All about OKR grading

Grading in OKRs refers to the process of evaluating the progress made towards achieving the objectives and key results set in the OKRs. The grading process helps to determine the level of success achieved and provides feedback on areas that need improvement.

Here’s how to grade OKRs:

• Frequency: OKRs should be graded regularly, typically at the end of each quarter or half-year. This helps ensure that progress is being monitored regularly and that any necessary adjustments can be made in a timely manner.
• Who should grade: OKRs can be graded by the individuals who set the objectives, their managers, or a designated team within the organization. It is important to ensure that the grading is done objectively and consistently across the organization.
• Criteria: The criteria for grading OKRs should be based on the specific objectives and key results set in the OKRs. For example, if the objective is to increase sales by a certain percentage, the criteria for grading might be the actual sales figures achieved.

In general, OKRs are graded on a scale of 0-1, with 0.0 indicating no progress and 1.0 indicating full attainment of the objective. Grading provides a clear picture of progress and allows individuals and teams to focus on the areas where they need to improve.

It is important to note that the grading process should be a supportive and constructive feedback mechanism, rather than a source of stress or negativity. The focus should be on learning and continuous improvement, rather than on assigning blame or punishment for not achieving objectives.

OKRs can be graded at different frequencies, depending on the nature of the objectives and the goals of the organization. Here are two common approaches to grading OKRs:

End of cycle grading: OKRs are graded at the end of each quarter or half-year, after the set timeframe for achieving the objectives has passed. This approach is suitable for objectives that are long-term or have a significant impact on the organization and its operations.

Weekly or monthly grading: OKRs are graded on a regular basis, such as every week or every month. This approach is suitable for objectives that are more short-term or have a smaller impact on the organization. This approach provides more frequent feedback and allows individuals and teams to adjust their focus and priorities on an ongoing basis.

Ultimately, the frequency of grading should be determined by the nature of the objectives and the goals of the organization. Both end of cycle and frequent grading have their benefits, and the approach that is chosen should align with the overall strategy and goals of the organization.

Grading OKRs too often can lead to several problems, including:

• Over-emphasis on short-term results: Frequent grading can create a focus on short-term results, rather than on long-term goals and objectives. This can lead to a reduction in the strategic focus of individuals and teams and a lack of commitment to achieving meaningful and impactful results.
• Increased stress and pressure: Grading OKRs too frequently can increase stress and pressure on employees, especially if the grading process is overly punitive or negative. This can lead to decreased motivation and engagement, and may even lead to burnout or high turnover rates.
• Decreased creativity and innovation: If grading OKRs is done in a rigid and prescriptive manner, it can stifle creativity and innovation. Individuals and teams may be reluctant to take risks and try new approaches if they are constantly being judged and evaluated.
• Reduced focus on learning and continuous improvement: If grading OKRs is done in a way that emphasizes fault-finding and punishment, rather than learning and continuous improvement, it can reduce the focus on growth and development. This can lead to a lack of progress and an inability to adapt to changing conditions and requirements.

In general, it is important to ensure that the grading process is supportive, constructive, and focused on continuous improvement, rather than on punishment or blame. This can be achieved by setting clear criteria for grading, involving employees in the grading process, and providing regular feedback and coaching to help individuals and teams achieve their goals

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There is a strong linkage between a company’s vision and strategy and their OKRs. OKRs (Objectives and Key Results) are a tool used to align and drive progress towards a company’s overall vision and strategy.

Here’s how to create the linkage between a company’s vision and strategy and their OKRs:

• Start with the vision and strategy: Clearly define the company’s vision and overall strategy, including the goals and objectives that support the vision and strategy.
• Align OKRs with vision and strategy: Ensure that the objectives and key results of each team and individual are aligned with the company’s overall vision and strategy. This helps ensure that everyone is working towards a common goal and that progress is being made towards the overall vision and strategy.
• Communicate the linkage: Clearly communicate the linkage between the company’s vision and strategy and the OKRs to all stakeholders, including employees, managers, and executives. This helps ensure everyone is aware of the overall goals and objectives and understands how their work contributes to the vision and strategy.
• Regularly review and adjust: Regularly review and adjust the OKRs to ensure they are aligned with the company’s vision and strategy. This helps keep the focus on the most important goals and objectives and ensures progress is being made towards the overall vision and strategy.

By creating a clear linkage between a company’s vision and strategy and their OKRs, organizations can ensure that everyone is working towards the same goals and that progress is being made towards achieving the overall vision and strategy.

