How to Set & Achieve Big, Hairy, Audacious Goals - Part 2 of 3 (OKRs)

In the simplest form, your ability to set and achieve goals will determine your level of success.

Not setting goals practically guarantees failure.

Setting too many goals risks not accomplishing any of them.

Setting too few goals risks not hitting your Big, Hairy, Audacious Goal (BHAG).

Last week, I started a 3-week series on setting and achieving BHAGs, starting with the principle of Setting Cascading Goals.

This week, I'll explain how to break down your BIG VISION into one-year goals using OKRs.

Eating the Elephant

You may be familiar with the old saying, "How do you eat an elephant? – One bite at a time."

In a nutshell, that's what great leaders and teams can do. Take an elephant-sized vision and break it down into bite-sized pieces.

We often know the long-term vision, but being able to show your team the big vision and then direct them on the first bite to take is where leaders fail. I can almost hear the desperate cries of businesses that failed to tackle the elephant:

1. We're going to become the world's leading ...
2. Let's generate $100M in revenue by ...
3. We can develop the cure for ...

When we are unable to break down these elephant-sized visions into bite-sized pieces, our teams struggle to know what to do next. So, they try to eat the whole elephant in one sitting, get frustrated, and burn out.

10 Years → This Week Doesn't Work

We can also make the mistake of trying to jump directly from our BHAG to what needs to happen this week.

Most people can't make that leap. That's why before you begin crafting your OKRs, you need to ensure that you not only have a 10+ year BHAG but also know how that breaks down into 5 and 3-year visions as well.

This is where the 10/5/3 Year Vision structure comes into play. It takes the 10-year BHAG and takes the first steps of painting a picture of what is possible in just 3 years—a timeframe that, although still a way out, is close enough to truly imagine where you could be.

Remember, as the leader, you know exactly where you want to go. But your team doesn't. It's upon you to cast the vision in a digestible way to gain ultimate team buy-in.

If you haven't yet, I encourage you to at least familiarize yourself with the 10/5/3 Year Vision concept before tackling OKRs.

How to Set a 1-Year Plan Using OKRs

So, assuming you have your 3-Year Vision set, let's develop a 1-year plan using OKRs.

Part of the 3-Year Vision is setting 3-5 attainable goals that ultimately define the outcome, or success, of the 3-Year Vision. In my previous article, we used the example of my make-believe SaaS Company, where we set the following:

• 10-Year Vision: Leading SaaS Platform for innovative business solutions worldwide.
• 5-Year Vision: Achieve $10M annual revenue with cutting-edge SaaS offerings.
• 3-Year Vision: Triple user base and launch two groundbreaking features.
• 3-Year Outcomes (what defines success): 
  • Reach $5M in annual revenue.
  • Expand customer base to 10,000 active users.
  • Develop and launch AI-powered analytics feature.
  • Enhance CSAT with a 95% retention rate.
  • Establish a robust partner ecosystem.

With such clarity established, we'll start setting our 1 Year OKRs by defining Objectives.

Setting Objectives

Objectives are the inspirational, qualitative goals that you want to achieve in the upcoming year. They should be ambitious yet attainable, and they need to align closely with your 3-Year Vision. For our SaaS Company example, our Objectives might look like this:

1. Expand Market Reach: Grow our presence in the North American and European markets.
2. Innovate Product Features: Launch our AI-powered analytics feature.
3. Enhance Customer Satisfaction: Improve our customer support and retention strategies.
4. Strengthen Partnerships: Build strategic alliances with key industry players.

Each of these objectives provides a clear direction and aligns with our longer-term vision. Now, let’s translate these objectives into measurable Key Results.

Defining Key Results

Key Results (KRs) are specific, measurable outcomes that indicate progress toward achieving your objectives. They should be quantifiable and time-bound, allowing you to track your progress over the year. Here’s how you can break down the objectives into Key Results:

Objective 1: Expand Market Reach

• KR1: Increase North American user base by 50%.
• KR2: Enter the European market and acquire 1,000 new users.
• KR3: Boost website traffic from target regions by 75%.

Objective 2: Innovate Product Features

• KR1: Complete development of AI-powered analytics feature by Q2.
• KR2: Beta test with 200 select users by Q3.
• KR3: Fully launch AI-powered analytics feature by Q4.

Objective 3: Enhance Customer Satisfaction

• KR1: Achieve a customer satisfaction score of 90% or higher.
• KR2: Reduce customer churn rate to below 5%.
• KR3: Implement a new customer feedback system by Q1.

Objective 4: Strengthen Partnerships

• KR1: Form partnerships with at least 5 new industry-leading companies.
• KR2: Develop co-marketing initiatives with 3 key partners.
• KR3: Generate $500K in revenue through partnership channels.

Implementation and Monitoring

Setting OKRs is just the beginning. The real work lies in implementation and monitoring. Here’s a step-by-step guide to ensure your OKRs drive results:

1. Communicate and Align: Make sure every team member understands the objectives and their role in achieving them. Regularly communicate progress and challenges.
2. Set Cascading OKRs: Once OKRs at the executive level are set, each of the executive's teams is to set their own OKRs that support their executives. This carries on all the way down the hierarchy, until every team member has at least one Key Result they are responsible for.
3. Track Progress: Use OKR tracking tools or software to monitor progress on Key Results. Report on progress as part of your Weekly Huddle agenda.
4. Foster Accountability: Ensure every Objective and Key Result has an owner who is responsible for making sure the OKRs are achieved. 
5. Celebrate Wins: Acknowledge and celebrate when milestones are achieved. This keeps the team motivated and reinforces the importance of their efforts.

Course Correction

As the year progresses, you might find that some Key Results are not on track. Don’t be afraid to course-correct. Adjust your strategies, reallocate resources, or redefine Key Results if necessary. The flexibility of OKRs allows for dynamic adjustments, ensuring that you stay aligned with your overarching vision.

By setting clear, actionable OKRs, you bridge the gap between your 10/5/3 Year Vision and the daily actions of your team. This structured approach not only keeps everyone focused but also drives tangible progress toward your long-term goals. Remember, the key to successful OKRs lies in setting ambitious yet attainable objectives, defining measurable Key Results, and maintaining a disciplined approach to implementation and monitoring.

With these strategies in place, your team will be well-equipped to tackle even the most elephant-sized visions, one bite at a time.

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