Open sourcing* our top-level OKRs

* not really open sourcing, but you’ll get 90% of it.

** if you have any questions, ask @tabilityio on X/Twitter.

TL;DR: show me the OKRs

It’s fair to say that OKRs have taken over as the primary goal-setting framework for teams. But, that hasn’t made setting goals any easier. Most people know what objectives and key results are, but there aren’t enough real-life examples to compare yourself to.

We thought we’d help by sharing our 2024 Q2 OKRs, and more importantly, by explaining how we got there.

So, behold the OKRs 👇

It’s redacted, but you should get the gist of it. Now, here are some quick notes before I take you through the process that we used to come up with these OKRs.

Limit the number of competing goals

A study by OKR International found out that having too many OKRs is the #1 mistake that teams make. Our general rule is 3x4, meaning 3 objectives and 4 key results per objectives. This ensures that you’ve thought hard about the tradeoffs, and that you’re not trying to add everything into your OKRs.

And, in true “do as we say, not as we do” fashion, we have 16 key results in this plan 😅. It is a bit much but we felt that this had a good balance, and a couple of the KRs are here to act as a control to make sure that we’re achieving our goals without harming other parts of the business (ex: getting more leads, but seeing the quality of leads going down).

Distribute ownership

We share ownership of the KRs between the team. You really want to avoid having one individual in charge of all the weekly updates – they’ll quickly resent the process, and you’ll be missing out on a simple way to create team engagement.

We try to keep things simple. The more complex your metrics, the harder it is to understand what’s going on.

Limit the impact of Goodhart’s law

Goodhart’s Law says: “when a measure becomes a target, it ceases to be a good measure”. In the context of OKRs, this means that your key results can create unwanted incentives for your team. For instance, if your KR is to “double the number of signups”, then one could launch a campaign offering $100 to every person that signs up. You’ll be super likely to reach your KR, but the signups will be of poor quality.

One way to prevent this issue is to pair the signup KR with another one around retention or customer acquisition cost (CAC). Something like “Keep CAC below $200” or “Ensure that week-2 retention of leads is above 25%” should help control bad solutions.

In our case, we want to increase the number of trials that have completed certain steps (we call them S-tiers), but we want to do so in a healthy way – this is why we also monitor how many pilot workspaces are weekly active.

Ok, so now that we’ve seen our quarterly goals, let’s dive into the process to set them.

Quick note on the role of OKRs ℹ️

A common misconception with OKRs is to think that it’s about measuring stuff. That is in part due to the emphasis that is put on having measurable key results for your objectives. As a result, OKR workshops can get derailed by lengthy conversations nitpicking the different targets – without even realising that we’ve picked the wrong set of goals.

Alignment should come first, and then metrics second.

Another thing to note: if something isn’t listed in the OKRs, it doesn’t mean that no effort should be put into it. It simply means that you’re happy with the current state of things (and you can use KPIs to track your business-as-usual metrics).

The role of the OKRs is:

1. To act as a beacon
2. To help you pick the right bets
3. To understand if your bets are paying off

You don’t need to capture your entire roadmap in your key results, and you also don’t need to cascade everything down. Once you accept this, it becomes 10x easier to write effective OKRs that other teams can align with.

Our top-level OKRs cocktail: 1 part business milestones, 2 parts customer funnel

While team-level OKRs can vary a great deal, you’ll often find similar themes in the top-level OKRs of organisations. Revenue, customers, growth… It’s expected to see a set of KRs relating to the performance of the business.

But, your top-level OKR should also help your team understand what specific aspect of the business they need to focus on during the upcoming quarter. So, you want to find the right balance between high-level business goals, and narrower objectives that will help folks pick the right set of priorities.

In our case, we divide the OKRs into 3 objectives like this:

• Objective #1: this is the objective that focuses on the core KPIs and what it takes to achieve our next business milestone
• Objectives #2 and #3: these objectives are for diving deeper on specific parts of the customer funnel that we want to improve.