Google has a company purpose of “to organize the world’s information and make it universally accessible and useful.” This purpose serves as the guiding principle for the company and informs their overall strategy.

Google’s OKRs are aligned with this purpose and focus on improving their products and services to better serve their customers. For example, one of their OKRs might be “Improve search results relevance by X% within the next quarter.” This objective is aligned with their company purpose of making information accessible and useful, and the key result (improvement in search results relevance) helps measure progress towards that goal.

Another example might be “Expand Google Maps coverage to X new countries within the next year.” This objective aligns with the company purpose of organizing information, and the key result (expansion of coverage to new countries) helps measure progress towards that goal.

By aligning their OKRs with their company purpose, Google is able to focus on the most important goals and objectives and ensure that everyone is working towards the same vision. This helps drive progress towards achieving their company purpose and ensures that their products and services continue to improve and meet the needs of their customers.

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Here’s a general roadmap for implementing OKRs (Objectives and Key Results) across an organization:

• Awareness and education: Start by raising awareness and educating all stakeholders, including employees, managers, and executives, about OKRs, their benefits, and how they will be used in the organization.
• Define the OKR process: Define the process for setting, tracking, and achieving OKRs, including who will be responsible for setting and tracking OKRs, how often they will be reviewed, and how progress will be communicated.
• Define OKRs for teams: Work with teams to define their objectives and key results. Encourage teams to set ambitious, but realistic, goals that align with the organization’s overall strategy.
• Pilot phase: Launch a pilot phase with a select group of teams to test the process and make any necessary adjustments. This phase should provide feedback to refine the OKR process for the organization.
• Roll out OKRs to the rest of the organization: Based on the results of the pilot phase, roll out the OKR process to the rest of the organization. Provide ongoing support and training to help teams get started and ensure they are effectively using OKRs.
• Monitor progress and adjust: Regularly monitor progress and adjust the OKR process as needed to ensure it is effective and efficient. Celebrate successes and learn from failures to continuously improve the OKR process.
• Make OKRs a habit: Make OKRs a habit in the organization by regularly setting and tracking progress, celebrating achievements, and encouraging teams to continuously improve.

This roadmap should provide a general framework for implementing OKRs, but the specific timeline, approach, and details will vary depending on the size and complexity of the organization and the specific goals and objectives of the OKR implementation.

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Client centricity plays a crucial role in improving EBITDA for B2B companies. When a company is client-centric, it focuses on understanding and meeting the needs of its customers. This can lead to a number of benefits that can help to improve EBITDA.

Knowing the Client needs : Firstly, by understanding the needs of its customers, a company can create products and services that are tailored to meet those needs. This can lead to increased sales and higher profit margins. Additionally, a company that is client-centric is better able to identify and address any pain points that its customers are experiencing, which can lead to improved customer satisfaction and loyalty.

Communicate & Collaborate : Secondly, when a company is client-centric, it can lead to better communication and collaboration with its customers. This can help to build strong relationships, which can lead to repeat business and positive word-of-mouth recommendations. This can lead to increased sales and improved profit margins.

Agile Mindset : Lastly, when a company is client-centric, it is better able to anticipate and adapt to changes in the market. This can include changes in customer needs, competitor activity, and industry trends. By being able to anticipate and adapt to these changes, a company can be more agile and better positioned to capitalize on new opportunities.

In summary, client centricity plays a vital role in improving EBITDA for B2B companies. It enables companies to create products and services that meet customer needs, build strong relationships, and anticipate and adapt to changes in the market. All of these factors can lead to increased sales, improved profit margins, and overall growth for the company.

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Here are 7 problems and their impact of Poor Client centricity in B2B Sales Teams:

1. Lack of trust and credibility: Without a clear understanding of the client’s needs, wants and pain points, it can be difficult for salespeople to build trust and establish credibility with potential customers.
2. Difficulty in differentiating products or services: Poor client centricity can make it difficult to effectively communicate the unique value of products or services to potential customers, which can make it more challenging to differentiate and win deals.
3. Lack of effective value proposition: Without a clear understanding of the client’s needs, it can be difficult to create an effective value proposition, which can make it challenging to close deals.
4. Poor lead qualification: Without proper client centricity, it can be difficult to identify and qualify leads that are most likely to convert into customers.
5. Difficulty in retaining customers: Poor client centricity can lead to a lack of understanding of the client’s needs, which can make it more challenging to retain customers over the long-term.
6. Difficulty in upselling and cross-selling: Without a clear understanding of the client’s needs, it can be difficult to identify opportunities for upselling and cross-selling, which can limit revenue growth.
7. Difficulty in understanding the client’s industry and business environment: Poor client centricity can make it difficult to understand the client’s industry and business environment, which can make it challenging to anticipate and respond to changes in the marketplace.

