Staying productive as you grow is a common challenge for teams. Agile practices help a lot to make sure that your projects are delivered faster, but they don't guarantee that your team is working on the right initiatives. This is why goal-setting, and the Objective and Key Results (OKRs) framework in particular, are rapidly gaining in popularity - they provide an easy way to create a shared understanding of what matters for the business, and what the top priorities are.
However, it's often daunting to go from nothing to setting multi-level OKRs that are tracked religiously. Change management is hard, and there are multiple stages to pass in order to grow your outcome-driven muscle.
Stage 1: No shared goals
This is where you start, and while it might sound silly it's an extremely common place to be.
When you're early stage in a business it's hard to have a clearly defined view of where you want to be in 3, 6, 12 months. You're still figuring things out talking to as many customers as possible and trying to get a sense of what the market wants.
You might have a target for revenues and users but it's not broken down much further in metrics that each member of the team can relate to.
What are 5 signs that you're in stage 1?
- There are no goals beyond revenue and customer growth targets.
- There are no monthly and quarterly review of progress and impact.
- The roadmap is reactive, new projects are decided when the current ones are finished.
- Micro-management is needed to make progress. The team doesn't have enough understanding of the path forward to make their own decisions.
- The team feels disengaged from the product - people are checking-in to do the work decided by leadership.
Stage 2: We want goals
Even if you do not plan for stage 2 it's something that you'll get to eventually as your team grows. Past a certain size, it's not possible to keep having in-person discussions with everyone, and it's hard to keep up with the number of open questions about the future. You have more people moving together, and you need good ways to make sure they're going in the same direction.
You're just starting to think actively about your North Star and most of your effort will go into changing the culture to build more trust and become more data-driven.
What are 5 signs that you are in stage 2?
- You have some metrics beyond your sales and customer targets but they're mostly defined by leadership.
- You're covering key performance indicators (KPIs) like monthly active users (MAUs), conversion rates, customer acquisition costs (CAC), but you do not have goals that are driving improvements in specific aspects of your products.
- You follow the evolution of your KPIs but have not set targets for them yet.
- Progress is generally reviewed on a quarterly basis.
- The team has a shared understanding of the vitals of the business, but not everyone feels like they can have an impact.
Stage 3: We set goals
Okay, now we're getting to the stage where things start to scale in an exciting way. Stage 3 companies have teams running their own workshops to define how they'll measure success. There's a clear vision coming from the top that you can look up to understand how you can contribute to success.
There are still some hiccups when it comes to tracking goals and defining realistic targets but people can now work autonomously and report on outcomes to leadership.
5 signs you're at stage 3:
- You have a few people championing the concepts of SMART goals and OKRs.
- Leadership creates the vision but teams can define their own goals.
- Targets are set but there are some big misses due to goals being too ambitious.
- Goals are set before each quarter and written down in a shared doc or spreadsheet
- But, updates are sometimes missed, and you do not keep the progress history.
Stage 4: we track goal
At stage 4, your company is fully driven by outcome. Every team knows what their focus should be and they are able to self-evaluate to make hard calls on projects that are late or not delivering the impact expected.
This is when your company produces unexpected results as people are able to come up with innovative solutions to achieve a particular outcome. It's also when you can see a high engagement from the team as they become accountable for their own decisions.
5 signs you're at stage 4:
- Everyone is familiar with the concepts of KPIs, SMART goals and OKRs.
- Teams are able to design a set of goals to improve significantly a particular theme or aspect of their product ( expand customers, knowing our users, ecosystem integrations).
- Leadership can focus on longer-term goals (where they want to be in 2-3 years) and let teams define the right outcomes for each quarter.
- Progress is shared and monitored on a regular basis (weekly for quarterly goals, monthly for yearly plans).
- Historical data is kept and you can go back in time to understand how you got to where you are today.
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