Goal setting for startups, smes, and enterprises - Expert top tips
The structure, success, and stages of rolling out goals can differ massively dependent on company size.
To help you get your goals in the best shape possible, we asked the experts their best practice tips for rolling out goals at startups, SMEs, and large enterprise organisations.
Cansel Sörgens, OKR Coach & Trainer
Only 20% of startups make it. The 3 main reasons are: no market need, run out of cash, lack of alignment. The biggest challenge of a startup is to find the “product market fit” as fast as possible. This requires a clear understanding of the needs of the target group and the value proposition. Secondly, it requires testing and validating ideas as quickly as possible, with least possible investment. Thirdly, the small company-size and the positive vibes in the “office” should not let you think that people are aligned. Alignment doesn’t happen automatically. It requires an inspiring vision, a clear strategy and focus, to channel all the efforts into the same direction. Through OKRs, luckily I was able to trigger all these conversations in the startups I worked with.
Most SMEs suffer from the pain of growing too fast before establishing the foundation. The technical depth has grown like a monster kept secret behind a closed door. Before you implement one framework after another, chase one change after another, you need to find ways that enable you to work smarter not harder. As a SME you probably want to make sure the rare capabilities work aligned towards one direction. OKRs can help you to figure out how to create alignment in such a scaled environment, create focus and make sure everyone channels their efforts towards shared goals. With principles such as "Stop starting, start finishing" and through outcome focused thinking you can drive business results with least effort. This way you optimise the flow and time to market. Sometimes it is better to slow down a little to get even faster later again.
The biggest problem of enterprises is inertia. They are busier with their internal processes than with customer and market needs. They haven’t talked to their customers in a long time. Their time to market is too high. Due to hundreds of regulations, processes and rules to be followed, they lose their skill of adaptability that is required in the 21st Century due to dynamically changing market needs. The sad thing is that most of the rules that slow the enterprises down, is just because a couple of employees have made a mistake here and there, that however did not harm the business at all, not even the slightest. If you have spent your working time filling out forms for travel expenses you know what I’m talking about. The enterprises should radically rethink their internal processes and rules. Turn their size into their advantage by decentralising and enabling autonomous networks (like small companies within a company) that have a clear distinguishing vision and own responsibilities of P&L.
Bart Den Haak, OKR Consultant & OKR Author
To keep OKRs Lean, use the following guidelines:
- Company size < 30 ppl. Use 1 OKR at company level
- Company size > 30 and < 900 ppl. Use 1 Company level OKRs and Team level OKRs
- Company size > 300 ppl. Use 1 Company level OKRs, Portfolio Value Stream Level and Team level OKRs
Allan Kelly, OKR Coach
Focus, which agile measures as work-in-progress (WIP). The more WIP you have the slower you will work. WIP clogs up the system and stalls delivery.
Startups are naturally constrained by resources - and time! - but are frequently searching for the right thing. It makes sense to try lots of things and quickly discard that which doesn’t fit. The faster you can do that the faster you can learn. I can imagine a startup running with short OKR cycles, say every six weeks, to speed up the learning process.
Corporations often seem to believe they can do everything and frequently load up with more than they can do. Because leadership is remote from the actual work they fail to appreciate how excessive WIP causes problems. Corporations need to resist the urge to have too many OKRs.
A bigger problem in corporations is that the temptation to link remuneration to OKR success seems is too great. Pay-for-OKRs undermines everything. It doesn’t seem to matter how many people say “Don’t do it!” they system demands metrics!
I wouldn’t like to generalise about SMEs!
Christina Lange, OKR Coach
For me, the success factors are independent of the size of the company: 1. true management buy-in, 2. at least one person who understands OKR and can inspire others, 3. a strategic context.
Felix Handler, OKR & Sustainability Coach
When is the best time to start with OKR (in a startup)? -> When you start working with measurements.
In the beginning you may have very direct contact with your customers and no metrics, because success shows in the conversations with them every day. But when you try to scale and have more than one customer to satisfy, you want clear ideas of what serves the majority of customers best (unless you are in the business in custom-products for everyone) or maybe have a metric that is interesting for potential investors. Cash-burn-rate and the impact of your time-and-money investments also are often not the most relevant aspects in the very beginning. Now you have numbers that are meaningful for your but try to deduce backwards from them: why are they meaningful? What needs to happen to make those meanings come true? E.g. You do not only want customers, you want happy customers that come back. Ideally they even tell others and that takes care of some parts of marketing already. That is when you start structuring your activities around outcome at scale - which is a very good point to start with OKR! It also helps with the initial point “how shall we start without a baseline” because you already have some numbers to build upon.
