Why should I use OKRs?
Your business exists for a reason.
It's encapsulated in your vision, mission and purpose statements. As the leader of your agency, your job is to guide people into turning that into reality. But how?
To do that, you need to answer two fundamental questions:
1. Where do I want to go?
You need to set a goal, a thing to aim for
It's extremely unlikely you'll be able to achieve your company's vision in one go — and if you can, it probably isn't actually very visionary. So, in all likelihood, your goal will be a step along the way towards your vision.
2. How will I know if I'm getting there?
In order to achieve your goal you'll need to gauge how you're doing along the way.
First, you'll need to know whether you're travelling in the right direction, whether you're doing the right things to get you there.
Second, you'll need to know whether you're moving at the right pace to get there in time.
This is exactly what OKRs do.
Where you want to go — that's you're Objective.
Whether you're getting there — that's your Key Results.
When should I use OKRs? And when should I not?
Deciding whether or to use OKRs is a big one — it can (and should) affect the whole business, and shouldn't be done lightly.
How do you know, though, whether OKRs are right for you and your business? This matrix diagram will help you.
Inspired by the famous illustration from Boston Consulting Group called the Growth Share Matrix.
The product portfolio matrix plots market growth against market share. Your agency should fit into one of the quadrants in this matrix somewhere — either as a whole, or each of the individual business models within your company.
Low Growth; High Market Share: You have dedicated yourself to this quadrant — a significant part of your business, or a major service or product. But there's no growth here, if any, so it's demanding lots of time and but there's good reward. This is the Exploit quadrant. Make the most of it, before it starts drying up.
High Growth; Low Market Share: You don't have much going on in this area, few services or products if any, but it's growing like mad. This is the Explore quadrant. Could be time to try something out here — time to catch the wave!
High Growth; High Market Share: Your main focus is here — it's what you're known for, where you're putting lots of effort and you've built a reputation for yourself. And it's paying off, with lots of potential for new business. This is the Expand quadrant. Time to find how many tricks you can pull on this wave!
Low Growth; Low Market Share: This area isn't growing and you don't have much presence in it either. This is the Exit quadrant. If you've got any business here it's probably a pet project, but it could be dragging you down for little benefit. Time to say goodbye to these things, probably.
However, not all of these quadrants need OKRs.
You should only use OKRs for the top row.
- OKRs work best for any business you do in the Expand quadrant.
- This is where you'll want to use classic OKRs.
- They'll keep you focussed and aligned as you expand into a growing market.
- In the Explore quadrant, OKRs will probably still work well for you but you may need to adapt how you use them.
- You'll want to use different approaches in areas where you're unsure of things, for whatever reason.
- It can be hard to set your goals if you're not clear what you're doing.
- Later, when your exploring is becoming more concrete and you're beginning to focus on things you've discovered, you'll need a different flavour of OKRs.
- When your phases of work are very long term, as they can be in some sectors like finance and biotech, classic OKRs will be a poor fit.
- We'll talk about this later.
- You'll want to use different approaches in areas where you're unsure of things, for whatever reason.
OKRs don't fit in the bottom row.
In the Exploit quadrant in the lower-right section, despite your market share being large and your income high, there is little to no growth for your business model. Without a major (read: expensive) innovation or pivot for your business in this area, that's unlikely to change. If you do make that pivot, then you're probably moving your business into the top-left quadrant, to an Explore model.
In practice, that means that for your team working on the business model here in the Exploit quadrant, you're unlikely to get major increases on outcomes regardless of what you do. Adding OKRs to the practices of the business model here will only pile demands on a team who almost certainly won't be able to see any changes in the outcomes of their work. You'll just make them exhausted and probably frustrated, making demands of them when they just can't improve things — and that, clearly, will only lead to problems with retention.
Give them a break.
In the Exit quadrant … well … just don't do business here. It's a simple as that. There's no market share, so no income, and no prospects for growth either. Adding OKRs won't do anything.
Stay clear.
This in a short extract from the fuller What Works briefing on OKRs.
Joe Baker
The report is overflowing with research and insights that are highly practical, things to help you evaluate and implement OKRs in your agency — and how to make them work for you, too.
Want to read the whole briefing? It's simple: just subscribe to an Instant Access membership … and get the whole of the Agency Playbook and all Agency Leadership Briefings, Senate Reports and more as well.