My readers are requesting specific OKRs coaching examples and best practices for making work measurable and creating a metrics-driven culture. In this post, I share highlights from my OKRs coaching session with an Engineering VP at a mid-sized software company to illustrate best practices for identifying underlying drivers and moving toward a metrics-driven culture using the Objectives and Key Results (OKRs) methodology.
Note to busy readers: Feel free to skim over the article and look at the key points in red
OKRs Coaching Session Outcome
Although we drafted several objectives, let’s focus on one objective in this post. The Objective is “Measure and improve engineering’s support of sales.” This Objective has 2 Key Results.
Here is the final language of the OKR. For those of you not familiar with the OKR jargon, just know that O = Objective and KR = Key Result. The KRs are the measurable things that need to happen in order to define achievement of the objective.
O: Measure and improve engineering’s support of sales
· KR 1: Document all engineering engagements with $100k+ prospects and obtain a baseline on the technical pass rate metric by end of Q2.
· KR 2: 60% of account managers in 1 region trained and certified on product X selling technique by end of Q2
Let’s reflect on how the conversation evolved beginning with somewhat fuzzy objectives and ending with two well-defined KRs that define how engineering can help drive sales. We did not begin with a menu of KPIs and select the best options. I posted an article in 2016 detailing problems with a menu-driven, “alternative-focused” approach. We started with a focus on what outputs from this particular engineering team most impact sales.
OKR Coaching Transcript
Here is a summary of my coaching conversation with the Engineering VP:
· Me: At the end of the quarter, how would we know if Engineering helped sales achieve their targets?
· Engineering VP: Hmm, that’s a really good question. (Pause)
· Me: OK, can you name a particular customer who purchased within the last year where Engineering clearly contributed to the sales process?
· Engineering VP: Actually, no. But that would be very good data to have. It’s not so much that we help sales close deals, it’s more like we keep the prospect in the mix.
The Engineering VP initially proposed the following KRs to reflect achievement of the O:
· “Provide sales support for 5 major prospects in Q2”
· “Develop training for sales team by end of Q2”
While these 2 statements are directional, they are not measurable. Let’s look at the process for translating these two statements into measurable KRs!
Statement 1: “Provide sales support for 5 major prospects in Q2”
We should give some credit for being specific with the use of “major prospect.” The statement appears to be measurable. It includes the number “5” and is time bound “in Q2.”
Here’s a summary of the conversation we had along with the action items arising from our conversation to improve this key result:
· My question to address ambiguity: Is there a distinction between a major prospect and a minor prospect?
· Engineering VP: Not really
· My question to ensure alignment across departments is jointly defined: Do you and the VP Sales agree on the definition of a “major prospect”
· Engineering VP: Let’s replace “major prospect” with “prospect with $100k+ year 1 revenue potential.” Then we can run this definition by the VP Sales.
· My question to confirm metric history: Have you measured the number of these sales support events in the past?
· Engineering VP: No.
· My question regarding the intended outcome of achieving the goal: What is the intended outcome of Engineering providing sales support?
· Engineering VP: It results in either a continuing sales process or kills the deal.
· My boundary condition question: What if all 5 sales support calls result in dead deals? Will we have achieved this goal?
· Engineering VP: No. The meeting is really not considered a success when we lose the deal for technical reasons. Maybe we should define this as provide sales support with no more than three $100k+ prospects deciding to not evaluate our product for technical reasons.”
· My concern and recommendation: While this is heading in the right direction, the key result is now framed negatively. I recommend a positively framed goal and the Engineering VP likes it! Obtain a baseline on “technical pass rate.” (Example of technical pass rate: if we have meetings with TEN $100k+ prospects and 8 of them advance without technical objection, the technical pass rate is 8/10, or 80%)
· Action Item coming out of our conversation: Engineering VP to confirm VP Sales agrees that technical pass rate is a useful metric to document in order to quantify the extent to which Engineering contributes to sales.
Statement 2: “Develop training for sales team by end of Q2.”
This key result feels a bit more like a task than a goal. Notice the phrase begins with “develop”, a weak verb. A solid key result takes the form of a concrete result that exists independent of opinion. This language is not specific. It does not describe “training.”
Let’s summarize the conversation and action items emerging from our conversation to improve this key result:
· Q: Are we trying to develop the training in Q2 or train the sales team in Q2?
· A: “Both! We want to develop the training and begin training the sales team by end of Q2.”
· Q: What is the target number of sales reps we need trained in order to declare we’ve begun training?
· A: Most, say 60%. We don’t know how many sales reps yet since that depends on the region.
· Q: How do we know they’ve completed training? Can you produce a list of the names of sales reps who are trained? Is there a certification process?
· A: We’re in charge of declaring the training completed, so we will develop a simple assessment/certification program that lists the names of everyone who’s certified after the training.
Our refined key result: 60% of account managers in 1 region trained and certified on Product X selling technique by end of Q2.
Key Takeaways from OKRs Coaching Session
· Good news! It’s possible to define KRs that reflect how engineering supports sales.
· Managers that support each other should jointly define KRs to ensure alignment.
· Neither KR in this example appear in a list of standard KPIs.
· KRs are often difficult to define; they are mostly created not selected from a list.
· A conversation to draft and refine your KRs with an OKRs expert can be very useful.