to like really step back and go like, okay, what would really need to be true for 90 days from now to tell us we’re on track with this objective and to be willing to have that conversation without getting hung up on what your existing data is? Because often it’s like, look, we really need to measure, we really need to measure how people are feeling about this product and we can’t like run another fricking survey, right? Everybody’s surveyed out. So what would actually tell us that?

And often people are kind of impatient with that sort of discussion. So I think inviting that, even if the KR is, we have to figure out how we’re gonna measure this and that’s gonna take a month. So we’re gonna have a short- term KR to do that and move on. But I think it’s that people really understand how the KR really contributes to the objective. Like it has to feel relevant.

I see Nick, you had a question if you wanna chime in.

Yeah, you know, about 50% of people will hear that an early stage startup is looking at adopting OKRs and they’ll roll their eyes and say, oh, that’s too much process. I wanna know if you have a perspective on if there is a size or a stage or other characteristics that make a startup a bad fit for OKRs.

Yeah, I mean, I had one example early in the year. So these were people developing a product in the blockchain space. And we talked about OKRs and went around in circles on it for about a month. And they finally realized, we actually need to just create a minimum viable product to even get into the conversation with our investors and actually test it. So that’s the only thing we really have to do right now. It’s the only thing we can do right now. And so they respectfully said, we’re not ready for OKRs.

I think beyond that, companies that like, you’re just not sure what your product market fit is yet, it gets really hard to use OKRs. I mean, you can, because you’re using them for experiments and people do use OKRs for that. But I think it’s a little bit different because we’ve got a hypothesis and we’re gonna test it. And OKRs, it just may feel like it takes too long to come up with OKRs and do that. If you can be very clear on the experiment you need to run, what’s gonna tell you that it was successful, then maybe you need to focus on that.

Thank you.

So I don’t believe OKRs are the, they’re not the end all and be all for everybody all the time by any means. That’s perfect.

We still have time for one more question. If you have one, we’re also putting up the poll for the feedback for this session, if you guys wanna take a second to fill that out. But if anyone else has one more question for Daniel, we still have time. All right. If not, thank you everyone for joining. We hope you have a wonderful holiday and then we’ll be back tomorrow.