Is there a better way to create a successful financial planning business?
The simple answer is yes, use OKRs. Airbnb, Google, Intel, LinkedIn, Twitter, and Uber all use objectives and key results (OKRs) to drive their success.
You can too. The good news for financial planning businesses is that OKRs can be easily adopted, regardless of the size of the business, without adding significant new costs or overheads.
OKRs were developed in the seventies by Professor Andy Grove at Intel as a goal-based management framework that helps companies implement and execute strategy while keeping everyone motivated.
How do traditional OKRs work?
With OKRs you simply ask two questions:
- What does the business want to achieve? This is your objective.
- How is the business going to get this done? These are your key results.
As such, “OKRs comprise of an objective – a clearly defined goal – and 3–5 key results – specific measures used to track the achievement of that goal”. (Doerr, John (2018). Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. Penguin Publishing Group. p. 31).
Objectives are significant, concrete, action-oriented, and inspirational. Key results are specific and time-bound, aggressive but realistic, measurable and verifiable. The beauty of OKRs is that they can be set at any level; business, team or individual.
How does a business adopt OKRs?
It’s simple really. Company objectives are set at annual and quarterly planning meetings. These feed into annual and quarterly team strategy meetings that set departmental objectives. These in turn feed into one-to-one meetings where individual annual and quarterly team member’s objectives are set. Everyone in the business is on the same page and knows how they are contributing to the business’ objectives and how the achievement of these will be measured.
Similarly, at times, objectives set at an individual level may become company objectives. In fact, this is how Gmail came into existence, so it’s a two-way process. A desire of a single individual in the firm to make an improvement may turn into a major business objective. (You can read the story of Gmail here).
How have OKRs evolved?
John Doerr is a successful investor and venture capitalist who has funded the likes of Google, Amazon, and Intuit. John is the author of “Measure what matters” and an evangelist for OKRs. Building on the work of Andy Grove at Intel, John has taken OKRs one step further asking at a TED talk in 2018 why “our leaders and some of our great institutions are failing us”? John argues that our leaders and institutions are failing to set meaningful and audacious goals, their what, how and why are not clearly defined, and they are not creating “the right goals for the right reasons”.
John suggests you ask three questions to set the right goals?
- What do you/your team/your business want to achieve?
- How are you/your team/your business going to do this?
- Why is this important to you/your team/your business?
Adding the Why to the OKRs makes them more ‘sticky’ and inspiring, creating momentum in your business.
What makes OKRs different from other goal setting systems?
With OKRs you get FACTS:
✅ Focus – having OKRs gives a business exceptional focus.
✅ Alignment – OKRs are linked to strategic goals and refreshed on a quarterly basis, making the business more agile and strategic in facing challenges in a changing business environment. Because the OKRs are transparent and everyone in the business can see them, businesses get a high degree of strategic alignment.
✅ Commitment – everyone in the business commits to their own OKRs, the goals being a kind of social contract between everyone, this gives a high degree of commitment across the business. Everyone can see everyone else’s key results and how they relate to their objectives and their commitment to the overall strategic goals of the business.
✅ Tracking – everyone can track everyone else’s progress as they update their key results.
✅ Stretch – the idea is to build a risk-taking culture, where it’s okay to stretch for something almost impossible to do and not quite make it, but, still have a considerable accomplishment. At Google, if you’re achieving all of your goals, and you are getting all greens (using the RAG status Red/Amber/Green 🚦) your goals are perceived as not being ambitious enough.
OKRs are easy to understand, everyone knows the business objectives and whether they are being achieved or not.
Can you give me a real example of OKRs in action?
Yes. In 2008, a Googler named Sundar Pichai took on an objective to build the world’s best ‘next generation’ browser (Google Chrome). After much thought he chose his key results for ‘measuring the world’s best browser’ as the numbers of users, because ultimately, it’s global users who decide if Chrome is a great browser or not.
So, Sundar had one three-year-long objective to build the world’s best ‘next generation’ browser and every year Sundar stuck to the same key result, number of users, which he increased incrementally. In the first year, Sundar’s goal was 20 million users. He missed it. He got less than 10 million users. Despite this result in the second year, Sundar set his sights on 50 million users. He got 37 million users that year. Somewhat better, but, still off target. In the third year, Sundar upped the target once more to a hundred million users.Google launched an aggressive marketing campaign, broadened the distribution network and improved the technology. Sundar got 111 million users that year, exceeding his hundred million users goal.
Sundar’s objective was audacious, building the world’s best ‘next generation’ browser. A significant, concrete, action-oriented and inspirational objective. Sundar’s key results were specific and time-bound, aggressive and realistic, measurable, and verifiable. This is a great example of what the OKR goal setting system can achieve.
Can one rock star make a difference? ⭐️
Let’s leave the last word on OKRs to Bono, an unlikely user of Objectives and Key Results. For years, Bono, through his ONE organisation has used OKRs to wage a global war against poverty and disease setting two significant objectives: to end extreme poverty and preventable disease by 2030, so that everyone, everywhere can lead a life of dignity and opportunity.
“So you’re passionate? How passionate? What actions does your passion lead you to do? If the heart doesn’t find a perfect rhyme with the head, then your passion means nothing. The OKR framework cultivates the madness, the chemistry contained inside it. It gives us an environment for risk, for trust, where failing is not a fireable offense. And when you have that sort of structure and environment and the right people, magic is around the corner” – Bono
With OKRs and the right people the magic is around the corner for you too (pun intended). If you or your business are looking to create concrete, significant, action oriented and inspiring objectives why not check out OKRs.
📝 Your homework questions:
- Can you write down your business’ objectives and 3 to 5 key results per objective that show your business is reaching these objectives?
- Are your objectives concrete, significant, action oriented and inspiring?
If you are a member of our Master Practitioners Club, you can learn more about the topic in one of our videos titled “OKRs vs KPIs”.
If you are not a member, why not consider joining us now 👉 htps://rie.solutions/services/master-practitioners-club/.