To rapidly create objectives in line with the initiatives underway and primary goals of the region/business unit as they relate to the broader business goals.

These objectives exist for us to align our initiatives across the period, ensure we are understanding what works and what doesn’t, report on the results in a more objective fashion, and quickly learn from what we do.

Objective and Key Result Preparation Session

• 20 minutes: Focus Areas
• 15 minutes: Targetted Metrics
• 10 minutes: Creating Objectives

TL:DR

To create the OKRs we do an exercise where we:

1. list out all the focus areas, concerns, and initiatives everyone was thinking about
2. list all the KPIs and leading indicators we think are relevant and have an impact on revenue (the most important KPI for GTM-D)
3. Create 3 objectives that gathered the focuses together and linked them to the metrics we want to affect
4. Extend those objectives and metrics to individual teams inside the business unit
5. Determine historical performance of the metrics and create key results based on improving those metrics

Definitions

Objective

Memorable qualitative descriptions of what you want to achieve. Objectives should be short, inspirational and engaging. An Objective should motivate and challenge the team.

Key Result

Set of metrics that measure your progress towards the Objective. For each Objective, you should have a set of 2 to 5 Key Results. More than that and no one will remember them.

Initiative

a specific project that serves to bring us closer to achieving the objective and which in its execution will improve or deliver against a key result.

Related Links

OKR Delivery Process

Step 1 - Focus Areas

Start with the high level focusses from each manager - what are the most important themes for them in the coming period? Examples of this can include:

• Increase awareness

• Higher productivity

• More platform stability

• Employee happiness/retention/development

From there the discussion moves to what sort of projects, ideas, and initiatives the team has in mind, categorising them by theme. These are not necessarily fully formed projects - the goal is to quickly get ideas down to get the teams aligned and beginning to see the common themes across each.

An example of the output of step one taking the theme of Efficiency/Effectiveness across Sales, Business Development, Channel Partnership and Marketing teams

Step 2 - Targetted Metrics

Example metrics ordered by their impact on the primary metric

Start by defining the one or two most important metrics for the business unit. This will be some version of one or more of the following:

1. Increase Revenue

2. Decrease Cost

3. Decrease Risk

For example - a go to market team may well take Increase Revenue as the single most important metric. A product team may have a mix - creating new features that increase client adoption (revenue), building them efficiently (decrease cost), with a limited number of bugs (decrease risk).

Once the themes and initiatives have been recorded put them aside for the next 15 minutes. The conversation pivots to metrics - what numbers do each team consider to be important? How do they judge their own success on a daily, weekly, and monthly basis?

Record these metrics and number them by the order that and impact with which they impact the primary metric as a leading indicator. If a metric doesn’t fit the definition of a leading indicator it probably shouldn’t be something we focus on!

Leading Indicator (LI): any addressable and measurable metric of interest that predicts a change in the primary metric

To continue the example of the go to market team above:

Primary metric: Revenue

First leading indicator: Pipeline Generated (an increase in pipeline demonstrably leads to an increase in revenue)

Second order leading indicator: Win Rate (an increase in win rate means more pipeline turns into revenue, but is useless without the pipeline to win!)

Step 3 - Creating Objectives

Each business unit or group of business units should have 3-4 objectives. In order to create these objectives, take the metrics and start to group them by the themes we created in the first step. An easy way to do this is to ask the question:

Which metric would change if we completed these initiatives? What metric are we trying to improve with this focus area?

Continuing the above example - the go to market team has identified that getting more efficient is important. By improving the average order value, the win rate, and the qualification rate (the ratio of meetings with prospective clients to created sales opportunities) the team is able to deliver more revenue with the same amount of work being done today and so these metrics are clustered together.

In general most of the initiatives under the efficiency theme are all things that by completing would improve the metrics listed - this gives us a head start on creating projects to work on during the coming period.

The last step is to design the objective. As a result of the work done above this becomes very straight-foward - the teams are on the same page and the question becomes:

What describes the state of the business/business unit if these metrics are improved in line with the focus/theme they are tied to? What is the overall objective of all of this work?

Our go to market team comes directly to the conclusion that the objective for the period is to improve the quality of the opportunities coming to the sales teams. Repeat for each cluster of themes and metrics until you’ve got 3-4 objectives agreed upon across the teams.

Next Steps

Team Level Objectives

With the objectives created the metrics and themes are a small step away from becoming the key results and the initiatives, able to be expressed in a standard OKR format:

Objective: Improve the quality of opportunities across all lead sources

Key Result 1: Increase pipeline generated per quarter from £XXX,XXX to £XXX,XXX

Key Result 2: Increase number of qualified meetings (inbound and outbound) from XXX to XXX

Key Result 3: Increase AOV from £X,XXX to £X,XXX

Example Initiative: Complete win/loss analysis to create targetted vertical messaging (targets the number of qualified meetings metric)

If this exercise has been completed for a group of business units (as in the go to market team in the examples used) then the next step is for each unit inside of the group to derive their individual objectives from the broader ones defined here. This is done by taking the metrics associated with each objective and asking the managers of each team:

Which of these metrics does you team have control over?

For example, an objective may be “Streamline the consideration and buying process for both customer and internal stakeholders” and the related metrics things like:

• Time to Close

• # of Referrals

• # of Touchpoints to Close

• Partner Time to Productivity

• Inbound Meeting Requests

• # of Marketing Sourced Leads

• # Partner Referrals

A business development team leader may point out a set and/or subset of those metrics that their team has control over and cluster them under the objective “Develop and implement a more efficient multi-touch/disciplinary outreach strategy” - an objective that in its achievement will move the goal of streamlining the buying process forward.

Once again the metrics used to derive the objective serve as a jumping off point to define the key results.

Establishing Historical Performance and Key Results

Almost there! The last step is to define the key results and assign numbers to them. Choose 3-5 metrics that have been identified as having an impact on the objective and whose improvement would indicate the success of the objective. If available take the historical performance of that metric and agree on where that number should be to have the most impact on the primary metric by the end of the period.

This will naturally fall into a sentence like the following:

In order to increase revenue (primary metric/outcome) we will improve opportunity quality across all of our lead sources (objective) - to improve quality we need to increase pipeline generated by 10% over last half’s number (key result).

Now that the full OKR is set each potential initiative over the period can be tested with a basic question:

Does this initiative improve a key result and thereby deliver on an objective that increases the primary metric?

If the answer is yes - plan and schedule the project! If no then it isn’t the right time for it.