A few years ago we completed an anonymous straw poll of 23 startup founders and executives broadly based in and around the Tech City UK branded startup cluster in London to back up a theory that there has been a massive transition of startups to google’s (OKR) goal setting methodology.
Hold up, what’s an OKR again!?
For those not familiar Objectives and Key Results is a goal setting methodology who’s take up has been accredited to John Doerr introducing it to Google back in the day and by many, many super successful household name level startups due to its strong communication and co-ordination elements as well as it’s measurability (disclosure: we’re had skin in the game back then as Benchify which Rainmakrr evolved out developed a platform for startups implement and manage their Objectives and Key Results).
Maybe it’s better to show than tell so, for example, one of my very real OKRs for Q3 14 could be;
- OKR: “Learn and educate about OKRs and have some fun along the way!”
The objective part of Objectives and Key Results can be visionary, big statement or real fluffy
But Key Results are not.
That’s very important.
Key results have to be achievable, usually in a quantifiable way.
So here is a nice and relevant key result example;
- KEY RESULT: “Achieve a 50% increase in views of my second Linkedin post about OKRs to a total of 439 views.”
See how tight that is.
Our first Linkedin post had 293 views back in 2014 so we thought we were either going to hit a 50% increase or not. We actually achieved almost 2.5k views making it our most successful Linkedin post ever but that’s another story! Also, we didn’t go for something like “5% or 10% increase” as that would have no stretch difficulty.
Because OKRs are not meant to be easy although the key results stretch difficulty, confidence in deliver, relevance and aspirational value are usually tracked in google docs or specialist software.
So when your management get their monthly or weekly OKR check-in report they can see that this OKR is healthy, but quite frankly, not vital to the business. But i do feel writing of any sort is aspirational so I’ve rated that a 9. But that could just be me.
OK, I feel we’ve got a bare bones understanding of OKR there!
Now, why do we feel an OKR 50% increase is achievable?
We used a 50% increase target as our real world key result example as we believed back then it was reasonably achievable because this post has had more research and the results of which are of interest to a core audience, unlike our first post on OKR, which was more conceptual.
The next difference with OKRs is that you rate them on a scale of 1-10 with 6-7 being a success. So if we hit our key result we’d rate it between 6-7 but if we got an increase on views on our last post – which is a fail but still good – maybe we’d rate it between 5-6.
Now back to the premise of the post that there’s been a massive uptake in OKRs amongst Tech City based tech startups…
And we were not wrong!
Of the 23 responses of the original survey in 2014 11 startups said they used OKR as their goal setting methodology.
And if we drill down into the survey results it’s looks like two thirds of all tech startups in the Tech City UK Shoreditch area of London with more than 21 staff have switched to OKRs
When did this happen?
Regrettably, in the original 2014 survey we didn’t ask when they adopted their current methodology. However, informal conversations would indicate that, excluding the avant-garde, most startups were back then only in their 3-4th OKR quarter after having their heads turned by Google Labs releasing their excellent overview of their OKR experience on May 13, 2013 (Google Labs OKR You Tube Video). So I feel it’s accurate to say this mass transition has occurred in the 2013-2014 period
So why are startups switching to OKRs?
Why startups are implementing OKRs en-masse is a bit more difficult to dissect and due to a number of factors and indirect influences.
OKRs are certainly no panacea, however, with the risk of slipping into dogma, they do seem to help a rapidly growing business share and coordinate their objectives without affecting independent goal ownership and while providing regular, measurable performance feedback.
Or maybe it’s just that if Linkedin, Google and many of the worlds most successful startups are using the latest magic sauce, it’s got to be good, right?!
But hold up, it seems not all are startups switching to OKRs
In our straw poll none of the startups with less than five staff were using OKRs and it’s almost the same story with the startups with staff of 6-10 as only one was using OKR with the majority using their own methodology (which may or may not be based on a formally defined methodology).
This would make sense when you consider that small teams should be on top of it all. And if they’re not, their problems are probably a lot worse than not knowing the business methodologies they’re using…
Growth startups would also have been challenged on how they plan to manage a scaling team by their new formed boards, advisors and investors and using a widely understood methodology popular on both sides of the fence is one less hurdle to jump.
And on a career development level if you understand all the business mumbo jumbo that will make you one hop, skip and a jump closer to those accelerated options or even getting to play CEO. Yup, now you’re googling…
OKR doesn’t always work
One London startup had tried OKRs and stated they didn’t work for them and now use the Lean and Lag methodology and another startup said they just simply weren’t appropriate. I get that. If you’re focused heavily on weekly sales OKR may not work at ops level, as OKR scoring is meant to be separate from remuneration and performance review.
And even a well-maintained methodological Chinese wall will not with stand that sort of weekly battering.
So although some of the data sub group are just too small to draw any concrete conclusions from, if we look back again at the big picture we can see a clear trend that OKR take-up does seem to have a much higher propensity when a startup is scaling.
When you go large, you go OKR
We draw that conclusion because the only two startups in the poll with staff over 50 employees had both either implemented, or were in the process of implementing, OKRs.
We therefore feel confident drawing this conclusion because, despite the small data set, it corroborates with the low OKR usage at the sub six employee level and the supporting trend that OKR usage steadily increases as the number of employees increases (approx.’ 40% of all startups in the poll use OKRs, 60% with 6+ employees, 62% with 11+, 64% with 21+ and 100% with 100 or more employees)
So there you have it. OKR scales
To summarise, even with a relatively small but not insignificant data pool of 23 startups its possible to conclude, with reasonable accuracy, the following:
- OKR is the fastest rising goal setting methodology within the Tech City startup community
- The bigger your team, the more likely you are to implement OKRs
But let me still throw in some get out of jail cards in here;
- The pool of startups we contacted using angel.co as a reference are broadly tech startups with payroll and far more likely to be within the gravitational pull of big tech mantra.
- If you’re a pre-Okronologial period mature startup who works off another methodology, why fix what isn’t broke?
So there are a few caveats there but the underlined trend of startup transition to OKR is real, valid and can be substantiated
Of course, if you’re not a startup all this OKR talk is meaningless gibberish.
But do stay with me as in my next posts I’ll cover in more depth why startups are switching to OKRs, how they view the benefits compared to other methodologies and somehow start addressing the elephant in the room size question, which is;
“Does a successful implementation to OKR have a causal relationship with your business success, or is it just a weak correlation, like more successful startups tend of have bigger offices and ship in sushi?”
Note the emphasis on successful OKR implementation
See. Now, you’re interested in OKRs…
This article was first published in 2014 on Linkedin and has had only grammatical and minor context updating. If you would like to participate in the 2018 OKR survey or you are a UK startup with a view on OKR goal setting or development methodology please get in contact. Thanks for reading! ƒ