- Successful startups get things done.
Today I'm gonna show you the system
that we've used for the past five years
to really get things done.
This is Raw Startup.
I'm the founder of Vivino.
And when we launched Vivino
there were 600 wine apps in the app store.
There was fierce competition.
Today we're 10 times bigger than number two.
We have 33 million users and 20,000 people
install Vivino every single day.
We've used the OKR system for the past five years.
I believe it's one of the reasons why we really won.
We got things done and we got the right things done.
Today I'm gonna show you a seven-step process
to help you implement OKRs in your business.
There's always this one project
that just doesn't get done.
A few years ago we were releasing
a new version of our website,
and we just couldn't get it to release.
We were an app company and everything focused on the app.
On top of that, we just had too many projects.
We'd reached 20 people or so,
and we knew we needed some kind of system
to manage all these projects.
That's when we implemented the OKR system,
we got the website released,
and today I'm gonna show you exactly how to be more focused,
get more done with the OKR system.
First and foremost, let's do an eight-second history lesson.
OKR stands for objectives and key results,
invented by Andy Grove, co-founder of intel,
evangelized by John Doerr,
and made famous by Google.
Google has used them since 1999
when they had 40 people.
They still use OKRs today with 60,000 people.
OKRs can be used in any size of company.
That's the history lesson for today.
At Vivino we used OKRs to run
our projects in quarterly cycles.
It worked incredibly well.
Let's take you through the seven step process.
Let's start with number one.
Step number one, set the high level objectives.
Too many companies try and do 10 things at the same time.
Don't.
Do one or two things and have everyone run towards that.
It is so much more efficient.
For this OKR process, this high level
is the foundation of everything so you have to do it right.
Let's get started.
Setting the high-level objective
is usually done by top management,
two or three people in the leadership team.
That doesn't mean you don't listen to everybody else,
you certainly do, but in the end it's set
by two, three people in the top management.
So the question is, what is
the primary objective for this quarter.
For us it was usually one or two things
with the primary high-level objectives for that quarter.
Here are some examples.
In Q2 of 2016 we wanted to monetize better
as well as improve the net promoter score.
Very clear objectives for that quarter.
Later in Q4 of 2016 we also set some very clear goals.
We wanted to be profitable in November,
and we wanted one day with at least a thousand orders
on our marketplace.
Both clear and measurable goals.
For this video I will use an example
we can use throughout the video.
We will have an E-commerce site that sells T-shirts.
And so let's start by setting
the high-level objective for the quarter.
In this case we want the objective to be
to increase the sales by 20%.
We start by making a slide
with the company objective and add it.
So now there we have it.
The high-level objective.
Let's move on to step number two.
Step number two, break the objectives down
to projects and key results.
Now you have the high-level company objectives.
Let's break that down to projects.
At Vivino we usually do three to six different projects.
It all depends on how big the company is,
how much bandwidth you have.
But don't do too many projects.
It becomes very clear when
too many people are on too many projects.
So don't do it, nothing will get done.
So now things are getting interesting.
We're gonna take it down to project things
that we actually wanna do.
We want projects that help us
reach the high-level objective.
This is still the top management that does this.
We'll wait a little bit before we take it to the teams.
To keep things simple for our test project,
we'll only do one.
And that project is to start selling polo shirts.
And now we add the project to the company objective slide.
As you can see here we now have a separate slide
for the new project called start selling polo shirts.
Before we start adding the key results,
let me stress you don't put all projects into OKRs.
OKRs are for new stuff, things you're building,
innovating, new business.
That's what OKRs are for.
Don't put your day-to-day business into an OKR.
Now let's find some key results for the polo project.
First of all, let's find out what key results are.
Well, key results are what the word literally says.
The key results we want to get to on this project.
What do we wanna reach for this polo project, for instance?
There are some requirements to these key results.
They must be specific.
No soft goals of any kind.
Must be very, very specific.
Stretch goals.
The goals should make you feel a little bit uncomfortable,
doable but not easy.
Measurable.
You must be able to measure very specifically
if you reach them or not.
Always put a specific number into the key results.
If you wanna open E-commerce site
and start selling something don't just say
open an E-commerce site.
You should rather say,
open an E-Commerce site and get 50 orders.
This way you get what you actually want,
because opening an E-commerce site could be something.
But once you get 50 orders it's very real.
Now let's go back to the T-Shirt company.
What's a good key result here?
Obviously, we wanna sell some polos,
but what's the actual key result?
For this project a good key result is
complete 50 orders with polo shirts.
Again, we're not just saying start selling these things.
We're actually saying complete some orders,
and thereby getting closer
to the high-level objective of increasing revenue.
For the simplicity of this video
we only do one key result,
but it's pretty normal to do two, three,
four, or five key results for a single project.
Now let's move on to step number three.
Step number three, set the team.
We now have the key results, let's find the team
that can reach those key results.
This is obviously a very, very important
part of the process because these are the people
that are actually gonna do this.
So to find the right team,
you need a team that is completely autonomous
and has all the resources needed
to complete the project and reach the key result.
First thing we need to find is a lead.
The leader is the one who's responsible
along with the team, obviously,
to actually reach the key result.
Usually the lead is a big stakeholder
or somebody who's gonna do a lot of the work
that needs to be done, maybe even both.
One of the reasons why this is such
an important part of the process.
It's because this is when you realize
you can't do everything.
When you start putting team members on here
you'll see that some people are on multiple projects.
You can put a person on one or two projects.
You really shouldn't put them on more than that.
They will be stretched thin and you can't do anything.
You may have to kill some projects at this stage.
You find out that some people are just stretched too thin.
This is a very, very good, important, and healthy part
of the OKR process,
finding out that you can't do everything.
