The Startup OKR Guide
Seven Lessons from a year of using OKRs to drive results at Afrocenchix
What does every startup want? A focused, motivated team that consistently succeeds in reaching objectives. A simple aim. So why is achieving that so hard?
Well, whilst research has made clear that commitment to a specific, ambitious goal improves team performance and engagement, it can be hard to determine exactly what those goals should be. Enter OKRs.
OKRs are as method for management by objective. The methodology involves outlining core objectives to work towards and deciding on the key results that will get you there. Done correctly OKRs will boost your team’s focus, clarity and drive. We’ve been using the OKR system at Afrocenchix since early 2019 and, amongst other things, OKRs have helped us to:
- 3x our in-house production capacity with the use of new tools and machinery
- Grow our customer base by over 256% in 12 months
- 17x our year on year online sales from June 2019 to June 2020
OKRs are a powerful system.
When we first heard of OKRs through Sharmadean Reid MBE’s article on making them work for Beauty Stack, we immediately wanted to adopt them. We read Measure What Matters and searched everywhere for resources on small startups applying the methodology, but came away with little.
As we slowly figured out how to make it work for our team of 4, then 6, then 8, I started penning the guide I wish we could have had.
Then I decided not to finish writing this. We still have much to learn, especially around using OKRs for performance reviews and I don’t hit my KRs every cycle, so I didn’t feel qualified. That changed recently.
In August we were selected from hundreds of founders for the Google For Startups Immersion Black Founders Programme. During kickoff week we had a training session with the incredibly focused LJ Erwin, Chief of Staff at YouTube. In the workshop segment, my group facilitator joked that I should run the next session as she couldn’t find anything to change in our OKR system. That session, combined with the numerous questions around OKRs I’ve been asked by other founders, showed me that this OKR guide needed to be finished. (Thanks Marta!)We learnt the hard way what does and does not work and sharing our lessons could help others to avoid the struggles we’ve faced.
This startup OKR guide will introduce OKRs and take you through the process I designed to set and track our OKRs.
What exactly are OKRs?
Put simply, Objectives are where you’re going, Key Results are how you’ll get there. The whole approach is guided by your why; the purpose for which your startup exists.
What are Objectives for OKRs?
Objectives are ‘big, hairy audacious goals’, they should be ambitious and may even feel outlandish.
Objectives are most helpful when:
- you phrase them in a manner that conveys finality or a finish line.
- you avoid ambiguity by using clear language that even an outsider could easily understand.
- you make clear whether they are aspirational (north stars you never quite expect to reach) or committed (goals that you absolute expect to achieve.) A combination of the two is helpful. Confusion over whether a goal is aspirational or not, is unhelpful.
O1: Serve 40,000 Returning Customers This Quarter (Committed)
O2: Increase Access to our Safe, Effective Products & Education (Aspirational)
What are Key Results for OKRs?
Key results should be SMART with sass: specific, measurable, aggressive, realistic and timebound. They’re not task lists or action plans, they’re the metrics that show you you’ve achieved your objective, or at least taken a significant leap towards it. KRs need to be easily graded on a scale of 0–1.0 where 0.6–0.7 is very good.
Key results are most helpful when:
- you describe outcomes or impact rather than activities.
- each team member ensures evidence of completion is easily accessible and preferably records it with the OKR outcome.
Examples of KRs using the above Objectives:
O1: Serve 40,000 Returning Customers (Committed)
KR: Report on customer satisfaction levels by Jan 1st 2021
KR: Increase customer retention by 15% over the quarter
O2: Increase Access to our Safe, Effective Products & Education (Aspirational)
KR: Run YouTube ads on 5 videos to accompany our top ranked blog posts by Nov 30th 2020
KR: Increase organic traffic by 20% by Jan 30th 2021
How to start using OKRs for your startup
Now you know the basics to get you started. Passing on this info to your team is just the beginning.
Decide how you will implement OKRs to make them work for your unique situation, then guide the process. It’s not enough to introduce OKRs and bounce. Society doesn’t always encourage (or train us for) deep, strategic thought. In a busy and easily distracted ecosystem, we all need help to focus our minds. Support your team in being their best by leading them through structured OKR planning workshops.
Setting OKRs — The Afrocenchix Process
We operate on a quarterly OKR cycle and have a simple 3 part overlapping process. Before we even got to this stage, we had to introduce OKRs and train the team.
Using a simple presentation to outline essentially what I’ve shared above, we’ve able to get our team and all new starters up to speed within a quarter or so. As well as making a short deck to explain OKRs and the way your startup will implement them, I’d recommend watching Start with Why together and discussing your ‘why’ as an organisation. Keeping your ‘why’ at the forefront of your planning will help you to focus and motivate yourself and your team.
So how do those 3 stages work is practice? Let’s explore them one by one.
Research shows that he more ideas we generate, the better they become — Lucas, B. J., & Nordgren, L. F. (2015).
