As Dialogue has grown to surpass $100M in annual recurring revenue, we’ve adopted various tools to build a solid and sustainable infrastructure for the business. Over time, the management team has learned to drive greater clarity and focus regarding business priorities by navigating key trade-offs and setting fewer priorities. In essence, the business has significantly matured as it has evolved through the journey of utilizing three different managerial methodologies: Scaling Up, Objectives and Key Results (OKRs) and the Entrepreneurial Operating System (EOS).
When I arrived as a management consultant in September 2020, the organization lacked an overarching operational system and was leveraging OKRs to guide quarterly and annual strategic planning. After leading the corporate strategy process in Q4 2020, I was invited to attend a two day offsite with the C-Suite (Endurance) team to reflect upon 2020 and establish key priorities for 2021. Although our agenda included several significant topics, we spent 80% of the time engrossed in discussions regarding OKR setting for Q1 2021 and FY 2021. The end result from this exercise was a total of 6 objectives and 34 key results:
FY 2021: 3 objectives and 18 key results
Q1 2021: 3 objectives and 16 key results
Given the 34 key results that were being prioritized for both Q1 and 2021, c-suite leaders engaged in various discussions across different functions and the Executive Management Team (Directors and above) to negotiate priorities and continually modify the KRs. In the run up to announcing these objectives and key results companywide in early 2021, the team was modifying the language of the KRs until minutes before they were announced. The process consumed significant leadership bandwidth and was broken from end-to-end.
We struggled with similar challenges for a few more quarters before hiring a fabulous OKR consultant, Magdalena Pires Schmidt, from How-To-OKR, to support us with reimagining our OKR process. We rolled out a four phase approach over the course of a month which involved: (1) preparing for the quarter (2) writing (3) aligning and (4) transitioning. OKRs are a framework that defines and tracks all the objectives associated with a task and their outcomes. They generally supplement an operating system and serve as a stand-alone goal management strategy. While our processes for delivering OKRs were improving, we were still lacking a holistic approach to guide our core operating system.
In October 2021, we made a decision to adopt the Entrepreneurial Operating System. In an earlier stage, Dialogue attempted to implement Scaling Up, a system by Verne Harnish which includes rocks (priorities) plus critical numbers (both lagging and leading indicators). These elements make Scaling Up similar to the OKR system. However, outside of certain rituals, such as a daily morning stand-up, many aspects of Scaling Up failed to take hold at Dialogue. When we considered implementing EOS, I put forth a business case which outlined several alternative options. Initially, I was resistant to the change. As a member of the c-suite leadership team, I felt threatened by an outside consultant supporting the development of our methodology and downtrodden that my own facilitation skills had somehow fallen short. It was a humbling lesson for me.
In many ways, EOS has been one of the greatest tools that Dialogue has implemented over the past several years. The rollout was supported by Hugo Boutet, a Montreal entrepreneur and EOS implementer. EOS has resulted in a number of benefits such as increased cohesion among our leadership team, a common language across the organization, enhanced operational literacy, a predictable managerial cadence and focus regarding core priorities. As the leader tasked with rolling out this system at Dialogue, I learned several key lessons which can help similar organizations run up the learning curve to successfully adopt EOS and/or OKRs. A few of my key learnings from each methodology include:
Entrepreneurial Operating System (EOS):
Leverage a "W" process for Rock planning. The “W” can be broken into four steps:
Context setting: Prior to each quarter, the CEO and I would align on a high level strategy for the next quarter as well as the context that would be provided to the Executive Management team. We would then share this guidance with the team to kickoff the Rock planning process.
Plans: Each member of the Executive Management team (VP level leaders) would propose their own Rocks / Goals and plans based upon the context. This would then be shared with the leadership team (c-suite) who would use these ideas to shape their own suggestions for company level Rocks / Goals and plans. We also leveraged “One List” which contained all of the sizeable opportunities that the organization may be able to pursue. The list was dynamically populated with a unified scoring methodology across the organization. Opportunities were populated by strategy, tech and product, GTM and operations and vetted by a SWAT team and Steering Committee. The items on this list were used to support development of Rocks, Goals and plans.
