Increase your odds of winning by setting smart goals for the new year.
KPIs, MBOs, OKRs. You’ve probably heard of these and several more ways to set your company’s objectives. With so many options to get to the same goal, it is no wonder why by the middle of the year, objectives, as originally set, often go the same way as New Year’s resolutions. The problem often lies on the goal development: sometimes goals are crafted at the leadership level and not effectively shared and refined with the rest of the organization. Also, there’s a tendency to focus on numbers without regards to the operational goals that drive these numbers, for example, growing revenue by x% (a key business goal) may require sales restructuring (an operational goal).
OKR: a framework that may work for you
Although there is no magic formula for setting goals and sticking to them, I’ve found that the framework provided by OKRs (Objectives and Key Results) can set teams on the right track when it comes to goal setting. Before going into details, diving into the Wikipedia definition of OKR can be useful:
“[OKR’s] main goal is to define company and team “objectives” along with the measurable “key results” that define achievement of each objective. One OKR book defines OKR as “a critical thinking framework and ongoing discipline that seeks to ensure employees work together, focusing their efforts to make measurable contributions.”
The key term to focus on is “to ensure employees work together.” The OKR framework is good at steering top management to align their goals with those actually in charge of driving the business towards them throughout the year. This means that as you think of OKRs, you need to make sure you’re delivering on the key initiatives the company needs to get done to get to where it needs to be. I find it useful to think of a “value chain” that will support the OKRs with specific initiatives from your team.
Some guidelines about setting objectives and key results
Setting goals and key results together – which is basically what OKRs are all about – can help you create the discipline to have the right internal conversations initially and throughout the year to ensure the team stays focused.
Here are three easy ways to get you going:
The benefits of using a framework like OKRs go beyond just ensuring you develop objectives and meet them. Crafting objectives and key results together disciplines thinking at all levels, communicates the company’s vision accurately, establishes a measurement culture, focuses the effort of your team and enables employee engagement.
Are you ready for OKRs?
Goal setting using OKRs is valuable regardless of your size. As stated before, creating a culture around setting measurable objectives is always a good thing. Think in terms of developing OKRs around functional or product teams in addition to the executive team.
No matter your size, aligning goals with the specific results needed to get there will only result in an organization where everyone – from the CEO to the most recent hire – point their efforts in the same direction.
Your CFO: A co-pilot you often need to rely on for handling a healthy HR process.
Photo courtesy of Christopher Michel.
Sometimes in a startup, your CFO will need to step up to handle non-financial duties and act as an informal COO. The reasons can range from fast growth to a key VP leaving to the need to establish processes, or even to simply not having the team/bandwidth to complete the needed work. Because of his or her familiarity with the daily pulse of the company, the CFO is often in the best position to assist, especially in matters regarding HR.
Several of us at Burkland Associates have been required to take over the HR processes of our clients for some periods of time. This can look like a trial by fire for a CFO, so we created a framework that helps us evaluate the company’s HR options and choose the best path. Limited resources are usually the norm, and the priorities often start with ensuring you can secure payroll and benefits, closely followed by the need to find an HR partner who can handle the recurring process of compensation and give you strategic HR cover.
There’s no quick fix for a function as central to success as HR, which touches everybody in your company. However, you need to find a balance between the urgent and the important so that the path takes you to a well-functioning HR practice. Here are some guidelines you may find useful as you evaluate partners, whether it be your part-time CFO, a 3rd party resource, or a combination of both, who can help you run HR without a glitch in the short and long run.
The ability to set and run compensation & benefits must be at the top of the list when you are evaluating an HR partner/service provider. The five things we look for are: a) does the partner have an employee help desk for all HR/benefits/payroll questions & issues? b) Can they create employee communication materials? c) Will they help you set compensation levels and stock option programs with relevant benchmark data? d) Can they support you regarding compensation and benefits compliance? and d) As you grow, do they have the capacity to organize, coordinate, and run open enrollment meetings and health fairs for your people?
A solid HR partner needs to help you establish written HR policies and procedures that can accommodate your startup’s team growth and help you attract the right talent. In addition, their HR policies and procedures capabilities must include a sound and clear process for hiring, on-boarding and also one for termination. Finally, make sure their policies and procedures include compliance with regulations in your market.
HR is one of the areas where technology has made a huge difference for companies of all sizes over the last few years. A partner needs to have a good Human Resource Management System (HRIS) with integrated HR, benefits and payroll functionality, and benefits enrollment software. It also helps if the system has an employee on boarding self-services portal, and gives you the ability to easily implement and manage payroll.
As you grow, you need a partner who can provide expert guidance on recruiting strategy, not just short-term tactics and practices. This strategy often includes a hiring plan and a pipeline of the positions you need to fill over time. Ideally, they will manage this hiring plan and the recruiting pipeline for you. Expert guidance also includes giving you access and helping you make sense of compensation benchmark data that is relevant to your industry and to the stage of your company.
Finally, an important but not urgent task for a good HR partner includes an initial strategic HR audit and a review of the big picture with you and your executives. As time goes by, your partner should be able to provide guidance on the strategic HR road map they help you develop, while giving you sound advice and expert guidance with setting the crucial cultural tone for the business that reflects the unique essence of who you are, often, this essence is found through interviews with management and well-designed employee surveys.
These five elements are by no means exhaustive. HR is a complex task. However, evaluating HR help using these five areas as a guide provides the cover you need to have a well-run, healthy HR function that accommodates growth and supports recruitment and retention. Most importantly, solid HR practices designed early on can ensure you nurture and maintain your culture through time, no matter your size.