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OKR Review Process

December 21, 2020 by Dustin

So… if an Objective and Key Result exists and nobody knows about it… does it really exist? Kinda like that damn tree falling in the forest, right?

It’s absolutely critical that:

  1. OKRs become part of your daily work.
  2. You adopt a formal ritual for reviewing OKRs.
  3. You adopt feedback that makes sense to you.

Let’s break that down. But first, let’s outline a sample OKR that we’ll use in this article.

Objective: Achieve 50% sales growth this year through sales training and by leveraging technology.

Key Results:

  1. Implement SalesForce to automate lead follow-up/nurture loop, and ensure all sales staff are trained on use.
  2. Sales training for sales staff relevant to Widget A and Widget B.
  3. Implement lead generation to achieve 100 leads per month.
  4. Achieve a 40% increase in Widget A sales.
  5. Achieve a 60% increase in Widget B sales.

OKRs should become part of your daily work

OKRs become part of your daily work.
OKRs become part of your daily work.

The most important bit about OKRs, as the strategy bridge between vision and execution, is that they should become part of your daily work. To be specific, the Key Results outline the body of work to be accomplished in order for the Objective to be achieved. So the Key Results ought to drive a specific backlog of work items that you add to your everyday work.

If you look at the example Key Results above, it should be pretty obvious how this works. Take KR 1 – the SalesForce implementation. Remember that the Key Results themselves don’t spell out every detail of work that needs to be done, but they do identify the body of work that needs to happen. And that’s pretty clear here. It looks like we’ve got a business on our hands that needs a new implementation of SalesForce and everybody needs to be trained in how to use it.

There are some pretty clear action items to line out and add to the daily work. That’s one of the awesome parts about OKRs. In this way, OKRs are both strategic, but very, very tactical at the same time.

Adopt a formal “ritual” for OKR review

Monthly OKR review isn't just a meeting, it's a ritual that helps drive culture.
Monthly OKR review isn’t just a meeting, it’s a ritual that helps drive culture.

As we just saw, it’s relatively easy to blend OKRs into your daily work. That’s great because it means:

  1. That way OKRs actually get worked on.
  2. OKRs naturally get reviewed right alongside other work in the other sorts of reviews that happen.

For example, are you a software programming shop? You’ll find you’re including OKR work automatically in sprints, reviewing in stand up, retrospecting, etc. Are you a construction company? You’ll have your work alongside your daily and/or weekly project meetings. The point is whatever you do, with OKR work blended into your normal work, it’ll also get reviewed.

But don’t stop there.

Make sure you schedule a monthly ritual in which you formally review the status of your OKRs from end to end. I call this a “ritual” because its purpose is beyond simply meeting and checking the status of OKRs – anybody can do that. The process of doing this publically, celebrating well-deserved success, and of helping each other troubleshoot shortfalls and get back on track is the very process that will build the culture you ought to be looking for… A culture of teamwork, collaboration, and accountability where everyone is focused on the same things and rowing in the same direction.

Download Your FREE OKR Workbook

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Adopt feedback that makes sense to you

OKR feedback should be easy to understand, easy to use, and easy to communicate to others.
OKR feedback should be easy to understand, easy to use, and easy to communicate to others.

One of the most confusing – and most hated-by-me – aspects of the original OKR implementation outlined and popularized by John Doerr is that “success” or “complete” for a “Key Result,” and therefore the Objectives they make up, should be calibrated at 70%. I’ll give you a moment to re-read that sentence.

So in other words, in the original implementation, on a scale of 1 to 100, 70% doesn’t mean “we’re doing pretty good” or “we’re getting pretty close to done.” No. It means, “We’ve met the goal,” or, “We’ve achieved the intended result,” or, “We’re done.” So anything past a score of 70% – like 80% – means we’ve exceeded the goal. The idea behind this is if you set 70% as the threshold of accomplishment, it encourages you to go “bigger” and accomplish more. Cool, right?

Eh… meh. Don’t worry about this. I don’t do this and I recommend you don’t bother. Just “score” your OKRs based on how complete they are. And if you want to go bigger? Easy. Set bigger and better goals and Objectives. It’s way less confusing.