Objective #1: tracking the next business milestone

The first top-level objective is probably the easiest to write. That is, if you have a clear vision for your product or business. In our case, that objective is dictated by the metrics that we need to hit to get to our Series A.

You probably won’t have the same metrics, but you can apply a similar logic:

• Where do you need to be in 12 months in terms of revenue, customers, velocity?
• Given these numbers, where do you need to be 3 months from now?

If you don’t know your 12-month plan, you can get an idea by looking at your peers or talking to various advisors/mentors. Things will most likely change as you learn, but it’s good to have a  North Star you’re aiming for, and that North Star will likely look like a combination of your core KPIs.

A few more notes about our first objective:

• We’ve set a weight of 3x on the revenue KR because it ultimately matters way more than the rest
• We’ve called out the number of upgrades explicitly because we want to be more intentional about our expand effort – you can do the same for specific aspects of your growth that you really want to nail.
• We’re also tracking the big bets that we’re shipping for a similar reason. In Q1 we had a few great ideas, but the releases got delayed. Tracking the number of bets shipped is a consequence of that – we don’t want to miss our deadlines again.

These last 2 points are important. Do not track things in vain. Our preference would be NOT to track the number of bets shipped or the number of customer upgrades as part of the OKRs. They’d be listed in a KPI dashboard somewhere, but not in the top-level OKRs.

The reason these 2 goals made the list is because our reflection on Q1 showed that we needed to be more intentional about these 2 things.

So, I repeat: do not track as OKRs things that you are really confident to hit with business-as-usual effort. You’d be just adding more work to your plate to do the corresponding check-ins, analysis, etc – and it's work that admittedly wouldn't have any impact on the end result since you already know you'll get there.

Instead, reserve OKRs for goals that are important, but where there is uncertainty.

For example, say that your website conversion rate has been between 10% and 12.5% for the past 6 months. Then it doesn't make sense to set an KR to "keep website conversion above 10%". This is already the status quo. But, if you were trying to improve conversion to 20%+ then it makes a lot of sense to add a corresponding KR "double conversion rates from 10% to 20%". This is a significant challenge, and you'll most likely need to throw a few experiments at it to be successful.

Here’s a quick chart to help 👇

Objective #2 and #3: narrowing down on specific parts of the funnel

Now that we have our first business objective, we can add 2 more objectives that will focus on the specific parts of the business that we want to improve this quarter. These 2 objectives are critical because without it, our OKRs are way too generic.

Objective #1 gives a sense of scale to our growth, but it’s not prescriptive in the type of efforts that we need to make. You could end up with one team trying to improve the top of the funnel, and another one tackling issues at the bottom of the funnel. Everyone will be busy, but without a clear direction, it’s unlikely that your team will be able to properly support each other.

So, this is what the role of objectives #2 and #3 will be. Now, let’s look at our decision process.

Step 1. Identifying the stages of our customer funnel

First, we need to understand what our customer journey looks like. Rather than starting from scratch, I recommend using the AARRR funnel as the blueprint. The AARRR funnel is a framework that divides the customer journey into 5 stages. Here’s how it’d look like for a SaaS business:

• Acquisition: how many people sign up for your product?
• Activation: how many of these people complete the onboarding process?
• Retention: how many of these people come back every week?
• Referral: how many of these people invite their friends and colleagues?
• Revenue: how many of these people end up paying for your product?

Using the stages of the AARRR funnel is a quick way to anchor discussions. You can quickly vote on the stages of the funnel that need to be improved – these will vary depending on the stage of your product.

In our case, we wanted to go one step further. We adapted the AARRR funnel stages to better represent the journey of our own customers (we have a self-serve PLG model). Things are a bit different for us due, and I’d encourage you to do the same exercise for your business.

For Tability, our funnel is:

• Acquisition: how many people find our content
• Signup: how many people sign up for a trial
• Trial retention: how many people keep coming back during their trial
• Trial conversion: how many people convert to a paid subscription
• Pilot retention: how many people keep using Tability in the first 3 months
• Pilot conversion: how many people are paying after the first 3 months.
• Customer retention: how many customers keep using Tability every week
• Customer expansion: how many customers expand to more users or upgrades

You’ll note that in our model we consider that customers go through 3 stages.

