- How transparent goals can transform a business
- Align and win
- Cascading goals
- Bottom-up & cross-functional collaboration
How transparent goals can transform a business
In Waymaker's Goal module every goal is visible to every user regardless of their position in the business. Feedback and progress is available for all to see, and even comment on. Who is making the most contribution to the organisation, who has the best ideas, who is working on what… its all there for everyone to see.
If an employee is struggling to achieve their quarterly goal, their team and everyone else in the organisation know because they can see the progress. Knowing the person needs help, teammates and colleagues send messages of encouragement and offers of support. Transparency drives collaboration, which in turn strengthens working relationships and can transform teams and organisations.
Align and win
Once the 1, 2, or 3 organisational goals have been set for the quarter (Milestone Goals), its time for the team to tie their goals to these. This creates alignment within the business and alignment creates tremendous value within any organisation. The Leadership team align on the organisational goals for the period. Then the broader team aligns on how to best contribute to achieve those goals.
According to Harvard Business Review, companies with highly aligned employees are more than twice as likely to be top performers.
When senior execs set the organisational goals for the quarter and cascade them to their heads of department, who pass them to their management teams and so on, even the most junior employees can see their contribution towards the broader organisational goals. This connectedness breeds cohesion and leads to a sense of individual fulfillment. As one person achieves their goal, it contributes to their manager's goals, which roles up to their manager's manager's goals, this role up continues to the organisation wide goals.
When cascading goals is right... and wrong
Below is an example of a goal being cascaded through an organisation, and some supporting context, all taken from John Doerr's book, "Measure What Matters". John Doerr is responsible for OKRs being implemented at Google and many other highly successful organisations. He has used an imaginary football team in pitches to Google and many other organisations to demonstrate how the OKR system works effectively, and when it doesn't.
The General Manager of an American Football team has 1 goal, Make money for the owner:
- Make money for the owner
- Win Super Bowl
- Fill home stands to 90%
The key results, win the super bowl and fill the home stands to 90% are how the objective "make money for the owner" will be achieved. If both hows are fulfilled there's no way you're not making money for the owner.
The General Manager now cascades the top level OKR through the business. The next level of management consists of the head coach and senior vice president of marketing. The general manager's key results become their objectives. And the head coach and SVP of Marketing's key results become their direct reports objectives, and they in turn develop their own lower-level key results. On Waymaker, OKRs are related to each other using the nesting feature. Nesting an OKR in another creates a parent-child relationship between the OKRs and these relationships are exposed on the OKR Stream page:
While the coaching teams' key results are all measurable, the SVP of Marketing's key results are not. They're not specific or timebound. We could work on these and perhaps define what 'upgrade' or 'improve' means, however, there is another flaw. The top line objective, to make a wealthy person wealthier, lacks intrinsic motivation for the general manager, much less for the team's east coast scout or the PR intern.
In moderation, cascading objectives top-down can calibrate and align a business on what matters most so everyone is working towards the same goal. However, when all objectives are cascaded, the process can break down and stifle motivation. They become time-consuming as each level within the organisation waits for their managers' OKR to be cascaded. They become rigid as the effort to pivot or revise and re-align is too time-consuming. Cross-functional collaboration and input from employees further down the food chain is lost which reduces the interconnectedness OKRs are capable of fostering.
Bottom-up and side to side
Because OKRs are transparent on Waymaker you don't have to cascade from top to bottom. Sometimes it is right to cascade from the top, but you can miss levels of hierarchy, cascade to an individual or specific team. It's not always the leadership team that have the best understanding of the terrain around them. Customer success teams will generally be the people who discover issues, especially systemic issues. A sales person may have a better understanding of customer needs and demands.
Transparency allows for the whole business to understand the core OKRs for the period, and then, where empowered, the staff can develop their own OKRs that align and contribute. It could be the OKR is not directly aligned to a person's manager's OKRs, but could be aligned to the overarching 5 year strategic objective or even an Execs OKR. This is the recommended approach to setting OKRs, a hybrid model of top down, bottom-up, and side to side.
Staying with John Doerr's example, say the football team's physical therapist attends a sports medicine conference and learns of a new regimen for injury prevention. Of her own volition, she creates an off-season OKR to implement the therapy. Her OKR may not align with her direct manager's OKR, but it aligns with the general manager's overarching objective. If the team's top players stay healthy through the season, the team's chances of winning the Super Bowl increase.
And whether we like it or not, the success of any business is due largely to its interconnectedness. A sales team cannot sell without product, a product team cannot develop and realise their vision without the engineering team and customers cannot be retained and serviced without a customer success team. Cross-functional collaboration not only brings people and teams together, it also removes silos and the potential for duplicated work, or worse still, unnecessary work.
When Customer Success collaborates with product managers, the product manager gains insight into the voice of the customer, and the customer success team gains an understanding of the nuts and bolts of product features. It can increase delivery speeds and reduce risk by removing the hand-off moment. John Doerr quotes Laszlo Bock, former head of Google's People Operations, as saying, "People across the whole organisation can see what's going on. Suddenly you have the people who are designing the handset reaching out to another team doing software, because they saw an interesting thing you could do with the user interface".
As Laszlo observes in Work Rules!:
Having goals improves performance. Spending hours cascading goals up and down the company, however, does not... We have a market-based approach, where over time our goals all converge because the top OKRs are known and everyone else's OKRs are visible. Teams that are grossly out of alignment stand out, and the few major initiatives that touch everyone are easy enough to manage directly.
John Doerr is the author of Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. The above article borrows a lot from Chapter 7 of this bestselling book. If you want to learn about OKRs we highly recommend John Doerr's 'Measure What Matters' as a starting place.