OKRs for Startups: The goal-setting framework for entrepreneurs and startup teams

The new year is just around the corner, and it’s time to set your business goals and make some plans for the next 12 months. One methodology that can be pretty helpful here are OKRs.

Objectives and Key Results (OKRs) are a goal-setting framework that can be used by startups and companies of all sizes to establish clear, measurable goals and track progress towards achieving them.

Made famous first by Intel and is used by Google and countless of other successfull companies,  the framework consists of setting an objective, which is a high-level goal that teams or team members inside a company aim to achieve, and key results, which are specific, measurable metrics that will help determine if the objective has been achieved.

One of the benefits of using OKRs for startups is that they help align the efforts of an entire team towards a common goal. This can be especially important in the early stages of a startup, when the company is trying to establish itself in the market and build momentum. By setting clear, measurable goals and tracking progress towards achieving them, the team can stay focused and motivated, and startup founders are therefore able to make better decisions about where to allocate resources.

In addition to helping align the efforts of the team, OKRs can also help startups identify areas of growth and identify opportunities for innovation. By regularly reviewing key results and assessing progress towards achieving the objective, companies can identify areas where they are falling short and make adjustments to their strategy in order to achieve their goals.

The main point of OKRs is to switch from thinking about all the things you should do to thinking about what you should do to deliver valuable results.

Objectives are actionable goals that should focus on growth, innovation, or impactful changes. An Objective states what kind of areas you want your people to focus on and drive forward;

Key Results are the measurable outcomes that help you understand what the success of an Objective looks like. Key Results are not activities but rather the result you hope to see;

Initiatives are the main activities and ideas that your teams will execute to drive the Key Results forward.

5 Reasons why startups should use OKRs

1. Focus and alignment: OKRs can help startups stay focused on their most important goals and align the efforts of the entire team towards a common purpose. This can be especially important in the early stages of a startup, when the company is trying to establish itself in the market and build momentum.
2. Measurable progress: By setting clear, measurable key results, startups can track their progress towards achieving their objectives and make better decisions about where to allocate resources.
3. Opportunities for growth: By regularly reviewing key results and assessing progress towards achieving the objective, startups can identify areas where they are falling short and make adjustments to their strategy in order to achieve their goals.
4. Innovation: OKRs can help startups identify opportunities for innovation and encourage creative thinking and experimentation.
5. Accountability: By setting and regularly reviewing OKRs, startups can hold team members accountable for achieving their goals and ensure that everyone is working towards the same objectives. This can help drive progress and ensure that the company is moving in the right direction.

How to set OKRs for startups in 7 steps

Let’s get practical. Here are 7 steps for setting OKRs for startups:

1. Identify the company’s overall goals: Start by identifying the company’s overall goals and objectives. These should be high-level and ambitious, but also realistic and achievable. When thinking about OKRs, consider that they are ambitious enough that even if only 80% of each OKR will be reached in the end, that this would still be a good outcome.
2. Involve the team in the process: Involve key team members in the process of setting OKRs. This will help ensure that everyone is aligned and committed to achieving the objectives.
3. Set clear, measurable objectives: Understand your “North Star Metric” and make sure that the objectives are clear, measurable, and specific. This will help ensure that everyone understands what needs to be achieved and how progress will be tracked. As hinted in point 1, you want your objectives to be ambitious enough to push you and your team beyond your limits. This will help everyone to think about what’s truly needed to reach expectations.
4. Identify key results: For each objective, identify 3-6 key results that will help determine if the objective has been achieved. These should be specific, measurable metrics that will help track progress towards the objective.
5. Prioritize objectives: Prioritize the objectives based on their importance to the company’s overall strategy. This will help ensure that the team is focused on the most important goals.
6. Set deadlines: Set deadlines for achieving each objective and key result. This will help ensure that the team stays focused and motivated.
7. Regularly review and update: Make sure to regularly review and update OKRs to ensure that they are still relevant and aligned with the company’s overall strategy. This could be done quarterly, for example, and it ensures that each team is always working towards the most important goals and making progress.

