Why every early-stage company should implement OKRs immediately
Chase is an entrepreneur and consultant cultivating purpose and awareness at work. He is the founder of Chase Damiano, LLC. Tapping into his experiences in management consulting and building an eight-figure start-up from the ground up, Chase’s helped 300+ entrepreneurs and early-stage team members solve challenges of alignment, clarity, and communication. His clients, after tackling these challenges, experience stronger year-over-year growth, higher profitability, stronger employee engagement, and the founder(s) get out of the weeds and get their lives back. In this Voices of OKR piece Chase explains why OKRs are especially beneficial for startups.
Your to-do list is never-ending. You face pressures from investors, and as you add more people to the company – a good thing! – communication across the organization inevitably becomes more complex and harder to align. What’s the overarching goal? What does your work mean in the big picture? Even more, how does your team or department’s work fit into the company’s purpose? For many employees – and for that matter, many leaders – these are pretty common questions.
Leaving them unanswered doesn’t do any favors for your company, its growth, or your team’s investment or performance. In fact, it can be detrimental. Every team member needs to know what their work is going towards, and for early-stage companies, that’s particularly true. Since small companies are often under-resourced, both in capital and in bandwidth, it’s especially important to ensure all resources are allocated strategically, in order to maximize your ROI.
This is where OKRs come in to save the day. The power of clarification they provide is especially beneficial for startups, where the big picture, and definitions of real progress, can easily get lost in the chaos of the day-to-day.
What are OKRs?
A brief refresher…
OKRs are a goal-setting framework for organizations. The OKR framework has two parts: (1) Objectives, or what you want to achieve, and (2) Key Results, which capture how you know when you’ve achieved your objectives. Essentially, OKRs help you clarify where you’re going, and what it looks like when you get there. By unifying teams around their top priorities, OKRs provide effective direction on how to accomplish them.
Here’s an example:
Teams should aim for two to three objectives per quarter, and they should be specific, time-bound, and measurable. Each objective should have three to five key results, which should be impartial, quantitative, or Boolean measurements of the objectives. You can have more than three objectives and more than five key results. But the more you have, the harder it is to focus on what is truly important. Not all objectives and key results are weighted equally, and when the list gets too long, objectives that could be accomplished can crowd out those that must be.
Why OKRs are useful for early-stage companies
There are three big-picture ways OKRs serve startups:
1. OKRs add a lightweight, flexible structure in place of the startup chaos.
Many startups can seem like a free-for-all, with no rituals or routines. Oftentimes, it’s a struggle to articulate goals and strategic intent in an organized fashion. OKRs help provide the needed organization, in part by shifting the focus from daily tasks to broader outcomes. This helps give everyone a sense of traction on the seemingly infinite to-do list.
Not everything going on at a startup is strategically relevant. But as a clear process and framework for articulation, OKRs help clarify those things that are by forcing focus on fewer options.
2. OKRs keep teams in alignment.
OKRs contextualize why certain goals are in vogue, and help everyone on the team understand the specific aim of their activities. What’s more, OKRs can be scored, which gives you more data on what the team can handle during a specific time period.
They also help cultivate awareness around goal setting, which better manages team capacity. With OKRs, you can get early-stage team members involved in the strategic decision-making process. Many first employees are the leaders you must rely on to drive ever-higher strategic outcomes and take on ever-more responsibility. Getting them involved early is a necessary investment to prepare them for leadership positions.
In this respect, OKRs are also great for remote teams. They keep the team transparent, allowing any team member to see the OKRs for not only themself, but also for their other team members, their department, and the entire company. Centralizing this information helps everyone see a bigger picture—which especially helps in distributed environments where there’s no office water cooler or bullpen.
3. OKRs help create efficiencies.
Meetings are the bear of most startups’ existences. OKRs clarify and create structure around specific priorities, which helps reduce extra back-and-forth communications. When everyone is clear on the outcomes to be accomplished, and who will accomplish them, this reduces meeting times and ad-hoc Slack questions and follow-ups (“Hey, got time for a 5 minute phone call?”). All of which eliminates a lot of overhead.
Finally, the efficiencies introduced by OKRs adds context for high-quality contractors. The best contractors can take your goals – as spelled out in your OKRs – and make them happen, in their own unique flavor (i.e. marketing, HR/recruitment, finance, etc.).
The Objectives and Key Results framework provides a focused and outcome-driven structure over the chaos of a startup’s early life. OKRs spell out explicitly and transparently precisely what teams should aim for and prioritize in their day-to-day. They therefore increase alignment and cut down on superfluous back-and-forths (which is especially useful for distributed teams). And this helps everyone – including contractors – get right to their most productive work.
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