Chapter 3. How to Hold a Meeting to Set OKRs for the Quarter

Setting OKRs is hard. It involves taking a close look at your company, and it involves having difficult conversations about the choices that shape the direction the company should go. Be sure to structure the meeting thoughtfully to get the best results. You will be living these OKRs for the next quarter.

Keep the meeting small—10 or fewer people if possible. It should be run by the CEO, and must include the senior executive team. Take away phones and computers. It will encourage people to move quickly and pay attention.

A few days before the meeting, solicit all of the employees to submit the Objective they think the company should focus on. Be sure to give them a very small window to do it in; 24 hours is plenty. You don’t want to slow down your process and, in a busy company, later means never.

Have someone (a consultant, the department heads) collect and bring forward the best and most popular Objectives.

Set aside four and a half hours to meet: two 2-hour sessions, with a 30-minute break between.

Your goal: cancel the second session. Be focused.

Each executive head should have an Objective or two in mind to bring to the meeting. Have the best employee-generated Objectives written out on Post-it notes, and have your executives add theirs. I recommend having a variety of sizes available, and use the large ones for the Objectives. Cramped writing is difficult to read.

Now, have the team place the Post-its up on the wall. Combine duplicates, and look for patterns that suggest people are worried about a particular goal. Combine similar Objectives. Stack rank them. Finally, narrow them down to three.

Discuss. Debate. Fight. Stack. Rank. Pick.

Depending on the team you have, you have either hit the break or you have another hour left.

Next, have all of the members of the executive team freelist as many metrics as they can think of to measure the Objective. Freelisting is a design-thinking technique. It means to simply write down as many ideas on a topic as you can, one idea per Post-it. You put one idea on each Post-it so that you can rearrange, discard, and otherwise manipulate the data you have generated (see Figure 3-1).

Figure 3-1. Freelisting in practice

It is a far more effective way to brainstorm, and it results in better and more diverse ideas. Give the team slightly more time than is comfortable, perhaps 10 minutes. You want to get as many interesting ideas as possible.

Next, you will affinity map them. This is another design-thinking technique. All it means is that you group Post-its with like Post-its. If two people both write daily active users (DAU), you can put those on top of each other. It’s two votes for that metric. DAU, MAU, and WAU are all engagement metrics, and you can put them next to one another. Finally, you can pick your three types of metrics.

Write the KRs as an X first; that is, “X revenue” or “X acquisitions” or “X DAU.” It’s easier to first discuss what to measure than what the value should be and if it’s really a “shoot for the moon” goal. One fight at a time.

As a rule of thumb, I recommend having a usage metric, a revenue metric, and a satisfaction metric for the KRs; however, obviously that won’t always be the right choice for your Objective. The goal is to find different ways to measure success, in order to have sustained success across quarters. For example, two revenue metrics means that you might have an unbalanced approach to success. Focusing only on revenue can lead to employees gaming the system and developing short-term approaches that can damage retention.

Next, set the values for the KRs. Make sure they really are “shoot for the moon” goals. You should have only 50 percent confidence that you can make them. Challenge one another. Is someone sandbagging? Is someone playing it safe? Is someone foolhardy? Now is the time for debate, not halfway through the quarter.

Finally, take five minutes to discuss the final OKR set. Is the Objective aspirational and inspirational? Do the KRs make sense? Are they difficult? Can you live with this for a full quarter?

Tweak until they feel right. Then, go live them.

You’ll find a worksheet to help you out at http://eleganthack.com/an-okr-worksheet.

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