Episode 186: The Bottom Line - OKRs

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting advisory firm for insurance agency owners in the country, providing monthly accounting, CFO services, and tax preparation. Check them out at club.capital. This podcast is brought to you by Autopilot Recruiting. Join over 1,200 State Farm agents in putting your recruiting on autopilot. Any successful insurance agent will tell you how important team is. Finding those rockstar team members doesn't happen when left to chance. It happens through consistent recruiting. You never know when you're going to lose a team member. And the key to an incredible team is constantly searching for the best talent. Autopilot Recruiting is a continuous recruiting service where you'll be assigned a recruiter that has been trained to recruit on your behalf every business day. This recruiter will take over and revamp your CareerPlug, send out assessments, do pre-screen phone interviews, and schedule your in-office interviews. All you need to do is to show up and give a thumbs up or a thumbs down. This ongoing service is extremely affordable and a no-brainer for taking your insurance agency to the next level. Listeners of the Club Capital Leadership Podcast, go to autopilotrecruiting.com and use the code Club Capital to get started. Again, autopilotrecruiting.com and use the code Club Capital to get started. Hey everyone, so the last few weeks we have been talking about what does it mean to have a blueprint for the business, and then how do you build a plan? And now we're going to talk about your 2023 objectives and key results. And so I want to give complete full credit to the book written by John Doerr, which is Measure What Matters. And so let me share with you my own personal journey as to kind of where this came about, how this ultimately began to impact me, what it, what it did for me personally and for the business, and then how I shared it with others and why I think that this is a great framework for you to be able to utilize or consider utilizing for you. Last year, I mean, I have taken in and spent hundreds of thousands of dollars. I mean, I'm not kidding when I say that. I think it's well over $300,000 in the amount of money I've spent on coaching programs, myself, my own personal development. If you think about the money for meals, flights, hotels, the programs themselves, etc., that's not even counting the time away from the business to invest in my own personal and professional development. The reason I say that is by no means to have that as any type of bragging. It is just I am a big believer in developing of myself so that I can get better and, and be able to give to other people and to be able to grow the businesses. Well, along the way, when you're in with that many different business owners and entrepreneurs in different programs, you hear a lot of different frameworks as to how to set goals in the business. And I have shared on this podcast many times that I'm not— I love the striving for certain things, especially the striving of business. I think about business as a game. I played a lot of sports when I was growing up, still love to be competitive, whether it's in golf or, you know, playing gotcha with my son, or, you know, playing in a men's basketball, adult basketball league, whatever that is. So I love to be competitive. I love to be able to set things to be able to strive for. And so business gives a great playground to be able to do that. The reason that I have not loved to set goals is two primary things. Is without me knowing it, by using the word goal, as I was immediately beginning to make myself think that where I am today is not where I want to be and someplace out in the future is, is good. So where I'm at today is bad and where I want to be in the future is good. And what I've realized, and Dan Sullivan does an amazing job of setting this, where he calls it the gap in the game, is as I was getting closer to hitting those, quote, goals, I would just move the goalpost out or I'd move the goal line out. And so basically, I never could ultimately get there. I would just, as I got closer, it was like moving with the horizon, as Dan says. And so what, that was one aspect of goal setting that I didn't love. And the second aspect of goal setting is it becomes a little too synonymous with a wish. And so in other words, I say, well, I'd like to lose 15 pounds, or I'd like to grow my revenue by $100,000, or I'd like to grow revenue $20,000 a month, or I'd like to get 50 new clients, or whatever that may be. Then it just becomes, well, let's just set that as a goal. And there's no actual tangible plan to make that happen. And we spent some time last week talking about having a plan that actually works. So for this week, those are the two reasons why I didn't really love goal setting. So, but I did understand, and Michael Hyatt does a great job with teaching about how to set goals in the business and common things such as you should have somewhere between 3 to 5 goals. That number makes sense. And then those goals need to be SMART or SMARTER goals. In other words, they need to be something like specific, measurable, ATTAINABLE, REALISTIC, TIME-BOUND. Some people have different acronyms for the E and the R stands like. So you've heard that before. So I did that for years, bought into that philosophy. Well, over especially the last 18 months, myself, but also working with other business owners, I began to kind of notice a similar pattern is that, number one, they had several things that they wanted to accomplish, but it was really hard to get it into this Smarter Framework, they would say something that absolutely you could look at the business and say, yeah, that makes sense. We want to improve our sales process. We want to be able to improve our customer journey. We want to improve our customer experience. And you would say, well, you can't set that as a goal because that's not— doesn't have— it's not specific. It's not measurable. It's not time-bound. And the business owner would say, okay, yeah, that makes sense. What do I need to do? And so it would be easy to set targets around sales numbers or around revenue numbers as an example. And so that's what all the numbers would be. Well, it's still leaving them