We kick off each OKR cycle with a guided brainstorming session around 3 weeks before the cycle begins. During our OKR brainstorming session, we begin to draft OKRs for the quarter ahead. We work individually and collaboratively as a group to polish our individual OKRs. We remind the team that OKRs are about focus, pushing ourselves for the sake of our purpose and learning from the experience.
This is a no tech session, everyone has paper and coloured pens (to help bring order to chaos) and we individually write down every idea we can think of under the objective we’ve chosen from the 3–4 company objectives. The work, of course, starts before this. You have to determine the objectives your team will use to set their KRs. I recommend reading Measure What Matters for guidance on this.
Brainstorming works best when done individually and then shared, collaborative brainstorming is one of the worst ways to generate useful ideas (Thinking Fast & Slow and Mindware are good books to read further about the importance of individual brainstorming.)
Using pen and paper, we write down ideas for the aspirational objective first. After a break, we code the ideas into categories based on what makes sense to each of us, then rank the categories in order of importance. Finally we write a sentence to explain why each received the ranking it did. Now we have a few initial ideas, the seeds from which our KRs will grow.
The top ideas generated through this structured brainstorming session are shared, then we each conduct a SWOT analysis to shortlist which ideas to take forward.
Remember to take breaks between activities! This work is simple, but it’s hard.
The shortlist is further refined through guided strategic thinking. Encourage your team to outline the impact of their tops ideas then to list the resources they may need. Resources could include:
- Help from other team members
- External help: e.g. contractors, creatives, engineers, photographers, models
- Protected deep work sessions
- Lab time
Ensure your team write down everything they’ll need for each idea. Some ideas will have been eliminated by virtue of their lack of significant impact or onerous requirements. The latter type of discarded ideas should be recorded for a future quarter, and the groundwork that will make those tasks possible (setting aside budget, finding the right videographer) could become KRs for this quarter.
Next, our team takes their shortlist, starts to form the ideas into the OKR structure and begins to think about dates.
Every KR needs a deadline or frequency. We gauge the time it will take, then check our calendars. We’ve learnt it’s essential to look at what else is happening in the quarter and around the proposed deadline. Your idea may be to get more people to the website. You have a small budget so it can’t be through ads, but your SEO position is strong so you want to build on that and do it organically. Perhaps last quarter you managed a 12% increase of organic traffic and you want to stretch yourself. So the KR is crafted into ‘Increase organic traffic by 20% by …’ by when?
Well you figure it will take 7 hours of deep work and 10 SEO focused articles written by other team members. You could get this done by Jan 15th… except for Christmas, a company event that will require most of the team and a few days of annual leave you have planned. This would suggest a more sensible deadline would be Jan 30th 2021
When guiding your team through the process, ensure deadlines are realistic, reasonable & not stress inducing! Ensure the chosen idea is one team members can get done when they plan to. Three months goes by faster than you first expect.
By this stage each team member should have 3–4 specific, measurable, aggressive, realistic, timebound KR drafts for a single objective. Give clear instructions and a deadline to get the rest of them planned. For each objective that is relevant to their role, your team members should have 3–4 key results.
When setting the deadline for your team to continue the work for each objective, remind them to write out their final draft KRs into a shared spreadsheet for the quarter or the OKR tracking tool of your choice (we trialed notion, Coda & Trello as our tool to communicate, measure, and achieve OKRs and found that a humble Google sheet worked best for us.” More suggestions at the end of this guide.) All company objectives (in our case set by the founders) should be visible on this shared spreadsheet (or piece of software) and tabs should be created for every member of the team, including the founders. Radical transparency is the goal.
We use the above workshop session to draft OKRs together but also independently do the work needed to brainstorm, analyse and strategise, then we collectively critique the ideas to bring the best out of our team. Organised this way OKRs help us to focus, push ourselves towards bigger goals than we’d thought possible and to learn from the experience.
Many of your team members will be able to do this independently after you’ve modeled it. Still schedule in the time and do it together. Thinking and strategising are often what gets squeezed in a busy, overstretched startup. Protect this time.
The next session to schedule should be about a week before the quarter begins. Each team member should read out their OKRs (already drafted, redrafted and checked over with a line manager during 1:1s) and state their dependencies i.e. who do they need onboard to make this happen.
During this session, any issues or oversights can be raised and OKRs finalised. We found these meetings took over an hour for the first three quarters then settled into 10–15 minutes, despite our team growing, as we all got better at the system. Once your OKRs are finalised, encourage everyone to schedule in the time to work on them and set deadline reminders straightaway.
Starting new hires in the middle of an OKR cycle seems to work better than trying to bring them in at the start of one, as they can learn on the job from their fellow team members and take part in a session where they benefit from peer guidance. There’s enough to learn at the start of a new role without having to wrap your head around OKRs and set them within your first few weeks.
