Why OKRs Don’t Work for Venture Backed Companies
Objectives and Key Results (OKRs) have become a cornerstone for goal-setting within most companies. But if you’re anything like the VC-backed CEOs I’ve worked with, you’re probably banging your head against the wall trying to make them work for your team.
A significant gap exists in applying OKRs effectively, especially in the dynamic environment of venture-backed companies. The one-size-fits-all approach laid out in so many books and systems rarely fits VC-backed companies.
VC-Backed OKRs the Right Way: A Team Effort
Instead of a set of OKRs defined at the top level of the company that all teams are expected to work toward, OKRs in venture-backed companies should be a collaborative process involving cross-functional teams.
This approach ensures that objectives are aligned with the company's overall goals while also being realistic and achievable. Each team, from Product to Sales, Marketing, and Development, has OKRs that move the entire company forward toward a common destination.
Key Strategies for Effective OKR Implementation
- Collaborative Development: OKRs should be developed with input from the entire team, ensuring that both bottom-up and top-down perspectives are considered. This inclusive approach ensures buy-in and aligns efforts across departments.
- Ownership and Accountability: Clearly defining who is responsible for each key result is crucial. This clarity helps in tracking progress and ensures that each team member knows their role in achieving the company’s objectives.
- Iterative Process: Regular review and iteration of OKRs are essential. Adaptability allows teams to refine their strategies based on real-world results and feedback.
Common Pitfalls to Avoid in OKR Planning
- Lack of Specific Conversations: Without detailed discussions about what is truly important for the company and individual departments, OKRs can become disconnected from actual needs.
- Overlooking Execution: Planning without execution is futile. Successful OKR implementation requires a balance between setting goals and actively working towards them, with regular check-ins and adjustments as needed.
Execution: The Heart of Effective OKRs
You can’t just plan what you’re going to do; you have to figure out how you’re going to do it. This is the number one place I see VC-backed teams struggle with OKRs, and it’s because the established models out there don’t take that extra step.
Accountability in execution is key. Establishing a regular cadence for reviewing OKRs ensures that teams remain focused and can adapt their strategies based on ongoing insights. This dynamic approach is what transforms OKRs from bullets on a whiteboard into powerful tools for achieving strategic objectives company-wide.
OKRs can be a massive catalyst for growth in venture-backed companies—but not by insisting on trying to make a square peg fit a round hole. Make OKRs work for your team by embracing a collaborative, iterative, and execution-focused approach with a system built specifically for VC-backed teams.
You can read more about the Peak system for building unstoppable venture-backed companies in my bestselling book Peak Teams, now out on audiobook.
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