This guide contains the complete background, story, and implementation of OKRs within an example IT hardware company: DeepAuto Solutions, inc.
Background
Brand new startup up technology company with only 7 employees. DeepAuto is developing new infotainment hardware and software to be sold directly to automotive manufacturers. Their team has many direct relationships with automakers and a deep understanding of what automakers are looking for from technology vendors, and where the consumer market is heading.
The company has recently been founded by leadership with OKR experience, so they plan to use OKRs from day one at DeepAuto. Everything will be tracked at the corporate level and led by the CEO Laura in their early days, with plans to expand into more department and perhaps individual focused OKRs as they grow.
Departments
While DeepAuto has departments, they are only implementing corporate level OKRs to start while their team remains small.
Modules
- OKR Management
Integrations
- Google G Suite – DeepAuto uses G Suite to authenticate all users so they don’t need to remember a new password.
OKR Options
| Option | Choice |
|---|---|
| OKR Level | Corporate Only |
| Alignment Methods | N/A |
| Cadence | Quartlery |
| OKR Grading Strategy | Stretch |
OKRs
For our example we will focus on the 2nd quarter of business for DeepAuto Solutions. The team has fleshed out their initial product and go to market strategy, and is now working on delivering prototypes and sales materials to generate interest to establish critical early sales.Corporate OKRs
Initial Meeting
Laura brought her team together before the start of their second quarter to review their OKRs and focus on the next phase of the business. With the small and flat organization they currently have, the entire team was able to identify their complete OKRs during this initial meeting.
Laura started by defining a series of problem statements to present to the team to start the discussion, and they worked together to modify as needed until landing on the following:
- Without products to sell the company cannot succeed, so this is the most critical problem for this business at this stage. In our industry the final product will be heavily customized to the specifications of the auto manufacturer, and being a new company there are no existing products to reference. Because of this it’s paramount to develop not only a product vision, but also manufacture prototypes and sales materials that empower the sales team to garner the interest of potential customers.
- The company requires more time and funding to continue development of products before establishing long-term contracts with automakers. Without additional funding there is risk of failing to establish enough revenue to continue product development. A core focus of management will be to provide a longer timeline to develop the product and develop automaker relationships.
- DeepAuto shares the most common problem of any business: they need more sales! This objective is heavily dependent on the development of the product, but is equally important. The company must establish at least one key contract with an automaker to both fund the business, and entice additional investment to acquire larger contracts.
- While the initial formation of the business mostly relied on documentation and email, they were in need of more formal tools to operate the business as manufacturing began. Without sufficient procedures and software systems they would be unable to scale up.
OKR Formation
At the end of this initial meeting, we’ll have a list of empty objectives like this:
| Objective: | Develop and manufacture a compelling prototype to drive sales |
| Objective: | Close additional funding round of 5m |
| Objective: | Sign 10m in new contracts with auto manufacturers |
| Objective: | Establish a rock-solid foundation of business systems |
Completed Corporate OKRs
After defining their problem statements and identifying objectives, it was time to focus the key results for each objective.
The team has quite a bit of industry experience, and knows what it takes to convince automakers to get a relationship started. They focused their key results around the development of tools to empower sales, such as take away materials and completed demo cars. They also understand that iteration is key, and identified results that ensure they are constantly improving.
Objective : Develop and manufacture a compelling prototype to drive sales
Objective
Develop and manufacture a compelling prototype to drive sales
Key Results
Create a powerful package of sales materials
Manufacture at least 1 new prototype generation each quarter
Ensure product can be manufactured within 10% of competitors
Build a fleet of 3 showcase vehicles to demonstrate prototypes
Next up was the results for their funding objective. In this case Laura decided to track metrics around engagement with new and current investors, as well as a simple goal around the funding committments she needs to secure to stay on track.
Objective : Close additional funding round of 5m
Objective
Close additional funding round of 5m
Key Results
Meet with 1 new investor every week
Meet with 1 existing investor every week
Get commitment of at least 1.5m each month
For their sales objective a key element of their strategy is to quickly identify a short list of vendors and focus their efforts on those organizations. Other key results were all focused on generate engagement with these vendors to ensure the sales team is always on the mind of potential customers.
Objective : Sign 10m in new contracts with auto manufacturers
Objective
Sign 10m in new contracts with auto manufacturers
Key Results
Identify 5 key automaker to pursue heavily for initial contracts
Hold at least 1 on-site presentation per week
Contact every key automaker at least once a week
Draft at least 2 letters of intent per month
Their final objective was kept quite simple. They had some clear goals, but decided to focus on general milestones, rather than any specific metrics.
Objective : Establish a rock-solid foundation of business systems
Objective
Establish a rock-solid foundation of business systems
Key Results
Adopt OKR methodology and system
Launch ERP system
Formalize company culture and employee onboarding