How do you measure your business strategy? I know, what a horribly cliche sounding question. But seriously, how are you measuring what you do so you know what’s working and what’s broken? I came across a brilliant idea to create clarity in your business strategy by reading a book about none other than Google.
In the book “In The Plex. How Google thinks, works, and shapes our lives Steven Levy talks about how Google introduced the concept of outcomes and key results (OKR). John Doerr, one of the early Venture Capitalists who was an investor in Google, nudged them towards adopting the concept after Andy Grove at Intel also adopted a similar strategy to create clarity in their business strategy. The original idea of management by objectives came from a 1954 book written by Peter Drucker called ‘The Practice of Management’.
John Doerr later said; “Google not only adopted it, they embraced it.”
And why wouldn’t they? A system to enhance transparency throughout a large company, creating a ultra-clear vision of where they are headed and a deeper understanding of what their priorities are. Sounds like an easy choice to me.
OKR’s are a very smart way to look at your own strategy. They force you to measure something and apply it to your vision of what you want to become. It creates a feedback loop from employees as well, if they are overachieving and getting 100% on their OKR’s more projects are assigned. Conversely if an employee is lacking in their completion rate then management needs to review the workload and determine the reason for the lack luster performance. It takes the guessing out of managing. You no longer need your employees to be in the office at 8:00 as long as they deliver on their OKR’s each month than they choose their schedule. Use data to make your decisions not intuition or experience.
There’s something more to managing this way. You give employees the trust that they will deliver on the tasks you set out for them and let them complete the task in any way necessary. Obviously you set guidelines but giving employees the autonomy to work on their own projects will increase their productivity, a very measurable outcome.
So what does an OKR look like? Well it has to be quantitatively specific and there must be a deadline.
Increasing your Google Page Rank from 2 to 6 in 18 months.
Generating 2000 visitors in search engine traffic by December.
Increasing the amount of people going to your ‘contact us’ page by 50% in three months.
Increasing foot traffic through your store by 200 people a week during the winter months.
Decreasing service calls by 50% by January 2012.
Increase lead generation (people calling or e-mailing about your services) by 25% monthly.
Get an additional 10 e-mail newsletter signups every month.
Decrease overhead by 10% every year.
Decrease bad dept by 20% in 2012.
Increase employee satisfaction (on a scale of 1 to 10) by 2 points in 2011.
Increase online sales by 20% every quarter for 2012.
Decrease accounting expenses by 20% in 2012.
Increase spending on “client care” by 50% in 2012.
Achieve a 98% customer satisfaction rating by 2013.
What if you didn’t do anything but set the direction of your company and work with your staff to set their own outcomes and key results that fit into your future vision of the company, then left your employees alone. What if you try to dig deeper into your business and try determine what some key outcomes would be? Seems like a great opportunity to increase morale and take your business to a new level.
If you liked this post you’ll probably enjoy:
It’s the ROI Stupid! (more on measurement)
The New Definition of Strategy (on strategy, how it’s changed and what you need to know)
If You Can Fill In The Blanks You Don’t Need a Strategy (Some difficult questions you need to ask yourself about your business)