For enterprise organisations one of the biggest success factors is if the management can lead by example. So maybe try out OKR first on higher levels, before you involve everyone. Make practical experience so you can answer basic questions already from experience. What are you trying to learn as an organisation? What determines success for you besides numbers and money? How do you want to shape the path to more trust and self-organisation for your employees? Maybe already include them already in this discussion.
Make sure that you do not measure by 2 standards or frameworks at once (employees will figure that only one matters and will try to find out which one. If it is not OKR, you will stop it right in its tracks).
Carsten Ley, OKR Coach
For start–ups we can try OKR just with the founder teams to see if it works for them and then roll it out in a simple and easy manner.
For SMEs and enterprise organisations we need to look at the current goal / action tracking and culture and see how we can change that in order to implement OKRs.
For enterprise organisations we often see a dependency between goal / action tracking and yearly bonuses, therefore we need to take into consideration how to handle that before implementing OKRs, however we can try it with company level or a pilot team.
Nora Pfützenreuter, OKR Coach
In a small startup I would recommend to not split into functional groups when creating OKRs (at least not all the time), so you minimise the effort of aligning and everyone can directly see where the others are heading to with their OKRs, can identify dependencies and solve/ manage them.
Brett Knowles, Global OKR Coach & Consultant
Many of our clients fit into this category and we see several common challenges:
- Some small organisations think that because they don't have a fancy documented strategy slide deck that there is no strategy. in every case there is a strategy, but often it only exists in the founders heads and you need to capture it.
- Many organisations limit their thinking and only include objectives which they think are measurable. Don't do this. Your strategy is your strategy; figure out how you can measure it later (and if there is always a way to measure everything, even if you have to initially self-report (i.e. just Red/yellow/green) without any data)
- Remember to include both run-the-business (day-to-day operations) and change-the-business, otherwise you are excluding huge portions of your organisation from the OKR system.
- Good enough is good enough. You are better off having a mediocre set of objectives and key results and improve them while you're using them, then get caught in the academic and intellectual debate about but what a better objective or key result might be. If you cannot get your OKRs operational inside of 5 days you are overthinking them!
Walter G Ferrer, Transformation Expert
- Understand WHY doing OKRs make sense to you – it cannot be about some book or blog – understand the problem to solve and that is a variable among each of these buckets
- Focus on mindset, not method - it’s to refresh and empower the impact and influence of culture. Invest in training EARLY as part of the Preparation to plan the journey… then repeat
Tomek Dabrowski, OKR & Agile Coach
1. Keep it simple
OKRs should not overwhelm you. OKRs should help you steer your company. That’s why having fewer OKRs is better. Have max two, three yearly OKRs for a company and then two, three per team in every OKR cadence. Additionally, avoid having many levels of OKRs (i.e company -> department -> team -> individual). Less level you have, faster alignment inside an organisation. Try to have cross-departmental goals so people across your organisation share the same goal. It will reduce the number of OKRs and push people to collaborate between departments.
2. Learn the rhythm of working with OKRs instead of aiming for the perfect OKR.
John Doers said “Ideas are easy, execution is everything”. This sentence is so true. While the concept of the OKR sounds simple for the most, the tricky point is to make them work in an organisation. Start with an open drafting phase, where teams and employees can propose goals. The next, regular company-wide check-ins should be your new habit to succeed with the OKR roll-out. This is a space for you to align as a team and make a conscious decision based on the current data. Finally, share your insights and learnings during a public OKR grading meeting.
3. OKRs are not everything you do.
Before running you need to learn to walk. That’s why you need to take care of having a stable business at first. Defining a set of healthy metrics (aka KPI) and doing activities that keep them at a good enough level is the way to go. Only then you can start thinking about change, innovation or growth. Here comes OKRs that are a perfect fit for it. Last but not least, do not forget about legal and/or compliance projects too. So do not go blindly and put everything as OKR. It is normal to have other types of work.
4. Engage C-level team into OKRs.
If you want to succeed with OKR, the C-level team should use it as a tool to express strategy execution. They should live with OKRs, discuss openly and present progress at the company meetings. Automatically, if they live with OKRs, they will be engaged with the goal’s drafting. It will shorten the time needed for alignment. The C-level team is your change agent. Ideally, your OKR sponsor should come from this team.