Using Okr Strategy For Success In Business
By Shailendra Mishra
Young entrepreneurs comprise 70% of the population in India. To provide them with better guidance for their skill-development, an idea struck me. A few of my college friends and I collaborated to work on this idea and Designcut was born.
Designcut provides professional training and workshops in robotics and programming and develops innovative products in conjunction with a few subsidiary companies. Designcut also collaborates with schools and colleges to administer various training programs in technical fields. We also provide training to individual students interested in learning about deep learning, data analysis, robotics, automobile and IC engine type technical topics.
Designcut has two subsidiary firms: Samvaadam and The Engineer’s Shop. Samvaadam is a talk show that brings together like-minded, young and budding entrepreneurs to share their engaging stories and inspire others to pursue their dreams and aspirations. The Engineer’s Shop is an online app that sells and delivers electronic components for projects to build drone, robotics projects, deep learning integrated robotics, electric vehicles, RPA (Robotic Process Automation) and DIY projects such as student racing cars. It offers the best available price, quick delivery and product reliability.
Our entrepreneurial journey didn’t start smoothly. Like every startup, we had to find our identity, our own space and our own work ethics. In the beginning, we were lacking the proper systems to track our progress. For instance, we didn’t keep track of the number of people who attended our first few events. There was no strategy in place, no feedback or suggestions could be given to the marketing team to gauge our performance.
This had to change. We then started employing the ‘Objective and Key Results Strategy’ or OKR. OKR is the tool behind Google’s astronomical growth. It is used to track progress as teams move towards achieving objectives that are ambitious and in alignment with the entire organization.
The first thing we had to do was to establish an objective, which was to increase the turnout at our events. In order to do this we established certain key results. To help with this, the marketing department was asked to leave a specific number of impressions across our social media channels to reach a certain amount of people. Once these two key results were achieved, we evaluated the difference it made to our objective of increasing the turn out.
“In our experience, the three essential components, which make every organization growth oriented, are accountability, transparency and the streamlining of goals.” #TheGrowthHackingBook #GrowthHackingMovement #GrowthHackingDay”
For the next event, our turnout did go up, however not as much as we wanted it to. For the following events, our objective remained the same, though this time, we settled on more challenging key results. We doubled the amount of social media impressions and increased the amount of people to be reached. Even though our key results weren’t achieved in their totality, our objective was accomplished. This time, the relative increase in our turnout was way more than the initial increase in our turnout. Through all of this, an important lesson was learned. We learned the importance of OKR’s and how they helped us track our progress, align our business and move towards growth.
In our experience, the three essential components, which make every organization growth oriented, are: accountability, transparency and the streamlining of goals. At Designcut, we achieve these components by incorporating the Objective and Key Results (OKR strategy), formalized by John Doerr, who is one of the most successful venture capitalists of all time. He started his career at Intel and went on to invest in companies such as Google and Amazon.
Every individual in our organization sets their own objectives and subsequent key results within a specific time frame and every quarter, each individual presents their OKR reports to management.
This allows us to align our organization and make sure everyone is heading towards the same big picture goals. Every quarter gives us a chance to review and understand the individual and collective progress where an OKR grade is given. An ideal OKR grade would be somewhere between 60%-70%. A grade higher than this would tell us that our goals aren’t ambitious enough. OKRs work in a cyclical manner so low grades are used to refine the next OKRs.
Every employee sets their own Objective and Key Results and puts a plan in place to achieve them. This helps us to keep track of each employee and the organization’s progress. Every employee’s OKR is made available to everyone in the organization. This allows each employee to integrate their objective with each distinct department and work more coherently as a team. This team spirit not only increases efficiency but also evokes inspiration as they move together in order to achieve a common goal.
Setting OKRs has allowed us to have open communication and transparency with our organization’s goals and direction. It sets expectations amongst departments and employees to help increase accountability.
An important factor that should influence objectives is the prevailing conditions in a company’s environment. For instance, at Designcut, our objective is centered on youth. This is because India has the largest population of youth in the entire globe. This creates a perfect market for our products, which are directly related to technology. In addition, our company also anticipates the upcoming job market and requirements and keeps that in mind when establishing our objectives.
Our first objective was to expand our technical mentorship program to include more students in India and to grow as a company. In order to achieve our objectives, the key results were decided on. These included reaching more than 10,000 students and increasing revenue from Rs. 20,000 per month to Rs. 2 to 3 lakhs per month. As the key results are realized and our objective met, we could allow ourselves to be more ambitious and set higher objectives and new key results.
On an individual level, every employee is taught about the OKR strategy and its importance to our company as soon as they are recruited. They are then asked to come up with their own objective and respective key results. These are established in a way that directly helps the company’s OKRs. The alignment of goals in any organization depends on having a team focused on continuous growth. The only thing holding an organization together is their own perspective and the expectations they’ve set for the company.
A team’s vision could be different from the employer’s vision. To keep our employees motivated, aligned and dedicated, they’re given monthly incentives. The growth of a startup depends on the growth of the team, which means there should be incentives incorporated into the salary and the physical facilities. To conclude, we feel that our company’s growth is directly proportional to team growth.
Companies like Google and Intel also employ the OKR strategy. In order to make their key results measurable, Google uses a scale of 0 to 1.0. Other companies using OKRs include Uber and YouTube. Uber’s objective was to increase the number of drivers in their system. In order to achieve this objective, two observable and measurable key results were established: the first being to increase the driver base by 20% and the other being to increase driver average session to 26 hours/weekly in all active regions.
YouTube’s objective was to increase viewership minutes because a fixed percentage of time is devoted to ads. As the total viewing time goes up, so do revenues.
Objective: To Increase the Average Watch Time Per User
Key results: assuming we’ve been tracking the viewing time, it could be:
The first key result sets the metric goal to achieve the objective. Certainty is crucial to achieving the target and if the target is achieved easily then the goals weren’t challenging enough.
As demonstrated, OKRs can be useful for startups such as ours, as well as established companies like YouTube, Google and Uber. Many companies are now adopting the OKR methodology. Establishing and following through with OKRs can allow a company to rise to newer heights.