Breaking down departmental silos with OKRs can be more easily accomplished when you look at your business through the lens of your customer instead of just your internal operations.
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Podcast Transcript
Stephen N.
What topic are we talking about?
KJ
I have in mind how to utilize OKRs to drive customer awareness.
Stephen N.
My thought process, because I think we have the most knowledge of the topic is really making the case for a customer centric strategy. And why aligning OKR is by your teams is not really advantageous way of building your OKR program.
KJ
What I would oppose to your proposition of, you know, use the customer lifecycle, with OKR, it's not the CEO, the ultimate power. And that's just the way things are done around here is business units. So I I logically and theoretically understand your argument, but practically find that difficult.
Stephen N.
well, there's, there's no, there's no single worse phrase in business than that's just the way we've been doing things around here. That is a surefire way to mediocrity and obscurity; by saying, well, that's just the way we do things. That is the very, that's the very definition of status quo. All right. So basically said that that's just the way we do things around here was the single fastest way to obscurity and embodies the very definition of complacency. Which is why it's important to think about your business, in in a very adaptable way, and being forward thinking. And every company on the planet has departments. And that's necessary, just like every mall mall, that exists has different department stores. And you got to naturally organize people in groups together in a logical way. But when it comes to strategy, strategy is bringing together a collection of moves towards a unified goal. And you might not be your your teams are not your only things at your disposal, you have other moves that you can make, and you can think differently. And the beauty with strategy is there's no set playbook. So if you want to approach business from a unique standpoint, that's less department focused and more customer focused. It starts with defining that journey.
KJ
Well my first question is, so are you radical enough to say, eliminate departments altogether and replace it with customer lifecycle?
Stephen N.
No, I think there's value.
KJ
You still find value in having departments?
Stephen N.
I mean, there's value in let me get my engineers together and talk about how we're going to solve this particular problem for customers. Right? I mean, if you look at sales, sales, people have unbelievable networks, they they're connected to 1000s of people. If you went to your, your sales team, and you have 25 salespeople, and you said, Hey, guys, this quarter, this group is going to be super focused on driving customer awareness. Yeah, we got to our day jobs, we got to close business. But we have been tapped to do a customer awareness play. And we need everybody to be singing and promoting and broadcasting all the stuff that we're gonna be putting out for marketing, we're gonna help marketing. You've just amplified your message using your sales team. On the other other end of the spectrum, hey, we have a problem with churn. All these customers that you guys signed a year ago, they're pissed off, let's improve our customer loyalty. Let's do a campaign to our customer base, using the people that saw those deals to generate good feedback and build the relationship back. Right. I mean, that's, that's on the opposite end of the spectrum. It's the same team. It's just deployed strategically in different ways. Yeah, you got your you got your day to day job, you got to sell deals, and you gotta make money. Sure. But everybody wears the number of hats with your job. Otherwise, you're just a monkey. Right?
KJ
Well, what needs to be clear is that you're not advocating for an organization. No structure change to departments you're advocating for keeping the departmental structure, but deploy the departments in that structure through the lens of the customer lifecycle.
Stephen N.
Yeah. And the beauty here. When it comes to OKRs, it's not a permanent thing, right? It's not like, hey, sales team. Now your job is not only to close deals, but your job is also to do social awareness on LinkedIn, or whatever.
KJ
So that's, that's what we're getting at is like, there's the premise here is that if multiple departments can collaborate together, cross functionally, you harness the power of more people, rather than looking at a marketing problem with just marketers, you bring in product engineers, you bring in product, people, engineers, sales, and they all look at the problem together, and they figure out a better solution than if it was just marketers. So the question then is, if that's what we're going for, right? That's what you agree, you're kind of proposing the why not just eliminate departments altogether, and have this sort of, you know, pod of people that go around that are made up of a mixture of skilled people?
Stephen N.
Well, I'm not saying that you can or cannot do that eliminate departments, I think it makes it easier to deploy those resources strategically, when you're a part of a group. You're in the boat with a group, but you're helping another group, but it's ultimately geared towards the customer. I think that if you just eliminated departments altogether, you would have a very adaptable and agile organization. But it might be a little too chaotic, right? I mean, it's like, it's like a four dimensional chess board, it's a little bit too much. There is value in structure. But I think there's a natural evolution to the way companies exist. And they all exist in these departments. And they naturally create silos, if you kind of eliminate that as the core part of your strategy and say, let's define the customer journey, or our employee journey. And then let's deploy our different resources at different touch points, then you can get a lot more value out of those groups, as opposed to finger pointing between like, sales and product and marketing and sales and success and sales. Yeah, everybody's point of sales, basically. So
KJ
Yeah, there's a lot of that. But eliminating departmental silos, which is what you said, that's pretty extreme. So it's not eliminating them. silos, it's sort of you li utilizing the silos more collaboratively and through just through a lens of customers.
Stephen N.
Yeah, it's not eliminate, like silos naturally exist. It's, you just don't want them to be so tall that you can't even engage with another group.
KJ
Exactly, lowering the walled silos.
Stephen N.
