Can OKRs help tech Founders grow faster in quickly changing B2B markets?

OKRs (Objectives & Key Results) are the most popular tool for executing strategy in tech businesses. Do they add value? When should they be used? How?

OKRs are probably the best tool to help startups execute their strategy more effectively and get to high growth but getting value from them means deciding when, how and where to use them.?

Context is Everything

OKR emerged as a process to help large mature complex businesses that had lost their way find their mojo. They communicate strategy, align the team to the purpose, and create transparency and accountability. Stretch goals create a high-performing environment and help disengaged teams re-engage. The business environment is structured with low ambiguity. OKR initiatives often fail because they don't overcome organisational inertia.?

Startups are created from a deep sense of purpose to which the Founding team is aligned. They are high-performing environments and the team is in a state of high distress for the first few years. The business environments are unstructured with high ambiguity. OKR initiatives often fail because they create an admin burden that can’t keep pace with the change or offer the flexibility to cope with ambiguity.

On the face of it, OKRs were designed to serve opposite ends of the business spectrum. B2B technology businesses now compete in distribution-first markets, where your go-to market strategy sets the strategy. OKRs are great at creating and executing data-driven growth models that measure and track your go-to-market strategy.?

OKRs can add enormous value to Founders but the Job to be Done (#JTBD) changes with the life stage of the business.

#JTBD by Lifestage

Ideation - Align the Founders to a common goal with clear measures of success. Start with the end in mind, frame data-driven growth models to reduce ambiguity and ensure everyone stays aligned.

Build - Align the build process to sales and customer value journeys. Built less, get to market sooner, build to sell

Launch - Create structured data-driven experiments to test different buying journeys and pricing models. Run more experiments, gather data faster and learn faster. Focus and structure make sure you are asking the right questions to take you to a commercially viable business model faster

Product Market Fit - Create intentionality to lock in on your Sector, identify the Category you will lead, find your ICP faster and create repeatable sales processes

Grow - Delegate more effectively, and narrow the focus to execute your growth strategy more efficiently. Lay the foundation to Escape the Founders Trap

Scale - Escape the Founders Trap and create a scalable business, create a Category leadership position

Expansion - Launch into new markets and repeat fewer of the mistakes made the first time around by creating structured focused market expansion templates.

Do’s and Don’ts

Do

• Use OKRs to create a common language to empower and align teams with shared goals.
• Use OKRs to help teams perform better by reducing ambiguity, creating meeting agendas, reducing the number of internal meetings and preventing operational meetings from becoming strategic and vice versa.
• Create outcomes-based OKRs to create a culture of accountability and execute better.
• Use OKRs to set and measure benchmarks. Benchmark everything. “If you don’t know where you are going you’ll end up someplace else’ Yogi Berra.?
• Start simple, top-down and don’t have more than seven Objectives to start. (Start with Seven!!). Aim for three levels to start from strategy to executable metrics and goals. Progress over perfection.
• Use OKRs to create, drive and measure a customer and product-centric culture. The more you focus on the customer the faster you will grow and the better your product will be.?What you measure is what you get.
• Use light touch OKRs to start. Process, adoption and engagement beat content and structure initially. It’s better to be roughly right than precisely wrong.

Don’t?

• Focus on soft Objectives in earlier stages. Measures of success are execution, survival and growth.
• Do dogma. Startups don’t have time for management science for its own sake. Apply a heavy dose of pragmatism and common sense. Rigorously apply lean principles. If it feels like a distraction or an admin burden then it probably is.
• Set stretch goals. Your goals are already stretch targets, on target is great. Adding more stress won’t help.
• Expect tools to solve problems for processes and behaviours that don’t already exist.
• Expect anyone to use OKRs if the Founders don’t.
• Go into too much detail when there is high ambiguity. Good enough is good enough.
• Expect the process to work the first time. Plan to restart the project at least three times until it sticks. It’s a war of attrition but it’s worth it.

Momentum and Control

In startups, the main Job to be Done (#JTBD) of OKRs is to create momentum and give the Founders the illusion of control. Founders are at the bottom of the mountain every morning, they rarely look back to see how far they have come or what they have achieved. OKRs create momentum by allowing Founders to see how far they have come. Founders seek control in a highly unstructured world, they want to be the swan gliding gracefully on the lake whilst paddling furiously under the water. The illusion of control removes the sense of overwhelm and creates some degree of psychological safety for the Founders and the team. Momentum and control are often all that is needed to keep going and approach daily problem-solving challenges in a positive light.

We love OKRs because of their simplicity and flexibility. They are not too prescriptive and provide enough structure to be effective. If you don't go faster you are doing it wrong.