If you don’t believe it’s confusing, let’s walk through two examples.

For the first example, consider Key Result #2 – sales training for all the sales staff in selling Widget A and Widget B. Either the sales team completed the training, or they didn’t. So tell me, how do you “exceed” this goal? I suppose you could game the system and add in additional training on other topics. But that’s not exceeding this Key Result. That’s adding in work related to some other as-of-yet-unnamed Key Result. Moral of the story: You’re going to run into a lot of Key Results that can’t be “exceeded.”

For the second example, look at our Key Result of achieving a 40% increase in Widget A sales. So if we’ve achieved 20% – halfway to our goal – we’d score ourselves at 50%, right? Nooo. We’d score ourselves at 35%, halfway to 70%, remember? And when we achieve a 40% increase, we’d score our Key Result at 70% – success! And if we go beyond the 40% increase to, say 50%, we’d give ourselves a score of 87.5%! Why 87.5%? Because 50-40 = 10% or 25% of 40%, and 25% of 70% is 17.5%, so to represent 50%, 70% plus 17.5% = 87.5%. Easy as… not what I want to be doing with my time.

Yeah, that was confusing as hell. Not to mention in reality the only information I personally care about is:

  1. How close am I to the goal? Put another way, “ARE WE THERE YET??” (Sorry… I’m in a life stage where I hear this too often,) And how much further to go?
  2. Did we hit the goal?

If we’ve exceeded the goal, great. But frankly, if that’s the case, I’m already moving on to new goals. So if we’re going to talk about goals we’ve exceeded, I don’t need fancy % math.

If you use my OKR Workbook, then the feedback you receive is “stoplight” color-coded, and you have the opportunity to control the thresholds. But the important part is “Complete” is 100% and anything below that is “we’re getting closer, but we’re not there yet.”

Bringing it Together

In my happy little world, “done” means 100%, we work on OKRs right alongside the rest of our work, and the process of formal review of OKRs means a chance to build and reinforce the culture that’s absolutely critical to success. Give this a try with my workbook and let me know how this works for you.

Back to Index | Next: OKR Examples

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Four tips for how to create an effective OKR review process.
Four tips for how to create an effective OKR review process.

Filed Under: OKR Tagged With: feedback, review, ritual

Intro to OKRs

December 21, 2020 by Dustin

OKRs, or Objectives and Key Results, are a planning methodology made famous by John Doerr and Google in the early 2000s.

This collection of articles is my introduction to Objectives and Key Results (OKRs) tuned especially for small to medium businesses.

OKR How-To

  • What is OKR?
  • OKRs as Strategy and Alignment
  • Setting Objectives in OKRs
  • Setting Key Results in OKRs
  • OKR Review Process

Deep Dive into OKR Info

  • OKR Examples
  • OKRs vs KPIs
  • Benefits of OKRs
  • OKR Cadence and Time Frame
  • OKR Mistakes and Pitfalls

Download Your FREE OKR Workbook

Get a pre-made Excel template featuring examples, explanations, and built-in calculations.

Download the OKR Workbook

 

Filed Under: OKR Tagged With: intro to okr, objectives and key results, okr

What Are KPIs

December 21, 2020 by Dustin

KPIs, or Key Performance Indicators, are measures and metrics which we have identified as critically important and valuable for their ability to help us evaluate the performance of the business. Put another way, they are data points that instantly tell us either that some aspect of the business is performing well, or that some aspect of the business is having a problem. They provide us with a lot of information in a very short amount of time and help us keep on top of the business.

KPIs are one of the two professional management tools we use to aid command and control of the business. OKRs are the other.