Yes, breaking down the barrier, you can still have a little barrier that you got to jump over a little, you know, little collection of rocks and pebbles that you might have to jump over to get to the other group, but you just don't want it to be a wall.
KJ
Yeah, I think that's really important, though. That part is like, you know, yeah, the wall is important. But you don't want it to be too tall either.
Stephen N.
Yeah. Because you just don't want to be like in your world and doing your job. And then just have other groups bombard you with stuff. You want to be able to defend your territory. But be open minded. It's not a black and white situation. It's just right, right now, as so many companies exist today. When it comes to defining their strategy. It's okay guys, we're going into the next year. Marketing, what are you doing sales? What are you doing engineering? What are you doing success? What are you doing? There is no real. I mean, there's cross departmental collaboration to to a certain extent, but in terms of like the framework of your strategy? If you have a defined customer journey, and then you can start to you can assign ownership, but you know, primary and secondary strategy and resources getting deployed at each point like you can get more creative I think.
KJ
My suspicion is that people start to use OKR so that they can have that strategy conversation so that the top leader can go okay exactly product, what's your OKR for the year marketing, what's yours but, they're you using it so that they can facilitate the department heads seeing other people's OKRs and then see if "Oh, marketing's working on that thing. I didn't know marketing was working on that thing. Hey, here, call me after the meeting. And we can discuss that OKR of yours because I can help there." So really, my suspicion is the value of the OKR thing is just it ignites a conversation, because it visible, it makes everything visible to people who did not previously know it was visible.
Stephen N.
Yeah. And not only like, these are the things that we are doing, but also getting feedback of why are we still doing this? I mean, one of the biggest two, as a marketer, like one of the biggest ways I've been able to get credibility with sales teams, is I just hate like white papers and ebooks, I just think it's a colossal waste of time. It's a vanity metric. I don't support it. There are great assets out there that you can create. But like I'm I don't want to do that. So many salespeople that I've talked to have hated this about marketing, and they continue to produce this crap. And then so there's no, because there's no forum for the head of sales to say, why are we still doing this crap you're making your numbers look good, and you haven't delivered anything of quality to my team? And, so guess what just happened? A barrier was created. And you have now you have silos and you have friction? And that's not a good strategy.
KJ
Totally, yeah. And that forums, an interesting one, that leadership, you know, leadership executive level, you know, meetings, we'd say probably, let's say monthly, or maybe they do them quarterly, sometimes, folks do them on a certain cadence. And those meetings, tend to be defensively minded. If you're the head of the department, I don't know, well, maybe that's asked you, you were the head of marketing, when you would go to those meetings? Or do you be defensive? Because you know, your boss is there, and all the other head of departments are there, and you have to stand up and sort of go, I swear, marketing is okay, right now, you know?
Stephen N.
Yeah, my experience is always been just defending the numbers, when I really shouldn't have needed to defend the numbers, the numbers are what they are. That's not problem solving. Like that's not helping me select the things that I'm working on or want to work on, or how I can work with other teams I never really saw because we were structured at so many of the companies I've been at, like by team, it was just every team, you have your numbers and your numbers are always bad. Yeah, that's not a that's not a very empowering forum. It's just new. It's a constantly being on the defensive.
KJ
Because the numbers, the indicator, the representation of you, and your team, and there, you get attacked with the number. And then ultimately, the numbers all add up to this big huge number, where the SaaS company wants to sell, you know, so we have to hit all of our numbers, so we can hit this one. So we can sell. And that focus, that obsession, I would go, as far as saying transcends itself into "What's your number, Stephen?" Then you get defensive that I have to defend this number.
Stephen N.
Yeah, I mean, because really, you should only be from an OKR standpoint, you don't want to have a ton, you wanted to just have a couple, like a couple of different OKRs that are the priorities for the business. And if you get to a point where you have flexibility to take on different things, and you're not as concerned with your particular number, then I think you can get a lot more creative and you get other people involved. Whereas total, if you're just tracking 12,000 different metrics, and 11,999 are good and the green, but what the hell is going on with that one in the red, like, it's not really a great environment to be in.
KJ
Tip one, select very few core numbers. Tip two, is if you want to stifle ambition, then focus on the number because that's the best way to do it. Like people learn about the OKR is by Google and Google grew tenfold because of OKRs yet, but if you dig under the surface a little bit. What they did was they were outrageous with their targets. They were really ambitious. They went ambitious rather than outrageous. They went yeah, let's you No, make a million searches on Google or something. And they didn't hit the number. And do you think Larry, in your mind got up there and, you know, beat the head off him because he didn't hit his number. No, he didn't, they didn't get close, whatever the story is, you might remember the numbers, but they like missed the number by 60%. You know, they wanted a million and they got 600,000 or something. And they didn't get in trouble. They weren't this health focus. It was like You aimed really high, and you missed but you aim really high. And now aim really high again next year, and keep aiming really, really high. And they eventually blew their number out of the out of the sky, because there wasn't this obsession with hitting a million. It was like How high could you go with that? How ambitious can you get with this?
Stephen N.