Here is a real-life example of an OKR of an early-stage startup:

Objective: Launch a successful MVP (Minimum Viable Product)

• Key Result 1: We reach 1000 weekly avtive users within 8 weeks
• Key Result 2: We achieve an NPS score above 40 within 8 weeks
• Key Result 3: We secure our first 10 paying customers within 8 weeks

You’ll notice that the example above does not mention any features. Instead, the MVP OKRs focus on the impact that the successfull MVP launch should have. Keeping active users and satisfaction goals in mind enables you to build the right things.

How to track OKRs in your startup?

There are several ways to track OKRs in your startup. By using one or more of these methods, you can effectively track progress towards achieving your OKRs and make any necessary adjustments to your strategy.

1. Use a dedicated tool: There are several tools available specifically designed for tracking OKRs (for example: Perdoo). These tools allow you to set and track objectives and key results, and often provide features such as progress tracking, team collaboration, and reporting.
2. Use a spreadsheet: You can also use a spreadsheet to track OKRs. Simply create a sheet with columns for the objectives, key results, and progress made towards each key result.
3. Use a Kanban board: A Kanban board can also be used to track OKRs. Each objective can be represented as a column on the board, and key results can be represented as cards that are moved from left to right as progress is made.
4. Hold regular check-ins: Hold regular check-ins with team members to discuss progress towards achieving the OKRs. This can be done through one-on-one meetings, team meetings, or through regular status updates.
5. Use data and analytics: Use data and analytics to track progress towards achieving key results. This may involve collecting data on key metrics, such as website traffic or sales, and using it to track progress towards the objective.

Keys to Success

One of the keys to success with OKRs is to make sure they are challenging, but achievable. It is important to set ambitious goals, but they should also be somewhat realistic and attainable. By setting too easy of a goal, your team may not push itself to reach its full potential, but by setting a goal that is too difficult, your colleagues may become discouraged and demotivated.

To make sure OKRs are implemented properly in a company, it’s important to follow a few best practices:

1. Communicate the purpose and value of OKRs to the team: Make sure that everyone understands the purpose of OKRs and how they can help the company achieve its goals.
2. Set clear, measurable objectives and key results: Make sure that the objectives and key results are clear, measurable, and specific. This will help ensure that everyone understands what needs to be achieved and how progress will be tracked.
3. Align OKRs with the company’s overall strategy: Make sure that the OKRs support and align with the company’s overall strategy and mission. This will help ensure that the team is working towards the same goals.
4. Make OKRs transparent: Make sure that everyone has visibility into the OKRs and progress being made towards achieving them. This will help ensure that everyone is working towards the same goals and that there is transparency within the company.
5. Regularly review and update OKRs: Make sure to regularly review and update OKRs to ensure that they are still relevant and aligned with the company’s overall strategy.
6. Hold team members accountable: Make sure to hold team members accountable for achieving their OKRs and make sure they have the resources and support they need to succeed.

By following these best practices, you can help ensure that OKRs are implemented effectively in your company and help drive progress towards achieving your goals.

Resume & Final Thoughts

Overall, OKRs can be a powerful tool for startups looking to establish clear goals, track progress, and drive growth. It will take some time to implement the concept in your company and make sure everyone is up to speed, but it’s definitely worht it. By setting and regularly reviewing OKRs, startups can stay focused and motivated, and make better decisions about where to allocate resources.

One of the benefits of OKRs is that they are flexible and can be tailored to the specific needs and goals of the company. This means that they can be effective for startups, which often have more fluid and rapidly-changing goals, as well as for bigger companies, which may have more established and long-term objectives.

That being said, OKRs may be especially well-suited for startups, as they can help align the efforts of the team towards a common goal, track progress towards achieving objectives, and identify opportunities for growth and innovation. By setting and regularly reviewing OKRs, startups can stay focused and motivated, and make better decisions about where to allocate resources.

If you’re looking for further input on ‘all things OKR’, make sure to also check out the first and 2nd introductory posts about OKRs which were written by our contributor Bernardo Arnaud. Also, a book that is worth mentioning/reading when talking about OKRs is John Doerr’s bestseller “Measure What Matters”.

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