Leverage OKR (Objective Key Results) Framework for Sales

About OKR

Objective Key Results (OKRs) are a wildly
popular goal management framework used by companies that want to  break out of the status quo while providing
guidance to achieve  new goals and
objectives.

OKRs are a simple tool used to create alignment and
engagement around measurable goals; essentially, the link between strategy and
results.  The primary goal of an OKR is
to connect the company, the team, as well as personal objectives in a
hierarchical way to achieve measurable results by making all employees work
together in one unified direction.  It
does this by setting, communicating and monitoring goals within an organization.   The key to implementing successful OKRs is to
make sure each individual knows what’s expected of them at work.

History of OKR

• Peter Drucker created a popularly adopted Management by Objective (MBO) in 1950’s.   
• OKT was first developed by Andy Grove at Intel to be used by the Intel workforce where he served as an executive in the 1970’s
• The 1990’s had a large falling out of goal management platforms such as MBO because they created a rift and disconnect between the employees and the organization. In addition, it resulted in some public quality faux pas.
• Google implemented OKRs with great success in the 1990’s with the aid of John Doerr, who is a VC at Kleiner Perkins and was a popular executive at Intel.
• In the 2000’s, OKRs saw a lot of traction thanks to John Doerr.  Many companies followed suite and had successful adoption of OKR’s including Salesforce.com, Netflix, and GE.
• John Doerr published “Measure What Matters” about OKRs and success stories (great read for organization leaders).

Setting up
OKR’s

OKRs are good for both Fortune 500 companies and startups
alike.  They can be used for quickly
scaling start-ups or for large industry leaders to maintain their leader
position.  By using OKRs, companies are
able to set and incorporate goals, and communicate those goals throughout the
organization so all employees are working toward a common goal.  OKRs set strategy and goals over a specified
amount of time for an organization, teams, and individuals. At defined time
periods, you can evaluate your performance and, if needed, adjust what is
working or not. Below we will discuss how to set up successful OKR’s.

The Mission

Most organizations have a mission and vision statement,
typically a non-qualitative statement that establishes ideality, the companies
belief system and long-term purpose.  This
will sit on top of the OKR pyramid as the guiding North Star. 

Let’s assume your company sells life-changing widgets.  Your company mission may read something like:

Mission: To improve the quality of life around the world with widget X

Defining the Objective – Annual

Next, let’s define the objectives.  Objectives can range from obtainable to the Big Hairy Audacious Goal.  For example, this Big Hairy Audacious Goal for NASA was to put a man on the moon, or more recently, Mars.  An Objective is a description of a goal to be achieved in the future. You need to be able to easily tell if you have reached this objective, and just as important, have a clear path to reaching that objective, which are the Key Results.  Objectives need to be directional, aligned (with the mission), and time-bound.

Some examples of Objectives may be:

Objective 1: Become a market leader in widget X product group
Objective 2: Achieve 150% of last year sales.

Defining the Key Result (called Pursuit in Abaav Performance) – Monthly

A Key Result is a metric (numerically-based expressions
of success or progress) towards an Objective. 
You begin with a starting value and a target value that measures
progress towards an Objective.   Your Key
Results need to make the Objective
achievable (if we hit all the Key Result metrics, will we hit the
Objective?) and Measurable (metric-driven).

Let’s continue with the example of your company that makes life-altering
widgets.  If we want to accomplish the
two objectives, these are the Sales Key Results we would set (Monthly time
frame):

Key Result A: Close 10 deals over $100K each
Key Result B: Close 50 deals over $50K each
Key Result C: Achieve 120% repeat business revenue vs last year

Setting the Activity – Daily

An Activity is a description of the work
you’ll do to influence a Key Result. If an Objective is your destination and a
Key Result shows the distance to go, the Activity describes what you’ll do to
get there.  To achieve our ambitious Key Result,
we will set these Activities for our team and individuals.  Note that these do not have to be distributed
evenly for teams or individuals.  Some
teams or individuals are better at some tasks then others.

Continuing with this example, to reach our annual Objective,
we set Monthly Key Results, and now we will have daily Activities:

Activity W: Schedule 10 product demo’s per team
Activity X: Make 400 outbound calls per team
Activity Y: Make 1200 outbound emails per team
Activity Z: Make 7 customer visits per team

The organization will be aligned because OKRs create full transparency of what everybody needs to accomplish to hit the high-level company Objectives and live up to the company Mission. This type of goal framework aligns the organizational, each individual, and the management. To be successful, you need to do more than just implement software and set up goals and metric. For your organization to succeed will require work on everybody’s part to embrace and adopt the OKR platform. This will require top-level leadership buy-in, championing these targets, keeping everybody accountable, and coaching those that fall behind. Remember that goals should not only come from the top. Real motivation and adoption happen when individuals own these targets and hold themselves accountable; this is why we recommend that half of the Activity and Key Results come from the bottom-up.

We wish you luck is this exciting and transformative journey!