Written by Roger Longden, Managing Director of There Be Giants
Running a business has its risks – everything from cash flow and new product introductions to increasing overheads and recruitment keeps business owners awake at night. But when things are moving quickly it’s often the things right under our noses with the most destructive potential.
Here we highlight the top five biggest risks brought about by rapid scale-up and how a framework of Objectives and Key Results (OKRs) can help to fix them.
When businesses are still relatively small, they are perfectly aligned – the whole organisation is working to achieve the strategic goals of the business set out by management. Alignment is easy in the early days of organisational evolution because there are less employees – things just work well. But with increasing size comes increasing complexity and alignment is often the first casualty of growth, especially when that growth is rapid.
The fix: OKRs deliver the process for how each person responsible for growth in an organisation can measure their key results to achieve the business’s overall strategic objectives. Since they are transparent, it helps ensure alignment throughout all levels and departments in achieving the objectives – moving everyone in the same direction.
2. Demonstrating Progress
It sounds simple enough, but it’s often easier to chase a goal than to demonstrate you’ve achieved it. Multiplied across your organisation and its employees, it becomes a much bigger problem – you don’t want a lot of ‘busy fools’ – so demonstrating that progress is being made is fundamental to success.
The fix: OKRs must be clear, measurable and unambiguous but they must also demonstrate incremental change over time. The easiest trap that organisations fall into is to set a binary result where the outcome is either achieved or not. It’s difficult to demonstrate progress if you either have or haven’t achieved something – but demonstrating that you have reached milestones means that you are for example 25, 50 or 75% of the way to success which signals change and progress to management. Incremental change over time shows how close (or far!) you are from ultimate success.
3. Removing Silos
Most organisations are guilty of siloed working in some way as they grow. Isolation of employees, whole departments or project teams means that information and knowledge aren’t shared across the organisation which often leads to conflict and confusion – and a whole lot of missed opportunities.
The fix: OKRs are bio directional – that is to say that they don’t cascade from the top of the organisation to the bottom. They are set in individual groups across the whole organisation which means that working in isolated departments is a thing of the past. Colleagues can collaborate across the organisation coming together to meet common goals more easily, whilst working transparently means that everyone understands how they have a critical role to play in the overall bigger picture. Colleagues can see how working together to achieve common goals achieves the overall success.
4. Ambition and creativity
As organisations become bigger and more complex, everyone’s role becomes increasingly defined and the part they play is to some degree more limited to their responsibilities. Talent is one of the biggest losses in fast-growing organisations – maintaining a culture where people feel they can be ambitious and creative is key to organisational growth and success.
The fix: People and culture play a pivotal role in OKRs. Importantly, once leaders in the organisation have their objectives set, they will define the way they will achieve their own key results – they are not forced upon them. This means that ambition, innovation and creativity are required to get to the end game, and those employees that set themselves ambitious targets to hit will ultimately be given the most resources internally with which to achieve them, promoting internal entrepreneurship and helping with employee retention and job satisfaction.
5. Smart Failure
As we were told in childhood – it’s important to learn from your mistakes. Not to do so is to recreate them and continue the cycle of failures. Organisations in rapid growth often don’t have the time to look at what didn’t work and why, and how they’d do things differently – instead focusing on what did work and how they can do more of it. But analysis of what went wrong is a vital element of learning and eliminates risks down the line on a larger scale. Building this process in is ‘smart failure’.
The fix: Failing is a vital element of OKR practice and is what helps with an organisation’s evolution of OKR use and the ongoing value it gains. As part of an agile organisation, OKRs promote ‘retrospectives’ where teams look back at failure and work out what they could have done better or different thus adjusting their processes for next time around.
Those businesses that implement OKRs weave them into the daily rhythm of the organisation, so they become part and parcel of demonstrating and achieving success. Time is a rare commodity in a fast-growing organisation and stepping back to see the bigger picture is inevitably harder to do. OKRs help to keep the focus whilst empowering employees to make decisions that deliver the required results and ultimately mean that the organisation can eliminate some of the most prevalent risks of rapid growth – focusing on the tasks that bring clear results, not pursuing those that don’t.