tl;dr – Radical Focus is a great introduction to OKRs – a brilliant tool for goal setting.
The following review is also available as a podcast.
Today we will be looking at Radical Focus – a book which introduces the concept of OKRs – Objectives and Key Results and how they can be used in organizations as well as in our personal lives. Well, what are OKRs and how can they help you?
Let us consider these fictional situations.
You are part of a team and every day your team leader changes the priority. Something that was urgent yesterday is no longer so today or vice versa. Obviously, this is incredibly frustrating.
Or what about this?
You are in a team which is working hard, doing the right things and everything is going on smoothly. All your metrics are great, but you don’t seem to be selling more or your customers continue to be unhappy or maybe the rest of the organization does not understand what you are building.
How about this?
You attend your organization town hall or read a communication about the organizations goals for the next year. You are unable to figure out how this applies to you and you end up trashing the email or zoning out the boring presentation. Maybe you are the one who is communicating your strategy to your employees and they just don’t seem to be getting it.
All these situations have a common theme – how do we set goals for an organization and how do we achieve them. Also, how do we ensure that these larger goals are applicable to teams and to individuals so that there is alignment throughout the organization.
OKRs – Objectives and Key Results – are a fantastic way of achieving all of the above.
Before we do a deeper dive into OKRs, let us talk a bit about the book and its author, Christina Wodtke. The author has founded two consulting startups, led redesigns and initial product offerings at LinkedIn, Zynga, Yahoo! Amongst others. Now, she now runs her own consulting firm to advise startups to focus on execution by using OKRs.
Radical Focus is written in the ‘Business Fable’ style, popularized by Patrick Lencioni and Eliyahu Goldratt. Patrick Lencioni is famous for ‘Death by Meetings’ & ‘Five Dysfunctions of a Team’ and Eliyahu Goldratt for the ‘Theory of Constraints’ and ‘The Goal’.
Since it is a ‘fable’, the first two-thirds of the book focuses on a story that brings the need for focus & execution to the forefront and how OKRs can help in doing this. The last third of the book has all the theory and practical advice for implementing OKRs in your organization or your personal life. Radical Focus is a short book (at 167 pages) even with both these sections put together – about the same size as any of Patrick Lencioni’s books.
Let’s talk about the fable first before getting into the theory. A warning – there are minor spoilers ahead but nothing that should stop you from enjoying it when you read the actual book.
The fable is centered around Hanna and Jack. They come from different backgrounds but they both love tea. Hanna is an MBA and an American of Chinese descent who has grown up drinking her parents’ special tea. Jack is British, studying Human Centered Design at Stanford and, like Hanna, has grown up drinking tea. They realise that they have their passion for tea in common at a chance meeting in a café and decide to form a start-up – TeaBee. Their struggle to make things work forms the rest of the fable.
When they start TeaBee, their vision is to provide great tea to fine restaurants and discerning cafes. But. As time goes by, they find out that their current business model does not generate enough revenue and Hanna decides to pivot. By this time, she has found that she and Jack have different perspectives and priorities on what is important. They come to an understanding, pivot and then a new problem arises. Hanna gets frustrated by the lack of progress towards their goals as well as getting buy-in from the team. Their funder advises them about OKRs which they implement for the first time and fail spectacularly. A new CTO, Raphael who has been part of many startups, joins TeaBee. Raphael has seen OKRs work in his earlier workplaces and is able to guide Hanna and Jack on the correct implementation of OKRs. Flash forward to a year later and TeaBee is a successful business.
The narration is descriptive of the surroundings, the characters’ moods and their thoughts and makes you want to finish it in one sitting without taking a break. Anyway, back to the story of TeaBee, Christina Wodtke has used it as a very powerful means to explain something that we experience everyday – despite the passion and the midnight oil burnt, we have no idea whether we are closer to living our dreams or we are clueless as to what exactly we wanted to achieve – be it from an organization perspective or from our own.
And now, let’s get to the second portion of the book – the part with the theory & practice.
Let’s us start with four situations described before. Each of those has something to teach us. Generally, we are unable to achieve our vision due to a combination of five factors. They are
- Our goals have not been prioritized. If they have not been prioritized, we end up spending time on a lot of things, some of which are useful and some of which aren’t. I love this quote from civilization, the video game, which summarizes this sentiment well – a man who chases two rabbits catches neither.
- We have not communicated these goals well. Your goals should become part of your business as usual work. If they don’t, then these remain abstract and then you encounter situations like an end of period review where we figure out what we should have done in hindsight.
- We don’t have a plan. Unlike the Joker with his aversion to planners and schemers, plans are needed to achieve any goal. Nothing ever happens by serendipity. When was the last time a house built itself or a product have an increase in sales or you became fit by accident? Everything needs a plan.
- We haven’t made time for what matters. This is linked somewhat to the prioritization bit. Our lives are full of noise. If we do not filter out what is important and what is not, we will end up spreading ourselves too thin.
- We give up. I am a huge believer in the Lean Startup theory or the scientific method. There is no failure. There are only opportunities to learn.
So, what can we do?
First, have a clear vision. You can do this through several ways but ultimately it boils to down to what you believe in strongly. Next, comes the harder part which is executing your vision. This is where OKRs come in.
Objectives are qualitative and inspirational. They should set a bold goal, a time-bound goal. And this should be actionable by the ‘team’ independently. Some examples of good objectives given in the book are
- Transform Palo Alto’s coupon using habits
- Launch an awesome Minimum Viable Product.
Remember that objectives can be set at any level. But, within an organization, objectives at different levels should be aligned with one another.
Key Results quantify the inspirational statement. They are our yardstick to ensure that we have met our objective. KRs generally include measurable criteria like growth, engagement, revenue, performance, quality, etc. An objective should ideally have 3 KRs which should balance out opposing forces like revenue and quality or growth and performance. Coming back to the previous example, the book gives us these examples as KRs for the ‘Launch an Awesome MVP’ objective:
- 40% of users come back 2x in one week
- Recommendation score of 8
- 15% conversion
Also, KRs should be difficult but not impossible. This means that in an organization where failure is not tolerated, OKRs will not thrive. But in organizations where learning is rewarded and where a safe environment exists, OKRs will work well.
The author has put together a good mix of the theory, pragmatic advice about implementing OKRs as well as real life examples from a couple of organizations where OKRs have been put into practice. These real-life examples include implementing OKRs in cross functional product teams as well as linking company level objectives to support functions and combining OKRs with performance reviews. The pragmatic advice consists of figuring out OKRs, providing a framework to implement them and a compilation of quick tips on usage of OKRs drawn from experience. You will have to read the book to get a perspective on this.
OKRs are great because they are easy to communicate, they set a clear goal, they cascade well down an organization and they can become part of the business as usual work. But, like many simple things, implementing them will require dedication and hard work.
As you might have guessed by now, we highly recommend Radical Focus. It provides a great introduction to OKRs.
Thanks for reading this review and/or listening to our podcast! Please share your comments and feedback, we promise to act on them. Bye!
Also published on Medium.