saying, well, this is really what I want to do. I want to have a sales process built out. I want to improve our customer journey. I want to improve our customer experience for our clients. I want to install an onboarding, onboarding journey for our new customers that come on board, etc. I want to actually have and build a marketing plan this year. Those are all normal things in the business. I actually want to get control of my financials this year, whatever that may be. And so it doesn't fit in that 3 to 5 goal setting, got to be smarter framework. And so I, I just thought, well, that's maybe the way it is. And I wish I could tell you what podcast I listened to, but I went back and I remember seeing the book Measure What Matters by John Doerr. And so I will also kind of take a little bit of a detour for just a moment and tell you that a lot of the business books that I have read over the years, especially if they're written by someone who's in Silicon Valley, has had little application with me or the small businesses that I've been a part of or some of the people that I've been able to help. It's like, yeah, well, that works for Apple, that works for Google. But, you know, we're a business that does $1 million in revenue. How does that, how does that help me? They do $1 trillion of revenue or $2 trillion in revenue. They got 20,000 employees. Sure, that works there. That doesn't work for, you know, my staff of 5. And so I found sometimes harder. How do you pull the application from that book all the way down to day-to-day things? Now, there are some exceptions. I think the book Radical Candor written by Kim Scott She worked at Apple, she worked at Google, and I think it also applies, you know, to our business as well. So there are certainly exceptions to that. And the same thing holds true, I believe, with this book, Measure What Matters. And so Measure What Matters initially was, I think it was called management MBOs, management by objectives. And then it got over time translated into OKRs. So Objectives and Key Results. And still to this day, from what I gather, I think Apple and a lot of the bigger companies still use OKR framework to be able to set what they want to accomplish in a year. And so, as I read through that, I said, this makes sense to me. Now, they will use the term in that book. He will still use the term in that book, goals. But I think it was the way that the key results and the objectives fit together is what really set it off for me. And so, by definition, a key result is not a key result unless it has a number. So it's still holding true to the goal-setting framework of needing to be able to know, did you or did you not? But oftentimes, a key result, you can have 2 or 3 key results that all point to the same objective. So let's take our example of saying we want to improve our sales process and saying that is a key objective, which by the way, I do believe, and it's actually shared in the book, you should have somewhere between 3 to 5 objectives in a year. Those are your— the replacement of the goals, basically. But that objective could have 2 or 3 different key results tied to it. And so the measurement of those key results, and the idea is that if all of those key results are hit in a year, then you know that you've actually achieved your objective. So what it does is, again, it stays within the 3 to 5, but instead of saying you have 3 to 5 goals, I have 3 to 5 objectives that I want to accomplish this year. That is going to be measured by these key results and we're going to measure those key results on a score board. Maybe I'll talk about, you've heard me a few weeks ago, I talked about a score board, but that's how all of this begins to fit together. If you think about a document, maybe a front page where you say, this is what I want to do in 3 years. This is what I want to accomplish this year. These are my objectives and my key results for 2023. These are my quarterly targets. This is my plan to make that happen. These are my core values that we stand for in the business, and these are the key results that we're going to measure on a scoreboard. That is a really powerful— that would be a really powerful document for you to be able to have everything on a front and back one-page piece of paper. There's a great book, Scaling Up, by Verne Harnish, that talks about a one-page strategic plan. This is kind of how I think about the version of that. There's also one, if you're familiar with EOS and Traction, they call it about a Vision Traction Organizer or the VTO, where it has these. This is what I think for a small business. If you're doing less than $2 million in top line revenue, which many of you are, this is exactly how I believe this is the tool that I use across the businesses. and this is the, uh, a, a tool that I think you could use for you as well, but specifically for today, objectives and key results. So what are the 3 to 5 objectives that you wanna accomplish in 2023? And what are the key results that ultimately support those objectives? So each objective is gonna have at least one key result, but it may have upwards of 2 or 3 different numbers that you're gonna track that if you hit those key results, you will certainly accomplish the objective. I really encourage you to pick up that book. I will tell you there's a lot of different stories in that book, a lot of anecdotes that I think are really helpful. I think it could have been maybe a 15-page white paper. I don't mean that to disparage him, but I think you get the gist of the OKR framework pretty early on in the book. And it's, it's been great. We've shared it with our business owners. It's the framework that I now use. I was using a different one previously where it was kind of a 3 to 5 kind of goals and then picking out what's the one thing that we want to accomplish this year. And now this is just given a much broader organizational structure. Our business owners have loved being able to use it. And so I wanted to bring it all to you. So anyway, hope that's helpful. Until next episode, lead well. So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting advisory firm for insurance agency owners in the country, providing monthly accounting, CFO services, and tax preparation? Check them out at club.capital.