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B2B companies may find it difficult to improve NPS or client satisfaction for a variety of reasons, including:

• Complex products or services: B2B companies often offer complex products or services that are difficult for customers to understand or use. This can lead to confusion and dissatisfaction among customers.
• Long sales cycles: The B2B sales cycle is often longer than the B2C sales cycle. This can lead to delays in the delivery of products or services and can cause dissatisfaction among customers.
• Lack of personalization: B2B companies often deal with multiple decision-makers and stakeholders within a single organization, which can make it challenging to personalize the customer experience.
• Limited customer interactions: B2B companies may have fewer interactions with customers than B2C companies, which can make it difficult to gather customer feedback and identify areas for improvement.
• Limited resources: B2B companies may have limited resources to devote to customer satisfaction initiatives, such as hiring customer service representatives or investing in customer feedback systems.

Meeting Service Level Agreements (SLAs) in B2B organizations can be difficult for a variety of reasons, including:

• Complex products or services: B2B companies often offer complex products or services that require specialized knowledge or expertise to maintain or repair. This can make it difficult to meet SLAs for repair or maintenance times.
• Long sales cycles: The B2B sales cycle is often longer than the B2C sales cycle. This can lead to delays in the delivery of products or services and can make it difficult to meet SLAs.
• Limited resources: B2B companies may have limited resources to devote to meeting SLAs, such as hiring additional staff or investing in new equipment.
• Lack of standardization: Different customers may have different expectations for service and support, which can make it difficult to standardize SLAs across all customers.
• Dependence on third-party vendors: B2B companies may rely on third-party vendors to provide certain products or services, which can make it difficult to control and meet SLAs.
• Limited visibility: B2B companies may have limited visibility into the performance of their products or services after they are delivered to the customer, which can make it difficult to identify and address issues that are impacting SLA performance.

If your are looking for improving ways to meet your SLAs, please contact us

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Sustaining client centricity can be difficult for a number of reasons, including:

• Resistance to change: Implementing a client-centric approach may require changes to existing processes and ways of doing things, which can be met with resistance from employees who are comfortable with the status quo.
• Lack of understanding: Without proper training and education, employees may not fully understand the benefits of a client-centric approach or how to implement it effectively.
• Limited resources: A client-centric approach may require additional resources, such as increased staff or technology, which may not be available.
• Lack of accountability: Without clear accountability and oversight, it can be difficult to ensure that a client-centric approach is being implemented and maintained.
• Difficulty in Measuring Success: Without clear metrics to measure the success of a client-centric approach, it can be difficult to evaluate its effectiveness and make adjustments as needed.

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There are several common ways to improve the existing account growth in B2B companies, including:

• Building strong relationships: Building strong relationships with existing customers is essential for growing their accounts. This can involve regularly communicating with customers, understanding their needs and goals, and going above and beyond to meet their expectations.
• Offering additional products and services: Another way to improve account growth is by offering additional products and services to existing customers. This can help to increase the value of each account, and can also help to cross-sell and up-sell additional products and services.
• Providing excellent customer service: Providing excellent customer service is also key to improving account growth. This can include responding promptly to customer inquiries, addressing customer concerns, and resolving problems in a timely and efficient manner.
• Offering customized solutions: Offering customized solutions to existing customers can help to increase the value of each account. This can include tailoring products and services to meet the specific needs of each customer, and developing specialized solutions that are not available to other customers.
• Implementing customer retention programs: Implementing customer retention programs can help to improve account growth. This can include loyalty programs, referral programs, and other incentives that encourage customers to continue doing business with a company.
• Regularly gathering customer feedback: Regularly gathering customer feedback is another way to improve account growth. This can include conducting surveys, focus groups, and other research to understand customer needs and preferences. This feedback can be used to improve the company’s products or services, and to develop strategies for retaining and growing existing customers.

They are all prescriptive. The question is, which one of these is relevant to your organization and why? That clearly depends on your current state, ground level challenges and growth aspirations. Only by implementing relevant strategies, B2B companies can work to improve the growth of existing accounts and drive sustainable growth for the company.

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Agile enterprises are customer centric because they prioritize the needs and goals of their customers in all aspects of their business. Agile methodologies, such as Scrum and Kanban, are designed to be flexible and responsive to change, which allows organizations to quickly adapt to the evolving needs of their customers.