You have to make some hard choices.
So, don't try and do everything.
You will fail.
This is all about priorities.
You gotta find out what you really wanna do
and what you really can do with the resources you have.
Let's have a look at our example T-Shirt company.
For the start selling polo shirts project,
we're gonna do the following team.
Sarah's gonna be the lead.
She's the buyer.
John is gonna do merchandising.
Brian's gonna do marketing.
And Sandra's on the web team.
There you have it, we have our first project.
We have a team, we have some key results
to start selling polo shirts.
With all that in place, let's move on to step number four.
Step number four, have the teams do a monthly breakdown.
Time to put the team to work.
They get the project slide
with the team and the key results.
Their job is to break that down into months.
Months with initiatives and key results
for every single month.
So the team now knows they have
to complete 50 orders with polo shirts.
Their job now is to break that down into months
and what do they need to get done
to get 50 orders with polo shirts
before the end of the quarter.
We assume that it's Q1, so we have
January, February, and March.
The key results for the quarter is to complete
50 orders with polo shirts.
Now we do a new slide for each month.
On the left we have the key result
and on the right we have the key results actually achieved.
Let's have a look at what that looks like.
First we have January.
Find 30 polos that should be listed,
and after that order the 30 polos.
In February we have polos in the warehouse,
create all content and photos for all polos.
And in March add to E-commerce shop.
Do a Facebook campaign that generates
at least a thousand visitors with a budget
of $500 and sell the 50 polos.
That's it, now the teams know exactly what needs to be done
each month to ultimately get to the key result
of selling 50 polos that quarter.
A quarter can seem like a long time.
But breaking it down to months works really well.
A month is enough time to get stuff done,
but also creates a healthy sense of urgency.
With all that done, let's move to step number five.
Step number five, announce it to everyone in the company.
This is very important because it gets everyone online.
It gets everyone in the company working towards
the same objective.
Everybody knows that this is what's important this quarter.
For the people working on the actual OKRs,
they'll get leverage.
They can tell everyone else, hey,
you need to help me with this, it's an OKR.
If everyone is at the same location
you just set up a presentation
and show the presentation you've already built.
You start with the high-level company objective.
Then move to the projects and key results.
Then all the way down to each project.
All in all an important thing to do,
because everybody knows what the objective is
for the quarter, and you're just more likely to get it done.
Anything OKR is open to everyone in the company.
So make sure the presentation you actually do
is in a shared folder that everybody has access to.
With everyone onboard, let's move to step number six.
Step number six, do a weekly check in.
Now we have to make sure the ball keeps rolling.
Some people make the mistake and think
that things will just run automatically.
They usually don't.
You have to check in throughout the quarter.
Schedule a meeting or a call every week,
same time every week.
I prefer a call, actually.
But if everyone's in the same office,
that's kinda ridiculous.
So if everyone's in the same office,
maybe a standup.
Maximum 50 minutes, get it done quickly.
There's one call for each project.
The participants are all the team members of the project
as well as the one person that runs
the OKR projects from management.
Make sure the projects on track
and make sure they get any resources needed
to complete the project.
All of this is just a short check in.
It is important for the process to do this every week.
It makes sure that there are no showstoppers
that get too big.
We just solve the problems on a weekly basis
and someone from management is really there to help.
These meetings keep going throughout the quarter.
Let's move to step number seven.
Step number seven, score and announce the project.
Okay, we're now at the end of the quarter,
time to announce and score the project.
I can't stress enough that this is not about
pointing fingers.
This is about learning
and get even better in future quarters.
So every single project initiative is gonna get a score.
There are different ways of doing this.
Some people use a score from zero to one.
We just use different smilies.
So that's what I'm gonna show you today.
We have three levels of smilies,
not happy, medium, and happy.
This is something that the team does.
They add what they achieved and the smiley
next to each initiative.
Now let's get back to our T-Shirt company
and look at selling polos.
Let's go through it really quickly.
In January, we wanted 30 polos and we found 25.
Okay, happy smiley.
We ordered 24 out of the 25, also okay out of the 30.
Get into February we wanted
to have the polos in the warehouse.
Apparently they arrived very, very late.
So we got a medium smiley on that.
And secondly we wanted to create
content and photos for all these polos.
They arrived late so we're pretty unhappy with that.
Get into March.
We got the things we didn't done in February done,
and we started adding it to the online shop.
Everything was added and we're happy.
Then we wanted to do a Facebook campaign
that got us 1000 visitors.
Unfortunately, costs were a little bit higher,
and we only got 600.
So we're kinda medium on that one.
In the end, we ended up selling 45 polos
and we wanted to sell 50.
So we're pretty happy with that.
Then we zoom out and look at the overall project.
So start selling polo shirts, complete 50 orders.
We got to 45 so we're pretty happy with that.
That's it, we've gone through the entire quarter.
Now it's time to show everyone how we did.
We pretty much have a presentation
because that's part of the process.
So we show this to everybody so they can see
all the way down to every single project how we did.
Then finally we give them an overview
of how we did for the entire quarter.
Here are the seven steps.
So there you have it.
Go through these seven steps and implement OKRs.
I guarantee you it will change your business.
If you get OKRs working you will get more things done.
You'll also get the right things done.
And that's really what matters if you wanna win.
There are all kinds of different ways of doing OKRs.
We did it in a certain way at the company level.
Others do it all the way down to the employee level
so employees have their own OKRs.
I'd love to hear from you guys if you seen other methods
other scoring systems, whatever.
Put it down here in the comments.
I'd love to hear about it.
If you want more videos to help you build
your amazing startup please subscribe
to my channel right now.
Thank you very much for watching.
(upbeat music)