• Trial: they’re not yet paying, and just exploring the product
• Pilot: they’ve been paying for Tability for less than 3 months‍
• Customer: they’ve been paying for Tability for more than 3 months

The distinction between Pilot and Customer is important for us because our data has shown that the first quarter post-subscription is the highest signal for long-term success. If we removed the Pilot stage, it would be much harder for her to build the right kind of onboarding.

Anyway, the point is: your customer funnel will most likely have stages that are specific to your product, but also to your business model. You won’t have the same funnel if you’re doing high-touch sales to Enterprise customers or if you have a low-touch PLG strategy.

Step 2. Voting on the stages to improve

The rest of the process is easy. We gave each team member 3 votes, and asked them to put their votes on the stages of the funnel that needed to be improved.

This voting process is important as it helps us gather different perspectives. Someone that focuses on generating leads might have a different opinion than someone that is responding to support requests. The voting + the discussion around the votes help get a 360 view of the business.

In our case, we saw the votes converge towards 2 areas:

• The trial phase
• The top of the funnel

The next step is then to turn the result of the votes into a set of OKRs.

Step 3. Turning votes into OKRs

This stage becomes a bit subjective again, but the best approach is to start by looking at the main issue. You can simply start by answering this question:

“What is the core issue with <focus area>?”

This should give you the starting point to find the objective and key results for your OKRs.

I’ll use the trial phase as an example.

Q: What is the core issue with the trial phase?
‍A: We’re seeing too many trials that haven’t completed their setup successfully

Q: How would we know we’re doing a better job?
‍A: We should see more activity from trials in week 2, more data being added to the workspaces, and a general improvement in product-market fit score.

I’m oversimplifying our internal chat, but this is more or less how we ended up with our OKR “Make our trials awesome”. Here again, the devil is in the details, so I’ll do a KR-by-KR commentary for that objective. Hopefully this will also help you with your own goal setting process.

Why each KR has been picked for “Make our trials awesome”:

• Increase week-1 retention (return on, 8 weeks) from 17.5% to 35%: this key result tracks the number of people that sign up on week N and are back in the platform on week N+1. Honestly, it’s a delicate measure because it depends a lot on where your signups come from (we had a viral Tiktok video once that messed up the metric). But, overall this is one of the better indicators of success for onboarding.
• Demos per week go from 5.5 to 8/week: we’re self-serve, but we know that demos significantly improve engagement. It might be reversed causation (engaged trials want demos), but this KR pushed us to make it easier to book demos with us.
• XX% of trials become S-tier by day-14: this KR is here to drive improvements that would result in having a higher percentage of trials becoming active. We defined tiers to help us put trials in different buckets. Ex: a good trial has users, goals, etc. and a bad trial hasn’t done anything on the platform. We’re tracking the percentage of trials that end up in the “great” bucket by the end of week 2.
• 75% of pilots are weekly active: onboarding efforts shouldn’t stop once people start paying. We added one key result to monitor activity during the Pilot phase, and push us to give the best experience possible.‍
• Increase PMF score from XX% to XX%: this key result looks a bit out of place given the description of the objective. But, shipping the features that people want will also help us get more successful trials.

You have OKRs, now what?

You now know the simple process that we use to set our top-level goals. But that’s only half the battle. What makes our small team able to achieve big things is how diligent we are at tracking progress week-after-week – something that only takes our team a few minutes thanks to Tability.

We could work for 3 months and check on the state of the OKRs at the end of the quarter, but just like with agile methodologies, having tight feedback loops on the key results makes us more likely to deliver the outcomes we want.

Making progress visible is the easiest way to drive accountability as well as minimise the risk of being wrong. We can quickly see when things are stagnant or going in the wrong direction. In turn, we’re able to adjust our strategy in a matter of days instead of months.

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Connect with me on Twitter (@stenpittet) if you have any questions or want to discuss your own OKRs – I’d be happy to help!

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