Names, OKRs, and dates are changed to protect client confidentiality. This case study assumes a basic understanding of Objectives and Key Results (OKRs). If you’d like a shallow dive into the deep topic of OKRs, we’ve summarized Measure What Matters by John Doerr into a short set of crib notes here.
London-based ACME-Payments (ACME), a B2C fintech company, aimed to solidify its position in the market by delivering exceptional end-user experiences. In 2021, after researching different management systems, ACME implemented an Objectives and Key Results (OKRs) framework to accelerate growth and enhance its strategic direction.
However, after the initial year of OKR implementation, growth stagnated, prompting the company to approach the Sphere Partners Tech Executive Advisory service for an in-depth analysis of its OKR implementation. “We recognized the power of OKRs, but the execution was off, resulting in a slowdown of our momentum,” said Susan Walker, ACME’s CEO.
Challenge
ACME faced critical obstacles in their existing OKR framework that hindered the company’s expansion. The primary goal was identifying and rectifying these issues, and optimizing their OKR implementation to support stable, substantial growth.
Solution
Utilizing a comprehensive approach, Sphere rigorously analyzed ACME’s OKR implementation by conducting structured interviews and surveys with company leaders and team members, both individually and collectively, gleaming valuable insights that enabled them to identify and pinpoint four main problems:
Issue 1: Too many OKRs
ACME’s enthusiasm for new opportunities led to the creation of 6 objectives and 17 key results, which weakened the emphasis on high-priority goals and significantly burdened the limited capacity of the product and engineering departments. Moreover, the company should have accounted for product maintenance tasks requiring 40-50% of engineering capacity, which left scarce resources for additional key results.
Sphere recommended that ACME’s executive team prioritize the 3-5 most impactful company goals as OKRs, then focus on achieving 2-3 objectives and 5-7 company OKRs, taking into account a more targeted approach and capacity constraints.
Issue 2: Lack of functional OKRs
ACME’s clients are medium to large enterprises with strict security and compliance demands. ACME leadership mistakenly believed that the product and engineering teams would address all concerns regarding security and compliance. Still, the engineering team missed crucial features, causing delays in product adoption.
Sphere pinpointed the critical issue – ACME had only company-level OKRs, leading to disconnected departments and no clear ownership of objectives. Establishing alignment and connectivity between departments and individuals is vital. To ensure accountability, Sphere recommended adopting department-level functional OKRs, facilitating timely identification of missing features, progress tracking, and easier intervention when needed.
Issue 3: Unmeasurable OKRs
To increase product visibility and attract new customers, ACME launched a marketing initiative to boost brand recognition. The original OKR of “improve brand awareness” was immeasurable, causing issues like unclear resource allocation, indefinite endpoints, reduced team motivation, and difficulty tracking progress.
To address these challenges, Sphere proposed a revised and measurable OKR: “Boost mobile web traffic by 20% (from 100k to 120k unique visitors monthly) during the upcoming quarter to enhance brand recognition.” This new specific and measurable OKR improved accountability and clarity for the entire team.
Issue 4: Company OKRs Not Written in Business Terms
During retrospective interviews, ACME identified low customer satisfaction on its mobile app. Thus, they created an OKR to “improve NPS from 15% to 25% by developing a new payment feature for the mobile app in the next six months.” The executive team decided to introduce a new payment feature, believing it would increase customer satisfaction. However, focusing on a specific feature based on gut instincts and being “feature-focused” posed risks, and this approach ended up resulting in limited impact.
Sphere proposed rewriting the OKR to emphasize business terms and a stretch goal, aiming to boost the app’s NPS from 15% to 35% within the next two calendar quarters. This approach encouraged experimentation and hypothesis testing, pushing the team out of their comfort zone to achieve remarkable results even if the stretch goal was not fully reached.
“The mistakes made by ACME in establishing their OKR frameworks are common among numerous clients we advise – a strong eagerness to adopt OKRs, but flawed execution, potentially hindering growth. Setting structured objectives is crucial, yet improper execution may result in stagnancy or, in some cases, negative outcomes for the organization,” explained Boris Korenfeld, CTO and GM of Tech Practices at Sphere.
Outcome
In close collaboration with ACME stakeholders, Sphere devised a practical plan to revamp the company’s OKR structure, leading to significant improvements across multiple dimensions:
- Focused Objectives: By reducing the number of OKRs, ACME zeroed in on high-priority goals, effectively allocating resources and strengthening core initiatives.
- Departmental Synergy: Introducing department-specific OKRs fostered a sense of accountability within teams, and integrating functional OKRs aligned departments and bolstered overall performance.
- Trackable Goals: Adopting quantifiable, data-driven OKRs allowed ACME to gauge progress and make data-informed decisions, with clear benchmarks guiding ongoing enhancements.
- Business-oriented OKRs: Reframing the OKRs using business-focused language tied objectives to company challenges, enabling teams to innovate and address issues to expedite growth.
Leveraging Sphere’s expertise, ACME saw business revenue on an upwards trajectory to rise by 25% within the year, outperforming initial growth projections. The reimagined OKR framework set a strong foundation, attracting new clientele, refining internal processes, and ultimately positioning ACME for success in a competitive landscape. “Our collaboration with Sphere has been a game-changer, unlocking our true growth potential,” noted Susan Walker, ACME’s CEO.
To avoid these common OKR mistakes and optimize your company’s growth, contact Sphere’s Tech Executive Advisory service to get started.