What KPIs Do For the Business

Even if you’ve used Key Performance Indicators (KPIs) before, I want you to think of them as the “daily drivers” in your business. KPIs serve as the “early warning radar system” you need.  I want you to be clear that their purpose is to:

  1. KPIs measure what's importantBy their simple existence, they highlight those things which are important to measure in your business. I mean this in the vein of “What gets measured gets managed.” Also, “If you can’t measure it, you can’t managed it.” Both are quotes usually attributed to Peter Drucker.
  2. The KPIs you select don't change much over the long term.KPIs are long term and steady. That is, we tend to keep the same KPIs quarter over quarter, and year over year. Obviously the values and even the targets change, but the KPIs we’re measuring and managing don’t change that frequently.
  3. KPIs provide at-a-glance business intelligence.They provide “at a glance” intelligence about your business. When KPIs are crafted well and compiled effectively, you ought to be able to tell in 60 seconds or less which parts of your business are doing well and which aren’t. The clarity is amazing.
  4. KPIs help drive business performance and growth.They help drive performance and growth. That’s because we’re not going to simply record performance against KPIs. We’re going to establish baseline (where we are now) and target (where we want to be). Then we’ll plan out performance against our KPIs and measure our success along the way.
  5. KPIs highlight the trend of your business.KPIs show the trend of your business. They highlight when things are getting better, holding steady, or declining. They show these things with plenty of time for you to be able to take action. That’s how they serve as an “early warning system.”

What It’s Like to Use Key Performance Indicators (KPIs)

Take literally no more than 10 seconds and look at the diagram below.

Key Performance Indicators (KPIs) sample

You should be able to immediately tell that:

  1. We’re making our revenue goals.
  2. Also, Cost of Goods must be under control because we’re making our Gross Profit Ratio.
  3. But Operating Profit is starting to dip.
  4. And we’re not making our NET Profit goals.

I don’t know about you but I feel like I have command of information. I know what questions to ask next to drill into the issues. And that was just using four data points. Normally, we’d have a more complete picture.

That is one of the key power points of KPIs, but there is much, much more.

Back to Index | Next Up: Measures and Metrics

Download the KPI Planning and Tracking Worksheet

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Learn 6 key aspects about Key Performance Indicators (KPIs) and how to use them effectively.
Learn 6 key aspects about Key Performance Indicators (KPIs) and how to use them effectively.

Filed Under: KPI Tagged With: KPI

Intro to KPIs

December 21, 2020 by Dustin

KPIs, or Key Performance Indicators, are a powerful professional management tool small-to-medium businesses can easily apply to up their game. KPIs are one of the two primary systems I use here at Pivot Habit, with OKRs being the other.

This page captures the links that walk through background information as well as exactly how to apply KPIs in small-to-medium businesses. If you get through this and still have questions, please reach out and ask.

KPI “How-Tos”

  1. What Are KPIs?
  2. Measures and Metrics
  3. Outcome and Performance Metrics
  4. Defining KPIs
  5. Defining a Performance Budget
  6. KPI Review Process

Deeper Dive into KPIs

  1. KPIs vs OKRs
  2. Benefits of KPIs
  3. KPIs as Strategy and Alignment
  4. KPI Cadence and Time Frame
  5. KPI Pitfalls and Mistakes

Download the KPI Planning and Tracking Worksheet

Save hours of work by starting with a pre-made Excel Workbook featuring examples, explanations, and built-in calculations.

Download the KPI Workbook

 

Filed Under: Uncategorized

The Top Seven REAL Reasons Small to Medium Businesses Fail

November 27, 2020 by Dustin

There are a lot of “top reasons” lists floating around out there claiming to spot the reasons businesses fail. For example, here’s one from Investopedia, a resource that I respect and trust.

The issue I find with most is the “problems” most lists cite for business failure are symptoms, not causes.

If you’re going to navel gaze at your business, do yourself a favor and try to get at the root cause for whatever ails your business.

With that in mind, here are the top seven issues I see with my clients that either trip them up, hold them back, or make businesses fail:

Not Solving a Real Problem

Caridnal sin #1 – failing to have a conversation with actual customers or potential customers. This leads to a special kind of groupthink that results in a solution in search of a problem. Make no mistake: you can successfully raise millions of dollars for business ideas created in this fashion, but it doesn’t mean they’ll succeed.

The Fix:

Come up with your idea any way you can. But have real conversations with real people about their real problems and your solution. Have the conversations early in your cycle – well before you’ve invested your blood and millions. Let them help you pivot.

The Team Doesn’t Understand, Like, or Trust Each Other

I’ve seen team dynamics get in the way to the point that nothing else truly accomplished. Almost everything on the list below this item involves the team coming together, agreeing, and acting as a unit. If the team doesn’t understand each other’s communication styles, work styles, and intentions, that gets exceptionally hard to accomplish.