Yeah. And I believe it was the Google Chrome browser. It was 100 million. They're trying to get to 100 million users. And they had like 10,000 in beta or something. It was, it was a it was an asinine number. Yes. But the difference was, alright. This is why OKRs is a great mechanism to drive and empower people. It's because the guys sign up for 100 million Google Chrome users. Right? And it wasn't, well, it's been six months, and we've only got 25,000, you're fired. It's okay. Let's keep going. What do we learn? What do we do? Well, what's the feedback? Let's keep pushing. Let's keep going. Like, yeah, we've missed that we've missed the mark. We've missed the number, we're way short, but we stick with it, we stick with it, we stick with it. And you don't get chastised when you fail and then you are empowered to do things differently. So they think outside the box and get more creative. And then for you know, that took a little bit of time, but you hit your number. So it's like, the timing element is purely a reflection of the decisions you make. Sometimes it takes longer, because it needs to take longer. But if you start that process, and you are guaranteed to hit the 100 million, but it was going to take you maybe two or three times longer than you thought, you would still sign up for that.
KJ
Or the alternative is you hit the number shorter. But you chastise people, you create a toxic work environment, and people are absolutely miserable. So when they hit the number, they don't want to celebrate. They just want to go down and lie in in their bed and cry. You know what I mean? Like, which do you rather? Do you value the number over the people or the people over the number?
Stephen N.
But you know, it's true. But, I think the important part here is that it was an unequivocal Northstar. Yeah, like, and this is really hard. And this is why so many companies, they defer to revenue as the Northstar, because it's the least common denominator for most people, or the easiest to understand. We all have money. What's interesting about that particular case study with Google is it was a Northstar that didn't change. Like that, was it that was unequivocally the value that that was going to be had from that OKR was the number of users on Google Chrome. Because that was so well crystallized, that there was there was no ambiguity in terms of how success was measured. If that was the measurement of success, it's really hard to do.
KJ
It's really hard to get that, you know, unification behind this North Star, that means more than just revenue. But what they really hard to do, but it's possible, we have to say that to everyone, it's possible that you can have the Great North Star, and you can have the revenue and all the money and not alienate and chastise and destroy people's, you know, well being in the process, you can have both. There's a reconciliation between having a great place to work and making all your money and your downloads, you can make it work. But if you just focus on the downloads, not the other part. That's why the OKR is so great is because it can reconcile it all.
Stephen N.
What's interesting too, is it's also a free product. So the barrier, the barrier there is very low that the there's not a lot of friction, the friction is just making a decision and setting it as your default browser. Basically To get consistent usage, it's, it's an interesting factor to the equation because like we can say, well, we want say we were to talk about ourselves for a moment, say we were just completely open source. And we just gave away our product to anybody and everybody. And the only way we would make revenue is based on services and training in that world, then we can say, well, we want as many people as humanly possible. Every Tom, Dick and Harry using our platform, we want to get a million users on a platform in the next five years. Now, because there's no ambiguity, and there's no finger pointing in terms of how this is sold or marketed, it's just like, that's the number, you're free to do whatever you want to get to that number. Whereas when you factor in money, it becomes much more difficult, right? Like, yeah, we can get a million users, if we gave away for free. If we're charging $100 million per user, we're not getting anybody. Right? The last bit I'll mention is the key results piece, if you bring together a common objective, like I don't know what their objective was on that one, say it was become the number one browser in the world. And their key result, maybe that was their only key result, get 100 million users. But if it was 100 million users with a certain retention or activation or active user count, which measures satisfaction with the satisfaction of the team, you start to combine volume and quality in health metrics so that you're not gaming the system. I think that that's a really good way to have a conversation around how you are really going to measure success without being detrimental to another metric?
KJ
Totally? Yeah. Talk about this all the time with mid-market b2b SaaS companies, it's critical that they don't just focus on quantity, but also quality. That's an efficiency. So though, that's the value equation, you know, you could you could send a report every week, but if no one opens it, what's the point? So, you know, it's, that's just one example. But it has to be of a quality, and it has to be done efficiently.
Stephen N.
And it's got to be to the benefit of others.
KJ
Exactly that.
Stephen N.
That is the definition of value. That's all right. I think ultimately, to kind of put a bow on it, though. When it comes to defining your strategic framework, the value of a customer centric framework is that, number one, it simplifies the way you look at your business. Number two, it reduces the number of departmental silos. And number three, it enables you to deploy resources at your bottlenecks much more effectively. If you look at any SaaS company, they all have funnels, they measure and optimize down the funnel. Wherever the bottleneck is, that's where the problem is. And instead of just blaming a team for the problem, you can get everybody on board to solving a problem. And I think that is a good strategy.
KJ
And once you introduce OKRs, into that strategy and that lens that approach, you select your Northstar, make it clear, make it simple, make it focused, and you combine that with behaviors that don't chastise people for missing targets, but embrace them for aiming high. Be happy with you if you aim high and miss but I'll be angry with you if you aim low and hit. Someone said that somewhere.
Stephen N.
Shoot for the moon. Even if you miss you'll be amongst the stars.