Do you have your startup OKRS aligned or are you winging your growth?
Nov 18, 2021
Learn about the importance of startup OKRs for growth.
When you begin with an idea, you’re obviously so driven to make things happen and see it come alive. But the truth is that not all startups succeed. In fact, the failure rate of startups in 2019 was close to 90%! Research concludes a staggering 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year.
But why is it that only some good ideas are such a success, while the other good (perhaps even better) ideas fail miserably or just go back into the idea box again?
Well, the ones that succeed don’t just set goals to take their idea live, but are also not afraid to do the number crunching.
“To be clear, I have the utmost reverence for entrepreneurs. I’m an inveterate techie who worships at the altar of innovation. But I’d also watched too many start-ups struggle with growth and scale and getting the right things done. So I’d come to a philosophy, my mantra: Ideas are easy. Execution is everything”.
This is where OKRs (Objective Key Results) come in handy. It is a collaborative goal-setting protocol for companies, teams, and individuals. It is used by some of the most successful startups and tech giants of this era including Google, AOL, Dropbox, LinkedIn, Oracle, Slack, Spotify, and Twitter.
“OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of “organizing the world’s information” perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most”, says Larry Page, Alphabet CEO and Google Co-Founder.
What is a startup OKR?
In today’s economy, change is inevitable and a fact of life. You cannot hold on to what seemed to work in the past and expect the best results. You need to map out an organized and practical plan that also stands out as a motivation to your teammates.
OKR is a list of qualitative goals, set for a particular duration of time. This involves defining an objective with not more than 5 key results associated with it. For each period, let’s say a quarter, an OKR is described for every level of the organization – company, teams, individuals.
“Objectives and key results are the yin and yang of goal setting—principle and practice, vision and execution”
An objective is simply WHAT is to be achieved and key results are HOW to achieve the said objective.
Objectives are concrete, significant and action-oriented. Effective key results are more specific and time-bound linked to the objective. Actually, it is stressed that a key result should have a number associated with it. Thus, making it measurable and verifiable.
You either tick off a key result or you don’t. There is never ‘almost’ or room for any gray area. An objective can be stretched over longer time frames. However, key results evolve as the work progresses. Once all KRs are met, the objective is achieved.
OKRs allow you to cultivate coordination in your organization by helping keep everyone’s focus in the same direction.