The Fix:

This is part culture building, and for many teams, part marital counseling. It’s really critical to find some way to build a culture of cohesion and understanding. I’m not talking trust falls and weekend retreats. I’m talking rituals and ways of treating one another. As for the marital counseling in business team form, there are a number of tools designed to help teams get past that gap in interpersonal understanding. Contact me or another consultant for more information in this space.

Unclear Vision

If you’re the leader – the top cheese, the boss, the head honcho, numero uno (you get the idea) – you’ve got two choices. Either you set an exceptionally clear vision yourself and tell the team, or you get the team to build the vision with you.

The Fix:

My preference is you build an exceptionally clear vision in conjunction with the team, while you “keep your thumb on the scale,” as it were.

Here’s the critical bit. When you’re building and communicating the vision, don’t target your management team. Target the lowest person in your organization. Make sure the lowest person in your organization hears the vision, understands it, knows how they relate to it and deliver against it. Communicate is to THAT person clearly and incredibly often. Beat it (figuratively) into their heads.

I cannot stress enough how critical it is that everyone have a clear vision, and that when you think you’ve beaten the vision to death, you need to do it again. Trust me on this.

Unclear Strategy

If vision is “what we’re going to build,” then strategy is “the big picture of how we’re going to get it done.”

I find that most teams, with a little coaxing, can spit out a pretty clear vision. Things start to get a little fuzzy spitting out a strategy. If your strategy is fuzzy, get professional help. Full stop. You need a strategy that is both sound and ready to pivot.

The Fix:

Strategy can be a bit of an art so it’s tough to summarize in a paragraph. But a good indicator of whether you’re on the right track is if you’ve got clear, written Objectives identified that cover the scope of your vision. If those objectives are back-planned from a three year time horizon, even better.

Can’t Cross the Gap from Strategy to Plan

The second biggest stumbling block I see in my clients is a developed strategy that’s totally disconnected from the day to day planning and execution.

The truth is unless you have a plan, method, and step-wise approach for getting there, it can be quite challenging to make the transition from big-picture strategy to tactical execution.

The Fix:

It will always be challenging but it doesn’t have to be rocket science. Your goal here is to chunk your Objectives into smaller bits, most commonly called Key Results, and plan how to accomplish them. If you have measurable indicators of what success achieving your Objectives looks like, it makes it a ton easier to achieve them.

Fail to Execute

This is the biggest issue I see. Even without a clear strategy, most business owners and leadership teams I know are incredibly intelligent and can come up with their own idea of what needs to be accomplished. Where things tends to fall apart is in the doing.

The Fix:

It depends. What’s your deal, yo? Sometimes the responsible person just doesn’t know how to do the job. That can be fixed (often). Sometimes the person doesn’t want to do the job. That may also be fixed (sometimes).

Sometimes things are a little bit more complicated… like when the issue involves illegal actions, inappropriate relationships, or threats from competitors.

But the vast majority of the time, it’s a simple matter of people knew what to do and just didn’t get the job done. This is a case where it’s time to build a culture. The choice of culture is up to you. Personally, I advocate a culture of collaboration and support (think Three Musketeers – “All for one and one for all”) blended with a healthy dose of accountability that everyone is expected to do their jobs without fail, absolutely.

Funding

This is the oddball out. Everything else on this list is 100% human. This one is human primarily if you’re raising venture capital (where relationships are more important than folks will admit).

The Fix:

There is no substitute for funding. You have to secure the capital you need. If you’re going the venture route, do not under-estimate the power of relationships.

Bringing it Together

Make no mistake: The people aspects of your business and leadership team have the power to set your business apart and make you stand apart from your competition. They also have the power to sink your business.

Do you see yourself in any of the above issues? Drop me a message and let me know.

Filed Under: General Tagged With: fail, method

The Five Fastest Ways to Turn Around Any Business

November 27, 2020 by Dustin

In my work with small to medium businesses over the years, my work has been couched in terms of helping teams maximize performance, helping them excel, being the best they can be, and so on. It’s a positive message that resonates well: everybody likes to see themselves successful.

