This is the time of year where next year’s success starts. If you are going to nail 2021, then you need to go into the New Year already knowing what success looks like and what your plan is to get there. If you are starting this process in January, you will already be behind.
Fortunately, I’ve found that annual planning can be pretty straightforward. In fact, you only need to identify 3 top-level Objectives:
Pretty much everything you’ll need to plan out for next year will fall into those three objectives.
The trick is how you define your objectives and understanding how you will know if you are meeting those objectives (or not!).
This year, I’ve been blending two systems for planning these out.
I like the way the OKR (Objectives & Key Results) prescribe creating inspirational objectives and then identifying measurable results that let you know if you've hit them.
I also like the way Traction’s EOS (Entrepreneurial Operating System) uses the idea of ‘rocks’ to help maintain focus on the things that will most move the company forward and set specific accountability.
I call my blended system OKRocks.
Here’s how it works. First, design your three top-level objectives, starting with your growth objective.
Your growth target simply identifies the level of revenue you want to generate. But how you state the objective can really have a lot of impact.
You could say simply:
“Grow revenue to $5M.”
No problem with that, really. But you could also say something like:
“Build a Customer Flywheel that reliably generates $5M/year in revenue.”
Now we’ve got something that speaks to our target revenue and HOW we want to make it happen.
Either approach is fine, as long as EVERYBODY on the leadership team agrees and buys in.
Once we have the Objective dialed in, we can think through our Key Rocks. Our Key Rocks are measurable results that will tell us if we are succeeding in meeting our objective.
There are going to be multiple functions that contribute to hitting a growth objective, so it becomes a discussion amongst the different teams to generate the Key Rocks that will be tracked each week.
Some Key Rocks for the revenue goal might be:
“Systemize outbound sales to sustainably reach 300 prospects/month.”
“Increase monthly prospect conversations by 20%.”
“Increase inbound leads by 20%.”
“Increase conversion rate to 20%.”
“Release new product and get 20% of current customers to adopt.”
“Decrease churn by 2%.”
The important thing about Key Rocks is that they are specific and measurable - and most critically, are assigned to someone to own.
Each function will create their own set of Objectives and Key Rocks. It’s super important that they roll back up to the three top-level Objectives.
Get this process right and everyone in your org will be aligned and focused on where to put their efforts.
Stay tuned for Part II when I’ll talk about setting mission/vision/impact and organizational objectives.
Until next time,
Helping Founders Build Rocket Ships
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