by Managing Director Adam Barty
At some point in its journey, almost every business that is rapidly scaling is faced with the challenge of transitioning from the fairly basic strategic planning frameworks that it launched with, to an enterprise-level business strategy. For our business, that time came at the close of 2019, and the approach we chose to take provided us with some valuable lessons: namely, that the process of implementing that new strategic framework can be just as beneficial as the ongoing results it delivers.
As I reflected on how our agency was travelling, there was a mix of satisfaction and anxiety. While we were coming off three years of robust growth, doubling our size in terms of staff and revenue, if we are honest with ourselves, the growth had been accomplished in an relatively ad hoc manner. It was driven by sales wins and service expansions that had not been strategically planned. There was no doubt we had worked hard for the success, but there were questions as to whether we could keep riding the wave or if it was time to invest in developing a more formal business strategy.
This wasn’t the first time we had attempted to create strategic plans for the business. But prior attempts tended to be time-consuming exercises that rarely provided any value, and the traditional business planning approaches we used didn’t feel like they translated well to how our agency ran, something I’m sure many leaders can empathise with.
Traditional planning process often involved making numerous contentious assumptions that, when they failed to materialize, rendered the foundation of our plans obsolete.
Moreover, our approach was management-centric, with only the a few senior leaders involved in crafting the plans and minimal information trickling down to other leaders and even less reaching the broader team.
With a growing sense that our previous approach wouldn’t cut the mustard if we wanted to have another three years of equally strong growth, I began exploring different business strategy frameworks. This search led me to the concept of Objectives and Key Results (OKRs), a goal-setting framework that has been widely adopted by industry icons like Google, Intel, and LinkedIn.
Embarrassingly, after nearly two decades in the tech industry, I was unfamiliar with OKRs at the time. However, I became convinced that they would be the ideal framework for our business to ensure we could continue to thrive in the constantly evolving digital space.
OKRs were introduced in the 1970s by Andy Grove, the CEO of Intel, and later popularized by John Doerr, a venture capitalist who introduced the framework to Google. OKRs are a goal-setting framework that helps organisations define their strategic objectives and measure their progress towards achieving them. Objectives are defined as high-level, qualitative stretch goals, while key results are specific, quantifiable, and time-bound metrics that track the progress (and hopefully success) of each objective.
OKRs have been around for a while and the data that has been analysed on their effectiveness makes for pretty compelling reading. Indeed Google attributes much of its 20% revenue growth rate between 2005 and 2015 to the organisation-wide use of OKRs. The academic research offers similarly impressive stats. A Harvard Business School study found companies using the OKR methodology experienced a 69% increase in employee alignment and engagement, while a Deloitte study found that businesses that properly implemented specific, ambitious goals through OKRs saw a 64% increase in performance.
So, in February 2020, we introduced OKRs to our team during a town hall meeting, outlining our ambitious objective to double the agency's size over the next three years using this new goal setting framework. Unfortunately in the following weeks the global pandemic forced us to shift our focus, and it wasn't until later in 2020 that we began implementing OKRs across the business.
Adopting OKRs in an established business is notoriously challenging, and our initial implementation was somewhat clunky, over-engineered, and underwhelming. Almost three years later, we are still working towards seamlessly integrating OKRs into our daily operations.
One of the most significant obstacles we have faced has been finding the time to prioritise OKRs across the organisation. In a professional services business, employees are perpetually busy. Carving out time for quarterly OKR planning and progress is no easy feat.
Looking back at our own journey for the FY22 year makes for some difficult reading, our completion rate for objectives was far from perfect, with our best-performing objective only reaching 79% completion. Several objectives fared worse, such as “evolving our service offerings” (45% completion) and “expanding our agency footprint” (0% completion). In some ways this progress was unsurprising given we only managed to complete just over half of the mandated quarterly planning sessions.
So as I began our 2023 planning, I was feeling pretty disheartened and caught myself suddenly questioning the usefulness of OKRs for our business. However, after stepping out of the OKR reporting minutia and looking at business performance overall, it struck me that many of the ambitious objectives we set in our FY22 OKRs have now been accomplished, just not within the timeframes we set. Achievements like attaining ISO 27001 certification, implementing new CRM, ERP, PM, and accounting systems, as well as our agency’s expansion into Queensland all sat within those failed FY22 objectives listed earlier.
Had we not had OKRs to initially force us to consider what our overarching business objectives for the coming one, two and three year time horizons should be, or if they hadn’t been there to keep us organisationally aligned on working towards achieving them, then I highly doubt we would have achieved any of them.
Although there is still more for us to gain from fully embracing OKRs, and our business has a long way to go in terms of efficient and effective usage, it is undeniable that our OKR program has been instrumental in driving progress and propelling us towards our ambitious goals. Despite the challenges and occasional setbacks, the OKR framework has helped us develop a clear vision, alongside a structured roadmap, and proved to be a motivating force to turn our aspirations into realities.
While our journey with OKRs to date has been a little bumpy and frustrating at times, it’s pretty clear that our agency and all of our team are in a far better place than we otherwise would have been without them.