At Afrocenchix, OKRs are public so that everyone in the organisation can see what others are working on, but they’re not just responsibilities as outlined on a job descriptions, and they’re not just a shared to do list (we use Trello for that!) The communication continues throughout the quarter, we discuss OKRs in 1:1s, our OKR Champion (more on this later) checks in periodically and we can all see at a glance where everyone is and ask questions when needed.
3. Reflect & Score
We score our objectives on the aforementioned shared Google sheet and a few weeks after the quarter ends, everyone schedules a time to speak with their line manager about their progress and score their OKRs. We initially did this in the last two weeks of the quarter but found it was a distraction to actually getting the present OKRs running, so we focus on the present or future and dip into the past only once the current OKRs are in motion. This means that scoring OKRs is more reflective, a learning exercise that offers motivation and ideas to make the OKRs at hand a success.
When we score, we encourage each team member to continue to take ownership. Everyone writes down notes next to their OKRs on how the quarter went, what they learnt from the experience and what they could do to improve in future. They then note down whether objectives were met, missed or surpassed and provide evidence in the form of the specified metrics.
The aim for an OKR grade is 0.6–0.7. A 1 should be rare and a cause to celebrate. A sheet of 1s suggests the OKRs were too easy. 0–0.3 should equally be rare. A sheet full of 0s suggests you need to spend more time on the brainstorming workshops. Scores are data which should help to improve our approach to the OKRs at hand, they are not sneaky evaluations of team members.
7 Tips for making OKRs work for your startup
- Simple Systems Stick
Don’t overcook it. As I mentioned, we looked at Monday, Coda, Asana, Trello and other tools but in the end we wanted the team to focus on learning and applying the methodology, not using a new tool. We kept it simple and used a basic Google drive sheet and it’s working well at Afrocenchix.
- Prepare a Process Give yourself the time to adapt the OKR process to your organisation. I recommend writing up a process document, creating an OKR introductory/training/workshop deck and writing a one pager to explain what OKRs are and why you’re implementing them before you introduce them to your team. Creating the documentation will help you to clarify your thinking around the methodology and you’ll be ahead of the game when it comes to training/OKR setting workshops. Feel free to borrow our approach – it’s the strategic goals that matter, not the way they’re set and communicated.
- Train Your Team
It’s your job to set the roadmap. When we started, I scheduled in blocks of time to create a process doc and I used beautiful.ai to make a training deck for our team. The images in this guide are taken straight from my OKR deck. I was keen on bringing everyone onboard as soon as possible and at the same time I wanted to ensure that the process was clear so nobody one would be put off by confusion or any other OKR related stress inducing shambles. We wanted our team involved in every stage of setting their KRs to ensure the had the autonomy needed to stay motivated.
- Collaboration is Crucial
Even though much of the work is individual, we’ve learnt it’s important to set, tweak and score OKRs in groups or pairs. This important but not urgent type work is exactly what gets pushed off of everyone’s agenda unless you work hard to ensure it happens.
- Do Delegate!
It’s incredibly difficult to manage OKR, set objectives, line manage, run your business, raise investment, meet your own OKRs and do all the other things you have to do as a founder or director, whilst also staying on top of OKR cycle organisation.
I solved this problem by asking our wonderful employee #1 to be our OKR Champion. This means she schedules in the brainstorming and OKR sharing sessions, reminds everyone about where we are in the cycle and generally battles against the entropy that threatens to dismantle the entire system. If you can split out the organisation, strategising and even the training then I’d recommend that you do.
Tools like Loom allow you to record training and we often store training sessions on a Trello board ready for new starters.
- Future First & Present over Past
When you set next quarter’s objectives, keep focused on them and get started with the new quarter before scoring and discussing the last one. The scoring process is about learning, not assessing performance. The data of OKR scores is only useful in informing the kinds of OKRs you should set and the approach you should take if you want to succeed. Your metrics should be updated throughout the quarter, so you’ll know roughly whether you hit that 20% increase goal or not before you score. When you score and do the final data check, you want to make sure the reflection is future focused, that discussions in 1:1s are about how to ensure this quarter is better than the last. If your direct report succeeded in an OKR, ask why? If they failed it, ask how? Then encourage them to tweak current OKRs based on the learnings and not to look at last quarters OKRs again.
- Refresh Resources
Every quarter I refresh the deck with new resources, articles and improved activities and ensure the training/refresher and workshop is still the best it can be. Keep it fresh to keep everyone engaged.
Having clear objectives and key results set collaboratively, not only clarifies your purpose, but it keeps you focused. A focused team is able to achieve the mastery needed to excel in solving the problem your startup exists to fix. Good luck! You’ve got this.
Resources to help implement OKRs in a startup
- Measure What Matters — John Doerr
- High Output Management — Andrew S. Grove
- Deep Work — Cal Newport
- Thinking, Fast and Slow — David Kahneman
- Mindware — Richard Nisbett
- Coda OKR template
- Notion OKR template
- I use a simple Google Sheet which I may share as a template if it would be helpful.
Helpful Articles for Making OKRs Work for a Startup