In an agile enterprise, customer feedback is actively sought and incorporated into product development and decision-making processes. This allows the enterprise to continuously improve and deliver products and services that align with customer needs.

Additionally, Agile enterprises also tend to have a flat organizational structure, which allows for better communication and collaboration across teams and departments, enabling them to respond more quickly to customer needs. They also tend to use cross-functional teams, which are composed of individuals from different areas of the business, such as design, development, and marketing, to work together to deliver products and services that meet customer needs.

In summary, Agile enterprises are customer centric because they prioritize the needs of their customers, actively incorporate customer feedback, and continuously improve their products and services to meet those needs.

One example of how agility helped in client centricity is the case study of a large retail bank that implemented an Agile approach to managing their customer service operations.

The bank was facing a significant challenge in maintaining high levels of customer satisfaction, as their traditional, hierarchical structure was causing delays in responding to customer complaints and requests. Additionally, the bank was facing increased competition from fintech companies that were more agile and able to respond quickly to changing customer needs.

To address these issues, the bank decided to adopt an Agile approach to managing their customer service operations. They formed cross-functional teams composed of representatives from different areas of the business, such as customer service, IT, and compliance, and implemented daily stand-up meetings to ensure that everyone was aware of the most pressing customer issues.

The bank also began actively seeking customer feedback and incorporating it into their decision-making processes. They also implemented a system for tracking customer complaints and requests in real-time, which allowed them to quickly address and resolve issues.

As a result of these changes, the bank was able to significantly improve their customer satisfaction levels and reduce their customer complaint resolution time. The agility helped them respond to the changing customer needs in a timely manner. Additionally, the bank was also able to reduce costs and improve overall efficiency, which helped them better compete with fintech companies.

This case study shows how agility helped in client centricity by allowing the bank to respond more quickly to customer needs, improve customer satisfaction, and ultimately increase competitiveness.

One example of agile client centricity in a startup is the case study of a small software development company that specializes in building custom mobile apps for small businesses.

The company had struggled to retain clients in the past because they were not able to deliver products that met the unique needs of each business. The company decided to adopt an Agile approach to software development, which allowed them to be more flexible and responsive to the evolving needs of their clients.

The company began using Scrum, an Agile methodology, to manage their software development projects. They formed small, cross-functional teams composed of developers, designers, and project managers, and held daily stand-up meetings to ensure that everyone was aware of the most pressing client needs.

The company also began actively seeking client feedback and incorporating it into their development process. They implemented a system for tracking client requests and issues in real-time, which allowed them to quickly address and resolve problems.

As a result of these changes, the company was able to significantly improve their client retention rate. Clients were happy with the product as it met their needs and the company was able to deliver the product on time and on budget. Additionally, the company was able to reduce costs and improve overall efficiency, which helped them to better compete with larger software development companies.

This case study shows how agility helped in client centricity by allowing the company to respond more quickly to client needs, improve client satisfaction and ultimately increase competitiveness.

Here are a few simple ways to start incorporating Agile principles in a non-software environment:

• Start with small, cross-functional teams: Form teams that include representatives from different areas of the business, such as sales, marketing, and operations. This will ensure that everyone is aware of the most pressing customer needs and can work together to deliver solutions.
• Hold regular meetings: Hold daily or weekly meetings to discuss progress, identify any roadblocks, and ensure that everyone is on the same page.
• Prioritize customer feedback: Actively seek and incorporate customer feedback into decision-making processes. This will help ensure that products and services align with customer needs.
• Emphasize flexibility and adaptability: Be open to change and willing to pivot when necessary. Agile is all about being able to respond quickly to changing circumstances.
• Use visual management tools: Use visual tools, such as Kanban boards or task lists, to track progress and identify areas for improvement.
• Encourage collaboration and communication: Encourage open communication and collaboration across teams and departments.
• Test and Iterate: Continuously test and improve the process, gather feedback, and iterate.

It is important to note that Agile is a mindset and a set of principles, not a one size fit all methodology. Therefore, it’s important to tailor the approach to the specific needs of the organization and its environment.

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Blitzscaling is a book by the co-founders of LinkedIn, Reid Hoffman and Chris Yeh, an investor and an author, respectively. The book explores “blitzscaling,” a way to grow your startup quickly by taking big risks. Most of the concepts of Blitzscaling describe classical start-up setups in B2C or D2C. I’ve made an attempt to apply the principles to B2B.

One of the key techniques covered in the book on Business Model Innovation is about four growth factors and two growth limiters. They are new business models that challenge the status quo with unconventional ideas.

