Implementing an effective OKR (Objectives and Key Results) practice for early-stage tech companies presents unique challenges that are distinct from those faced by larger, established businesses like Google or Intel – two of the most famous examples of effective OKR implementations.
In large organizations, OKRs typically tend to be metrics-focused and execution-oriented. But startups usually grapple with objectives centered around learning and product-market fit. The transition from a framework associated with mature, metric-driven businesses to the uncertainty of a startup environment can make OKRs feel “wrong” at a startup. However, the challenge isn’t with OKRs themselves: it’s how you construct them to serve the needs of the firm at its current maturity level. Another challenge is that early-stage companies lack the usage scale and data infrastructure necessary for heavily quantitative OKRs.
But neither of these means you shouldn’t use an OKR framework. In this post, I unpack a few rhetorical tricks to writing effective objective statements that support the unique challenges and opportunities at early-stage tech companies.
Focus on Value Delivery: Outcomes over Output
One of the biggest trip-ups is when teams write their objective statements that focus on outputs (things) rather than outcomes. If your objective reads something like, “Launch a new social media campaign”, step back and ask, “What problem are we trying to solve?” or playing “The Five Whys”. Reframe the objective around the value that you’re aiming to deliver. It makes your objective statements more effective because it focuses all the different functions on why they’re doing the work they’re doing – and gives the teams the latitude to adjust their tactics if their first choices aren’t successful.
For instance, “Improve word-of-mouth referrals by 20%” highlights the desired outcome of the social media campaign. It instantly communicates to peers outside the working group what the effort is supposed to do for the firm as a whole.
Tip for tech companies: if you come across a “launch,” “deliver,” or “build” in your objective statement, consider it a red flag indicating the need for a rewrite! What’s the launch supposed to do? Get more users? Make your users happier? Prevent fraud? That is your objective.
Learning Vs. Execution-based OKRs
Another relevant distinction is between learning or experimental OKRs versus tactical or execution-based OKRs. Learning OKRs are exploratory in nature, aimed at gathering knowledge. For instance, “Our goal is to understand the effort required to comply with GDPR” could be a learning objective for a US company preparing to enter the European market.
On the other hand, execution-based objectives are about concrete, measurable progress. They involve setting a specific goal and the steps to reach it. For example, “Our goal is to increase revenue by 20% by offering our product in the EU” is an execution-based OKR, focusing on a clear action plan and the desired revenue increase.
The choice between learning and execution-based objectives often depends on the stage of your company or project. In the early stages, you may lean more towards learning OKRs. However, as your initiative or company matures, the balance will typically shift towards the types of execution-based OKRs made famous by companies like Google.
Qualitative Vs. Quantitative Objectives
The final piece of the OKR puzzle is understanding when to use qualitative versus quantitative objectives. While quantitative objectives (“Increase word-of-mouth marketing referrals by 20%”) provide a clear metric for success, they aren’t always the right fit.
Qualitative objectives like “Our customers love us more than any of our competitors” can be powerful, especially in the early stages of a company. They may be more appropriate when dealing with subjective areas like brand perception, user experience, or employee satisfaction, where the quality of an outcome is as important, if not more so, than its quantity.
However, the trick with qualitative objectives is to ensure they are still actionable and aligned with your strategic goals. If you opt for a qualitative objective, make sure it’s something that can be influenced by actions and strategies and can contribute meaningfully to your business’s overall goals.
Conclusion
Startups benefit as much as larger companies from the focus provided by objective-based management. OKRs help align teams around shared goals, establish accountability, and give operational teams the autonomy to choose the “how” as long as they achieve the “what” and the “why”. Your OKRs will be more effective when you understand and leverage the characteristics unique to startups and innovation projects, rather than simply copying OKR practices from large, established companies.
Recommended reading
Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results by Christina Wodtke
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Ellen excels at product and UX.