OKRs – Objectives and Key Results – Esbe – NOV 2021

Introduction to Esby's Presentation

Overview of Esby and Onfolio

• Esby is the CEO of Onfolio, managing a $7 million portfolio of digital businesses.

• Onfolio is on track for an IPO in Q2 2022; Esby has experience building online businesses over five years.

• The company has grown from a team of five to over 30 members, achieving a 7x increase in monthly recurring revenue (MRR).

• Based in Queenstown, New Zealand, Esby enjoys strength training, hiking, skiing, and is training for her first half marathon.

Using OKRs at Onfolio

Introduction to OKRs

• Esby discusses the importance of Objectives and Key Results (OKRs) in aligning team efforts and measuring success.

• She emphasizes that her presentation will include specific examples of effective and ineffective OKRs used within her company.

Contextualizing OKRs

• As a holding company, Onfolio implements OKRs at both the management level and across acquired businesses.

• There was a need for clarity on team objectives as previous efforts felt misaligned despite high performance.

The Origin and Structure of OKRs

Historical Background

• OKRs were introduced by Andy Grove at Intel and popularized by John Doerr's book "Measure What Matters."

Components of OKRs

• Objectives are qualitative goals meant to be motivational; key results are quantitative metrics that measure achievement.

• Effective use involves setting lofty objectives alongside measurable key results to ensure alignment across teams.

Onfolio's Executive Objective

Current Focus

• The executive objective for Q4 2021 is to prepare for an IPO while ensuring pride in the company's public image.

High-Quality OKRs and Their Impact

Example of a High-Quality OKR

• A subsidiary CEO aims to build a stable, cash-flowing portfolio for the holding company, which is motivating and aligns with the company's objectives.

• The CEO's personal pride in his portfolio contributes positively to the company's goals, indicating that individual motivation can enhance overall performance.

• He plans to add $10K per month in dividends to support the holding company; however, he has only logged $10K out of a targeted $30K halfway through November.

• This discrepancy will be addressed in an upcoming one-on-one meeting to assess progress and accountability.

Example of a Poor Quality OKR

• A department head's objective focuses on improving departmental quality for IPO readiness but lacks clear metrics for success.

• While his motivation is commendable, key results are vague (e.g., "road traffic for non-operated lead assets"), making it difficult to measure success objectively.

• Developing standard operating procedures (SOPs) is another goal; however, without measurable outcomes, it's hard to verify effectiveness or impact.

• Subjectivity in measuring success undermines accountability; relying solely on self-assessment can lead to unclear evaluations of performance.

Common Mistakes with OKRs

• Cascading OKRs from management downwards can stifle creativity and autonomy within teams if overly controlled by upper management.

• It's essential for direct reports to create their own objectives that align with company goals rather than simply following top-down directives.

• Encouraging ownership allows teams to use their language and set priorities that resonate more deeply with their work processes.

Importance of Transparency in OKRs

• Sharing objectives across teams fosters alignment and focus; hiding them reduces visibility and diminishes effectiveness by 50%.

• Too many OKRs can dilute focus; prioritizing fewer objectives allows better resource allocation towards achieving those goals.

Quarterly Review Process

Understanding OKRs and Team Empowerment

The Importance of Short-Term Goals

• Acknowledges that a year is too long for goal-setting in a rapidly changing company, suggesting that quarterly goals are more effective for tangible progress.

• Emphasizes the role of Objectives and Key Results (OKRs) in empowering teams to set their own objectives, fostering alignment with the company's overarching goals.

Encouraging Ownership and Focus

• Highlights the challenge of ensuring team members focus on company goals rather than personal interests, stressing the need for clear direction.

• Describes OKRs as commitments of intent from teams, advocating for intentionality in setting these objectives to enhance organizational alignment.

Integrating OKRs into Existing Systems

• Suggests that organizations can incorporate OKRs into various existing frameworks like EOS, emphasizing their flexibility compared to other systems.

Software Tools for Managing OKRs

• Introduces Koan as a user-friendly software tool for managing OKRs, noting its recent stability after being acquired by a larger competitor.

• Mentions Koan's straightforward interface and features that facilitate team engagement through regular updates.