Christina Wodtke’s latest book, “Radical Focus”, is probably the most valuable ‘business’ book which I’ve read thus far this year. The full title of the book reads “Radical Focus – Achieving Your Most Important Goals with Objectives and Key Results” and Wodtke provides a great story – literally – as well as useful tips about the importance of goal setting.
The book starts with a fable about a Silicon Valley startup, and offers a good narrative about how (not) to use of objectives and key results (‘OKRs’). This fable, which felt very close to the reality of being in startups – sets the scene for the practical tips that Wodtke offers with respect to using OKRs effectively, irrespective of whether you work in a startup or at Amazon. What are some of the most common reasons why key things don’t happen? Wodtke offers a number of insights here:
- No prioritisation or stack ranking of goals – Everything is deemed important and critical things don’t get done as a result.
- No obsessive and comprehensive communication of the goal – Wodtke suggests that for key goals to be achieved, it’s important to reiterate the goal daily and having regular commitment meetings, where the team talks about the key goal and commit to specific activities directly related to the goal.
- There’s no plan to get things done – Often, companies will have lofty goals but no plan or process to actually achieve these goals. Wodtke introduces a number of useful ceremonies which teams can use to keep goals relevant and top of mind: commitment meetings, check ins and celebrations.
- No or insufficient time carved for what really matters – Love how Wodtke refers to the “Eisenhower Box” which helps identify and prioritise those things that must be done (see Fig. 1 below).
- A tendency to give up instead of iterating – Business often give up at the first attempt, canning a goal if it isn’t achieved (fully) first time around. Instead, Wodtke urges, try to avoid a lack of followthrough by iterating constantly.
Fig. 1 – The Eisenhower Box
As the book title clearly suggests, Wodtke advocates the use of OKRs to achieve focus and making sure that key goals are being realised:
- Objectives are bold and qualitative – Set a bold, inspirational and qualitative Objective each quarter. Wodtke provides examples of both good and poor Objectives (see Fig. 2 below).
- Key Results are tangible and quantitative – Each Objective will have three quantitative Results that let you know when you’ve hit your Objective (see Fig. 3 below). Wodtke stresses that Key Results are “hard goals, the kind where you only have a 50/50 shot of achieving.” These ‘stretch goals’ are hard to achieve but not impossible, and you indicate for each Key Result how confident you are of achieving it.
- OKRs and health metrics – In the book, Wodtke makes a helpful distinction between OKRs and health metrics. OKRs are “the thing you want to push, the one thing you want to make better.” I’d add an emphasis on the word “one” here as I find working with a single business Objective to be most effective. In my experience, having multiple business Objectives starts muddying the water in terms of focus and prioritisation. Instead, start with setting one Objective for the company. Secondly, set OKRs for each team that ty back to the company goal. Health metrics are the key things to continue to watch, these metrics are more concerned with ‘hygiene’.
- Set OKRs together, pick Key Results as a team – Identifying and agreeing on Objectives and Key Results is a collaborative process. Clearly articulating and sharing the business Objective is a critical first step. The different teams can then set those Key Results which they believe will contribute to the business Objective.
- Progress monitoring – I particularly liked the 4×4 matrix that Wodtke suggests as a way of monitoring progress with respect to achieving your business and associated team OKRs (see Fig. 4 below). This matrix is a very simple but effective way of committing to (weekly) priorities and capturing progress.
- Setting a rhythm of execution – Wodtke introduces a number of weekly ceremonies which you can use to keep OKRs relevant and to ensure that you keep to them (see Fig. 5 below). The risk with goal setting is that it remains a one off exercise and I believe that having weekly ‘commitment’ and ‘win’ sessions will help massively keeping OKRs front of mind.
Main learning point: In “Radical Focus”, Christina Wodtke does a great job of explaining the role and value of OKRs. Not only does she provide valuable tips on how to best define OKRs, Wodtke also offers useful methods of keeping track of progress against OKRs. If you feel that you and your business are doing too much of everything, or not achieving anything, then Radical Focus is a must read!
Fig. 2 – Examples of good and poor Objectives – Taken from: Radical Focus, p. 110
Here are some good Objectives:
- Own the direct-to-business coffee retail market in the South Bay
- Launch and awesome MVP
- Transform Palo Alto’s coupon using habits
- Close a round that lets us kill it next quarter
And some poor Objectives:
- Sales numbers up 30%.
- Double users.
- Raise a Series B of 5M.
Fig. 3 – Key Results – Taken fromRadical Focus, pp. 111 – 112
Key Results can be based on anything you can measure, including:
For example, if your Objective is to “Launch an Awesome MVP” you could have the following Key Results:
- 40% of users come back 2X in one week
- Recommendation score of 8
- 15% conversion
Fig. 4 – Example of Christina Wodtke’s 4×4 OKR matrix
Fig. 5 – Setting a rhythm of execution – Taken from Radical Focus, pp. 120 – 123
Each Monday, the team should meet to check in on progress against OKRs, and commit to the tasks that will help the company meet its Objective.
- Intention for the week – What are the 3-4 most important things you must get done this week toward the Objective? Discuss if these priorities will get you closer to the OKRs.
- Forecast for the month – What should your team know is coming up that they can help with or prepare for?
- Status toward OKRs – If you set a confidence of five out of ten, has that moved up or down? Have a discussion about why.
- Health metrics – Pick two things you want to protect as you strive toward greatness. What can you not afford to eff-up? Key relationships with customers? Code stability? Team well-being? Now mark when things start to go sideways, and discuss it.
Fig. 6 – OKR Fundamentals – Taken from Radical Focus, pp. 109 – 112
Your Objective is a single sentence that is:
Qualitative and Inspirational
The objective is designed to get people jumping out of bed in the morning with excitement. And while CEOs and VCs may jump out of bed in the morning with joy over a 3% gain in conversion, most mere mortals get excited by a sense of meaning and progress. Use the language of your team.
For example, doable in a month, a quarter. You want it to be a clear sprint toward a goal. If it takes a year, your Objective maybe a strategy or even a mission.
Actionable by the Team Independently
This is less of a problem for startups, but bigger companies often struggle because of interdependence. Your Objective has to be truly yours, and you can’t have the excuse of “Marketing didn’t market it.”
An Objective is like a mission statement, only for a shorter period of time. A great objective inspires the team, is hard (but not impossible) to do in a set time frame, and can be done by the person or people who have set it, independently.
Fig. 7 – Quick tips on OKRS use – Taken from Radical Focus, p. 153
- Set only one OKR for the company, unless you have multiple business lines. It’s about focus.
- Give yourself three months for an OKR. How bold is it if you can do it in a week?
- Keep the metrics out of the Objective. The Objective is inspirational.
- In the weekly check in, open with company OKR, then do groups. Don’t do every individual; that’s better in private 1:1s.
- OKRs cascade; set company OKRs, then group’s/role’s, and then individual’s.
- OKRs are not the only thing you do; they are the one thing you must do. Trust people to keep the ship running, and don’t jam every task into OKRs.
- The Monday OKR check in is a conversation. Be sure to discuss change in confidence, health metrics and priorities.
- Encourage employees to suggest company OKRs. OKRs are great bottom up, not just top down.
- Make OKRs available publicly. Google has them on their intranet.
- Friday celebrations is an antidote to Monday’s grim business. Keep it upbeat!
Related links for further learning: