How Camber Leverages OKRs
Camber Partners works with SaaS businesses where we see promising potential for growth that can be unlocked through exceptional operational collaboration. At this milestone, it is critical to use or expand on a management framework that helps to focus everyone on the same opportunities. We’ve worked with dozens of fast-growing companies and a common framework for setting goals across the company is crucial to help the company scale.
The best-performing companies we know (Google, Facebook, Amazon, Slack) use OKRs. OKRs stands for “Objectives and Key Results” and is a framework for goal setting. OKRs were first used at Intel and popularized by Google. The popularization led to a book written by Venture Capitalist John Doerr.
The OKR framework focuses on aligning the company to higher level outcomes, not procedures, while also allowing teams to see how their work impacts the business. Doerr attributes the framework's success to five key benefits that can be realized by companies large and small: (FACTS) Focus, Alignment, Commitment, Tracking, and Stretching.
These are some of the key reasons companies have flocked to using OKRs and why Camber likes to introduce them to companies in its portfolio. Next we’ll talk a bit about what an OKR is. As mentioned before, OKRs stands for “Objectives and Key Results” which means there are at least two documented components to setting these goals.
The Objectives are the goals the company is aligned to achieve. These are often described as the outcome we are trying to achieve or where we are going. The Key Results are measurable metrics that show progress against the Objective. These are often described as milestones or ways to see if you are getting to the Objective. The format that OKRs were originally conceived in is: I will (Objective) as measured by (this set of Key Results). An example for SaaS:
For the time period that an OKR is set, it should be clear whether or not those outcomes were met [yes it was achieved or no it wasn’t]. And again, not all the tasks that are being completed will be represented in the OKRs.
In thinking about Key Results, the concept of KPIs often comes up. KPIs are “Key Performance Indicators” and help to track metrics over time. There are many things that can be tracked as a KPI to help the business understand the progress it is making. A KPI can also be a way to set Key Results as the measurable metric. However, focus is critical for setting KRs, whereas KPIs allow for broader tracking. And it is important to keep in mind that Key Results are not something that you do; they are the successful outcome of what you did that shows measurable progress toward the larger Objective.
At Camber, we like the OKR framework as it helps teams focus on the key things that can drive growth. Not only does it provide alignment for the company, it also provides alignment across investors, the CEO, and the leadership team. Clarity and transparency of what matters and how we’ve determined if we’ve achieved our goals help teams set expectations appropriately and execute toward the right objectives.
The conversations around what the team learns as they execute against OKRs is just as important as the setting and tracking of the OKRs themselves. Each company will identify a cadence to set OKRs as well as track and review initiatives at various levels. We like to use a quarterly OKR process to set goals because it strikes a good balance between adding processes while maintaining the nimbleness and adaptability that gives small companies an advantage over larger incumbents. We then have a twice-monthly OKR meeting to track progress, where each owner of a Key Result can report on progress made so far as well as what they have learned from those initiatives. Sharing learnings with the cross-functional leadership team helps accelerate the team towards completing their sharing objectives.
When working with portfolio companies, we like to take an evolutionary approach. In the initial quarters we like to keep it simple while the team learns and adapts to the new operating framework. As companies learn the process and get better at setting and measuring goals, we’ll begin to add additional considerations, such as the timing of estimated impact, to help build predictability into the business. It is not uncommon to iterate on the OKR process for 6-12 months as it takes a few quarters of setting OKRs and learning from the outcomes before a company settles into a long-term cadence.
Some companies that talk about their experiences with OKRs are:
Posted November 8, 2022
By Camber Partners