Updated: Aug 22
Step 0: Learn About Agile Leadership
Before implementing OKRs, we learned a lot about how to be better leaders, made sure we had the right person in our leadership team, learned about cultivating an agile mindset, and got an OKR coach Dan Montgomery to help us implement OKRs. You can read more about Daniel Montgomery's approach to OKRs and strategy in his book "Start Less Finish More." You'll find his influence in this article since we first implemented OKRs under his guidance. We also highly recommend checking out the resources at https://www.whatmatters.com/, including the book "Measure What Matters" and "Google's OKR Playbook".
Step 1: Begin with a SWOT Analysis
Any strategic planning should start by understanding the current organizational landscape. A SWOT analysis – analyzing Strengths, Weaknesses, Opportunities, and Threats – provides this vital insight. One idea that we found confusing was strength vs. opportunities and weakness vs threat. Our understanding was that threats and opportunities are speculative, but that is not the right way to think about it. The model that Dan suggested is that strengths and weaknesses are internal that you can control, and Opportunities and threats are about the external environment. For example, you can't have a threat of quality decreasing with scale, but you can have a weakness that your delivery processes are not scalable.
Engage the leaders from the different business units to create separate SWOT analyses on the company.
Pool these insights together to build a multi-dimensional perspective giving you an understanding of positives and negatives from both an inward and outward view.
Use the SWOT to define the strategic priorities of the company.
Step 2: CEO Sets Direction
The CEO needs to set the vision for the company. They need to define clear and achievable top-level goals. The CEO will need to define numerical targets for the team. Please read this article to learn more about creating realistic goals for bookings. The SWOT analysis from the previous step provided 2-3 strategic priorities of the company. Make these strategic priorities actionable and accountable by encoding them into actionable OKRs.
The CEO shares a detailed numerical understanding of the company's targets and the various metrics the business units need to hit them.
The CEO also drafts 2-3 company-wide Objectives based on the team's learnings from the SWOT exercise.
The CEO creates measurable and meaningful KRs by back calculating from the targets. Use this article if you need help with the back calculations.
Step 3: Leaders and Team-Specific OKRs
Depending on the company size, you can create team OKRs. For a tech services company with the majority of staff responsible for delivering on customer projects, team OKRs don't make sense before 30 people. The leaders meet with their teams and draft OKRs in service of the company OKRs. Leaders should draft OKRs before they meet with the team. If they work very closely with another team, the two teams' leaders should align their draft OKRs before meeting with their teams.
Team leaders draft OKRs aligning with the company's vision with the consultation of their team.
The team leaders understand the capabilities and concerns of the team to finalize realistic commitments to leadership.
Step 4: Leadership Alignment Session
In the previous steps, we only drafted OKRs. The work was about creating a foundation and doing your homework. Next, the team has to get together to commit to the OKRs. The alignment and commitment must be done as a group activity to represent all groups in the decision.
The leadership team meets to discuss and finalize the OKRs. We recommend a two-day off-site for proper treatment of the subject.
The leaders identify potential overlaps, gaps, and conflicts in company and team OKRs, ensuring the organization moves in sync.
They define KRs that meet the higher organizational objectives.
Step 5: Regular Monitoring and Iteration
OKRs are not an end-of-the-quarter activity. OKRs should define your day-to-day work. As a leadership team, you need to discuss progress toward OKRs regularly.
The leadership team meets once a month.
They share progress towards KRs and initiatives launched in service of these KRs.
Coordinate with other leaders to get help and alignment.
Raise concerns about any KRs that don't apply anymore and check with other leaders to see if they can be changed or canceled.
With the steps in this article, you will define and execute your first set of OKRs. You will continue to iterate on this process and make it your own. In the process, you'll refine this process into a habit that works for your organization. But at the core of execution is your vision. For a tech services company, this means defining the problem you solve, who you solve it for, and how you solve it. Please check out our whitepaper "3 Reasons Why Growth Of Your Servicers Startup Is Slow" to learn how to develop a solid positioning to build your strategy around.