However, to some degree stated or unstated, the feeling across the leadership team is much more pointed. It’s the bottom of the 7th inning. The game definitely isn’t over but we’re worn out from pitching. We’re already a couple runs down, and we’re not sure what to throw next. If we don’t get this game figured out – and soon – we’re going to lose.

We can’t lose.

The term “turnaround” doesn’t always fit because my clients aren’t usually on their last legs, deep in debt, and struggling to breathe. “Pivot” is a better word. We’re not looking to pivot the entire business model, but we definitely need to have a watershed moment in the business. We have to discover whatever it is that’s “wrong” and “make it right” so that it’s easier to make a buck and once again more fun to get out of the bed in the morning.

Here are the five fastest, most impactful ways I get my clients over that line.

Ask the Customers

You’ve heard the old saying, “In real estate, it’s location, location, location.” But that’s only partly true. It’s really “price, price, price.” It doesn’t matter what you think the price should be. It only matters what the market things the price should be.

Also, it seldom matters what you think your customers need, should pay, or will want. It only matters what you think. Almost none of the businesses I work with have an established channel / forum / mechanism / pick-your-word for a way to communicate with their customers to discover their most critical needs and how to solve them.

I focus an entire module of effort on this question as it is so critical to flipping the script from a relationship where you’re chasing elusive customers to creating a space where clients trust you, seek you out, and ask more of you.

Kill the Demons

“Business isn’t personal.” Lies, and more damn lies. It’s very personal, and it’s a mental game. How are you at it as a mental game? Be honest for a moment about your internal (or external… you know who you are…) monologue?

If I were to challenge you to count your positive vs. negative thoughts, statement, and actions, do you think your balance would be 80% positive to no more than 20% negative? I’ll be the first to admit that’s really hard to maintain! But I ask that goal not because I’m some Pollyannish tree hugger, but because our thoughts tie out to actual brain chemistry that impact critical thinking, creativity, relationship management and much more that is so critical in business.

So, how do we get there? I cover specific techniques in other articles and in my work, but for the moment…

Focus. Really Focus

Pop quiz. What is your method for cleaning out a milk jug? I mean getting it really super duper extra clean and free of soap?

Add a little soap, hot water, swish and dump? Yeah, that’s not going to work. You can’t get all the soap out through multiple rinses. Go try – I’ll wait.

The only way to truly get all the soap out is to keep adding water until the jug overflows and flushes every last bit of soap out.

Are you picturing this milk jug? The water is focus and positive thoughts. This milk jug is your brain on focus and positive thoughts. Any questions? (Ok, I’m no Nancy Reagan but hopefully you got the 1980s reference…)

It is so critical that you have a clear, crystalized focus in front of you at all times so that you can “fill yourself back up” with that whenever challenges do arise.

Kick it Up a Notch

So what does that look like? You need to kick it up a notch. I mean WAY up.

The clients I work with rarely believe when we begin how serious I am about how specific we’re going to get.

I want to see a really specific picture of what you’re building. Some people call that a “vision.” But I’m not interested in “vision statements.” I’m interested in precisely what are you building, what phase are you in, how much are you going to sell, to whom, etc. Really specific.

I’m also interested in your execution plan. What are you going to do this week? Next week? This month?

Not surprisingly, there is a lot of method I use to make it easy to break a business down into bite-sized 1-week and 2-week action plans that doesn’t fit well in an article like this. But if you can create a task list like that for yourself, you will be amazed at just how much more “doable” your business feels.

Find an Outside Partner

Having a partner is like striking gold. The diversity of thought and experience you gain is incredible.

This can be a professional like an attorney, an accountant / CPA, or a business consultant like me. It can also be an experienced and trusted business owner or leader in a non-competitive space who may have experience to lend.

The key to success here is to have a partner who, through their insight is able to lift you up and help you along through the challenging times. It also provides a sense of accountability to meet, review, and take action when things aren’t going well.

Wrapping Up

I can – and often do! – go on about how to help teams rapidly turn around their performance and business ventures as there are lots of options. However, these are truly some of the five most common that I lean on with my clients.

Let me know what you found valuable about these tips.

Filed Under: Mental game Tagged With: business, mental game, teams, turnaround

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