Before talking about how OKR could help your startup achieve the ambitious goals, we need to understand why setting the goal is so important and why most of the startups or SMEs failed to grow.

One of my favorite sentences is ‘A journey of a thousand miles begins with a single step’ by Lao Tzu. This is such an inspiring quote which boosts Goalify to continuously carry out what we are planning. However, to prepare for every great adventure we all need to find out an exact way for organizing every step/plan of your business. Setting a goal is to discover what is the best for your organization, and this somehow avoids bad plans which make you and your team step into a vicious circle and might never break it out.

When it happens in your organization, it’s time for OKR to help with their best unique point.

1. Focus

Providing a clear target, timeframe and goal objectives so that each of the member in the company understands and take action.

The concentration on three to five first big goals is one of the most crucial factors that helps startups and SMEs stay away from the quicksand of little victory by means of some short-term strategies which could lead the whole big plan to a wrong direction. This happens due to the fact that new goals sometimes bump up in small and short-term strategy, and these recent goals may not always relate to or support the long-term goals. Furthermore, all the new goals could negatively affect and distribute your people to take on them.

As a result, the concentration to have a clear set of big goals and work on them to your employees is the most critical element so that your startup/SME could conquer victory.

2. Coordinate

The aim of clarifying and aligning your biggest goals with the rest departments/members of your company is to identify each one’s work and how they could contribute on the whole progress. Besides, from these major goals each unit of the organization could establish their own tasks to contribute to the company’s movement. On the other hand, every team could also control their ambitions and know exactly how these can affect others’ when we have them to be transparent. General speaking, startup/SME managers always talk about how they create goals for sales team, marketing team or production team and think it is OK if the rest of the company do not have any obvious goal or they assume that it is unnecessary to have some. In my opinion, it is a deadly wrong thought. Let’s take a small example to clearly see the problem.

Most of the time, companies pursue the goal that earning the highest revenue for their organization. So, when I aim for the target of $1 million in revenue, I will set some core objective for each team like:

Sale team needs to exceed the turnover of $1 million.

Marketing team needs to cover a significant number of potential customer to attract and then submit the data to Sale team.

Production team (if exist) has to ensure the quality and quantity of their products to get enough or even more than the expected revenue.

Nevertheless, other departments like HR, administration, accountant or finance (typically, in small company or startup, it’s the CEO or the founder who does the job) are confused with their own targets, this must, one way or another, be a big obstacle to the whole year plan of your company.

So, what are the damages that this obstacle causes?

Regarding to HR department, if there is no target in increasing the retention rate or increasing the connection status between employers and employees or between employees themselves then could there be a high productivity inside your organization? And if the turnover ratio is getting higher, what should be done?

Finance: What should you do when there is no detailed budget plan for each activity? Or how could you follow and make the best out of your budget?

When digging more and more into this, you must sometimes surprise and wonder why you refused to focus on these earlier.

3. Measure

Settle a clear, detailed and easy-to-understand core value to work out the ideal way and then you might get the expected goals or adopt way to measure all the result that your organization has achieved. You will be able to break down the idea of how you are operating this measuring step and reasons why most of the company could reach their absolute limit of success and then they could not crack this limit and gain the next level.

Those are the thoughts that bump up to me every time I have a chance to sit down and talk to some company owners or customers while I operate my own company - NÂU Creative - which is a company about innovation, hi-tech production and digital. I asked, “Where will you be in the next five years?”, most of the time they have common answers that “sale more”, or “upgrade and broaden my products area as many different segments as possible”. At a moment, their answers seemed very fine, but the problem is those answers were not objectives or could not be measurable at all. They, therefore, could not bring you your key results or determine your success. Some others who have better mindsets, sadly, they stop even before getting their goals, otherwise, they lay on others to sale their products/service and all the more, they do not know where is the end of this action. Both cases lead you to a serious failure and loss.

Updating, tracking and communicating in regarding to objectives and key results can create the daily routine for your team and become a part of your company culture. Regularly tracking OKR is the key to achieve the desired results.

Why most of the companies can reach some limit but can’t move up higher?

4. Discipline

Assuring the discipline has frequently been underestimated when your team/organization is still small because of the compliant or respect between each other. This somehow will become a dilemma, as a result, startups or small companies need to be serious in keeping track and measuring the key results and developing the habit of check-in/updating the outcome weekly.

And thanks to this updating task, managers now can estimate the situation and have a proper and immediate aid to stay away from obstacles. I am sure leaders or managers will not happy when hearing an employee reports that he or she could not complete the task after a long time from the starting point. This also a weakness of KPI compared to OKR, there is no responding and updating continually but only depends on the final report.

With OKR as a core concept of the operation, you can apply the 3-standard method below:

a. Market Potential Method

Being mostly used for businesses which are new or startups, who don’t have any historical data to make the project. To define market potential, you need doing your homework to understand the market potential size, applying SWOT to find out what is the limited factors that will keep you out of the whole picture to determine the entire market. With your team’s strength, how much penetration percentage can you achieve? Be realistic, don’t give yourself and your team a number that can’t be reached like 300% month over month. That will make you more stressful and burn out as well as pushing you to use the unsustainable methods, in order to get it like overspending for marketing, discounting incredibly, PR, etc. Doing it with 15-20% that aggressive enough and give you healthy results.

b. History Method

Your work will be much easier, just looking back last year’s revenue, and all what you need to do is increasing your potential market rate together with the total growing market rate.

c. Full-Time Equivalent (FTE) Method

Making a calculation to estimate how much your full-time operation cost. And putting it together with the number of sales you need making to see the break-even point. From there, you need to add the profit target to measure your goal that you want to achieve.

Remembering to track your OKRs all time, and continuously adjusting the key results with your team.

Planning well, being disciplined to stick with the scheme and implementing until you reach it.

Most people fail in life not because they aim too high and miss, but because they aim too low and hit - Les Brown

If you are new to OKR, find out clearly information with eBook “Everything you need to know about OKR”.