Integration: The leadership team would then convene to develop a plan which integrated the Rocks / Goals and plans into a single quarterly plan for the organization. This was then shared back with the Executive Management Team (EMT) for additional refinement.
Buy-In: The EMT leaders would then work with the c-suite team to make final tweaks, confirm buy-in and then begin shaping their own functional level Rocks, Goals and plans. This finalized plan would then be announced at a company All-Hands meeting at least 1 week before the start of the new quarter.
Map out dependencies to identify bottlenecks and capacity constraints - a visual representation of your dependencies can be very helpful. This can be a simple diagram showing which tasks depend upon others. This will help everyone involved understand the dependencies and their impact. Prioritizing dependencies based upon their impact also helps to focus efforts where they are most needed. We found that most organizational dependencies were related to tech and product, GTM and clinical operations, so we invested additional time trying to work through these dependencies each quarter.
When setting Rocks, ensure that a definition for successfully achieving each Rock is articulated up front with agreement from all stakeholders - it’s key to set this up front to drive accountability and clarity regarding closure of each Rock.
“Less is more” - while EOS guidance suggests implementing 3-7 Rocks (quarterly) and Goals (annually), we found that 5 was the magic number. Once we adopted this as a leadership team, the rest of the organization followed suit.
Repeat things at least 7 times to ensure that they stick - quarterly “State of the Company'' meetings are critical for reinforcing messages, providing examples of how Core Values come to life and emphasizing the strategy. We err towards over communicating and providing transparency regarding our financials, clinical outcomes and key challenges, which creates vulnerability and engenders trust.
Pick an off the shelf system to help with implementation and change management - while there are custom built tools to support EOS implementation, we chose to implement Asana due to the prowess of the project management capabilities. By the middle of 2022, the team had completed 23,000 tasks in Asana. Dialogue had the highest adoption of goals of any company in the Asana portfolio with 100% of active users leveraging the goals feature. The system was clearly a catalyst for adoption and standardization of EOS across our business.
Build a team of Ambassadors to support change management and evangelize the program - we were thoughtful about selection, training and recognition in order to ensure that our change agenda was being successfully implemented.
OKRs:
Push for simplicity and clarity - similar to EOS, OKRs should be simple, clear and easy to understand. Simplicity is key!
OKRs should never be difficult to measure - one challenge which we grappled with was the subjectivity of measuring success. Unlike EOS, where Rocks are binary (done or not done), OKRs are graded on a scale of 0-100% with subjective room for interpretation of results and success.
OKRs should be ambitious yet achievable - objectives should be ambitious to inspire and motivate the team, but also realistic and achievable. Setting impossible goals can demotivate the team. Our EOS implementer once said, “OKRs are set for the team to shoot for the stars and hit the moon; whereas, EOS rocks are set for the team to shoot for the moon and hit the moon.”
Involve your team in the process - the comments I mentioned above regarding the “W” framework and a single tool for managing the process hold true for OKRs.
Best practices and tips for Objectives
Avoid consecutive descriptions of ‘to dos’
Avoid expressions that don’t push for new achievements
If the Objective is part of a longer project, describe a clear milestone for the end of your OKR cadence
Describe a clear outcome in the future - place yourself at the end of the upcoming OKR cycle
Ensure that your objectives are clear and understandable for everyone in the company so that employees can create a picture
Continually ask yourself, ‘are these really the 3-5 things you want to crack in the next OKR cycle’?
Best practices and tips for Key Results
Choose the right level in your descriptions and avoid being too granular
Ensure that your KRs are measurable and that you are able to measure them
When not tied to a metric, avoid words like optimize, improve, review, support, consult, help, analyze or participate since your KRs won’t be measurable
Validate that you will smash the objective priority if you reach all of the key result measurements - these should be inextricably linked
Tools such as OKRs, or management systems such as Scaling Up or EOS, are designed to help businesses achieve additional revenue, growth and profit while delivering stronger leadership practices to business owners and leadership teams. Among the three tools, I have found EOS to be most beneficial for fostering a healthy leadership team, driving simplicity, ensuring scalable management practices and measuring results. Regardless of the tool, framework or system, the effectiveness will depend upon the commitment of the leadership team and the entire organization to fully embrace and consistently apply the system.
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