The good thing about running a business is that you can make lots of bad decisions and still be successful.The problem is many of us don't even know the difference between a good decision and a bad one. It's simple, a good decision will move you closer to your goals and a bad one further away from them.So you to do well and make more of the right decisions you need to have goals to aim at. I don't know why but so many people I talk to about their business don't have them. Including my competitors, which is a good thing I guess.Anyway if you can follow that logic and see that goal-setting is an important part of running a business, then you'll want to know about OKR's.Here's how they work.How To Write OKR’sYour OKRs should help you answer two critical questions about your business.What do you want to achieve – Your ObjectiveHow will you know when I’ve achieved it – Your Key ResultsYour objective should be descriptive rather than based on numbers and an outcome that means something to you and your team. Like, becoming ‘becoming your cities goto burger bar’ or ‘creating the world’s most comfortable running shoe’. They’re goals that are both relatable and aspirational.• I also like to ‘back up’ my objectives with two to three sentences describing why I want to achieve that objective. The why might be obvious to you now but is easy to forget. You’ll thank me when you need to re-explain them to your team in a month.Your Key results should be specific, measurable, time-bound and verifiable. They should help you measure your progress towards your objective. For example, ‘Become the highest-rated running shoe on XZY platform by March 31st’.• I’ve found setting three key results per objective works best. And I prefer to use one lead indicator and two output indicators per objective. Actions (inputs) don’t necessarily lead to results (outputs), and results aren’t always the best measure of progress.A lead indicator measures inputs. Like ‘cold call 100 CEOs by the end of the quarter’.A lag indicator measures outputs, like ‘sell $1,000,000 worth of product by the end of the quarter’.And when you achieve an OKR, it should be noticeable both internally by your team and externally by your customers.So an OKR (goal) might look like this.Objective: Prepare the business for sale due to burnoutKey Result 1: Sell business by xx/xx/xx dateKey Result 2: Sell business for $x,xxx,xxxKey Result 3: Increase profitability to $xxx, xxxOKR’S ARE SIMPLE BUT NOT EASYGoal setting is most effective when you repeat it on a recurring basis. And then learn from your previous period results to improve each time you go through that process.Following the OKR framework for goal setting is simple but deceptively tricky to do well. You’ll set objectives that you realise didn’t really mean anything for your business. Or you’ll set key-results that are misleading and poor indicators of progress. It’s part of the process.I’m writing about using OKRs now after trialling them for the better part of 2 years. It’s taken me eight quarters of iteration to refine my approach to get good at using this system.If you want an in-depth explanation on how to use OKR's I've written that here.I was going to copy over the full blog, but I've used heaps of images to explain myself and you can't paste them here. So it would be more confusing than useful.Anyway. Hope this helps and let me know if you have any questions. see hubwealthy.com/wealthy
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