 So the quest now is to understand how to drive growth in a B2B setup by using the principles of business model innovation as described in the Blitzscaling method.

Four Growth Factors

1. Market Size
2. Distribution
3. High gross margins
4. Network Effects

Two Growth Limiters

1. Lack of Market Fit/Product/Service Offering
2. Operational Scalability

Market Size

The segment and the type of client the organization wishes to target have to be narrowed down. But a common mistake noticeable in most companies now-a-days is that they cast their “small” net too narrowly.

For example, a B2B software services firm narrows its focus on ERP for the leather industry. While it sounds like a good definition of a target segment and the company may certainly find initial success, in the long run they are likely to run out of prospects. For example, Apple started off targeting the PC market, but today that is only 10% of their revenue. If they had remained focused on the “PC market,” we wouldn’t have iPhones today.

 So the question to ask when you want high growth is:

Question yourself : How large is the market you’re targeting? Is it really reachable? What are TAM, SAM, and SOM?

Distribution

Even with a great product or service offering, without sufficient distribution, do you think the organization will be successful?

Essentially, distribution is the means through which you have access to your target market. Maruti Suzuki, the automotive market leader in India, is unbeatable merely because of its vastly spread distribution network. For B2B companies, this is about their access to the market.

Blitzscaling talks about two distinct ways to maximize distribution: leveraging existing networks and virality.

Can we leverage existing platforms to gain the exposure and traction necessary to reach many clients? Take the example of Paypal, whose growth blitzscaled when it provided easy payments on eBay. So consider if you should bank on an existing installed client base to build your product or service. For example, creating a product or service such as a plug-in or an add-on for customers on the SAP ecosystem or Microsoft. So simply look for a market leader with more than 50% market share and build something for their customers.

Next, consider virality, the process of one customer bringing in additional customers. A very simplified version will be referrals. But for someone to refer to your service or product, you need to consider what their incentive is. Yes, the superlative quality of your product or service is a prerequisite, but also consider the non-monetary value to your patrons.

High Gross Margins

This is common sense in business. But, when you consider this at the time of designing your product or service, you can build businesses with high margins. It’s quite okay if your current business model operates on a high volume, low margin business. Take the example of Amazon. Its profitability does not lie in its low-margin retailing but rather in its high-margin Amazon Web Services (AWS) cloud service.

Question yourself : Is your business generating gross margins as you expected? Are there assumptions that went wrong? Are there ways to drastically course correct?

Network Effects

Network effects are something very similar to Amazon’s flywheel concept, covered in my previous issue. This is typically a B2C concept. The network effect is essentially how an increased user base enhances the value for the users. For example, as more people use Instagram, existing users will find more value from the platform. The same applies to WhatsApp, mobile networks, etc.

While market size, distribution, and high gross margins are design factors to carve out a high-growth business model, network effects are all about sustaining and rapidly scaling that growth to the next level.

B2B companies usually isolate clients and treat each of them separately. Consider the benefits of your clients interacting with each other, sharing their business challenges, and learning from each other. For example, consider the McKinsey Technology Council. It brings together a global group of over 100 scientists, entrepreneurs, researchers, and business leaders, who research, debate, inform, and advise, helping executives from all sectors navigate the fast-changing technology landscape.

There are 5 types of network effects – Direct, Indirect, Two-sided, Local network and compatibility standards.

Question yourself : Is there additional value your clients are deriving from being your client, especially from each other?

Lack of Market Fit/Product/Service Offering

This is listed under limiting factors for blitzscaling growth. As you will realize, this is the dark side of “Market”- the first growth factor of Blitzscaling. From my experience, this is the single most limiting factor for most B2B organizations. Many feel that picking a market that is untapped and full of potential is a lot easier than trying to break into a crowded space. This is more about refinement and less about getting it right the first time. It is about continuous refinement. For example, Indigo Airlines started as a no-fringe airline, but you can’t say that any more.

Question yourself : Is the market satisfied with your product or service? What is missing?

Operational Scalability

Again, this is listed under limited factors and is likely to choke your growth. For example, OYO Rooms stumbled because its partner network lacked quality and consistency, the very same factors it leveraged early on. Similarly, Tesla cars are in demand since their initial launch, but due to the capacity constraints of their manufacturing facilities, they have not been able to meet demand.

Question yourself : What is limiting us to scale? What synergies do you derive in operations from scaling? Efficiency improvements, optimization, cost sharing, etc.

If you are struggling with defining your product or service offering, business model innovation, etc, please feel free to reach out for any assistance.