Most of the Writing on OKRs: How They Apply to Services Businesses
In a world predominantly focused on product-oriented OKRs (Objectives and Key Results), a common question arises: How do OKRs apply to businesses that offer services rather than products? This article explores the dynamics of implementing OKRs in services businesses, such as agencies, consulting firms, law practices, and more. We’ll delve into the intricacies of setting success metrics, objectives, and key results that align with the unique nature of services-based organizations.
Setting the Stage: OKRs for a Content Creation Agency
Consider the scenario of a content creation agency that specializes in crafting short and long-form content for authors, industry thought leaders, and aspiring keynote speakers. Such agencies thrive on saving clients time while enhancing their brand presence. In a services-based model, the challenge lies in aligning OKRs with intangible deliverables like expertise and time.
Defining the Objective
The first step in setting OKRs for a services business is to define a clear objective. In this case, let’s assume the agency’s strategic focus is on helping executive leaders build public credibility on social media and eventually write books. The objective could be framed as follows:
Objective: Enhance Public Credibility and Thought Leadership for Executive Clients
Crafting Key Results
Key results in a services context need to be specific, measurable, and directly tied to the behavior changes that can be influenced. Applying the “who does what by how much” framework, the agency’s key results could include:
- Renewal Rate Improvement: Achieve a 20% increase in client contract renewals, reflecting client satisfaction and value delivery.
- Rewrite Reduction: Decrease the average number of requested content rewrites per customer by at least 30%, showcasing improved content quality.
- Referral Inbound Leads: Generate a 15% growth in inbound leads to the agency’s business through client referrals.
- Operational Efficiency: Enhance the efficiency of onboarding new clients by streamlining processes, leading to a 25% reduction in onboarding time.
- Billing Process Optimization: Implement improvements in invoicing and billing, resulting in a 20% reduction in billing disputes.
- Internal Training: Establish comprehensive internal training programs to enhance staff expertise and performance, resulting in a 15% increase in content quality scores.
Avoiding Risky Key Results
A critical aspect of setting OKRs for services businesses is avoiding key results that are distant from the organization’s direct control. It’s tempting to associate success with external metrics like client success or commercial outcomes, but these can be influenced by myriad external factors.
The Perils of Indirect Control
For instance, aiming to “increase LinkedIn followers by 50%” for clients could backfire if the client’s actions impact the results. Similarly, linking OKRs to goals like “drive at least 10,000 books sold” exposes the agency to the uncertainty of market trends and external events.
Focusing on the Controllable
In contrast, successful services businesses use OKRs to influence behavior changes within their control. Rather than tying success to outcomes like books sold or social media metrics, concentrate on aspects such as content quality, client satisfaction, and operational efficiency.
Navigating OKRs in a services business demands a unique approach that centers on behavior changes within the organization’s control. By setting objectives and key results that prioritize client satisfaction, operational efficiency, and expertise enhancement, services businesses can leverage OKRs to drive meaningful growth and success. Remember, the true essence of OKRs lies in measuring what can be influenced and improved from within, fostering a culture of continuous progress.
FAQ
What are OKRs in a services context?
OKRs (Objectives and Key Results) applied to services businesses focus on setting measurable goals that align with the organization’s unique service offerings and capabilities. These goals emphasize behavior changes that the business can directly influence.
How can services businesses measure success through OKRs?
Services businesses can measure success through OKRs by aligning key results with tangible improvements within their direct control. This might include client satisfaction, operational efficiency, referral leads, or quality enhancements.
Why should services businesses avoid indirect key results?
Indirect key results, such as client success metrics or commercial outcomes, introduce external factors that are beyond the business’s control. Relying on these metrics can lead to misaligned expectations and potential risks.
How do services businesses balance external and internal goals?
Services businesses should prioritize internal goals that they can directly influence. While external goals like client success are important, it’s crucial to focus on factors that the business can manage, such as content quality, operational efficiency, and client satisfaction.
Can services businesses benefit from OKRs?
Absolutely. OKRs offer services businesses a structured framework to set, track, and achieve goals that drive meaningful changes within their operations. By aligning key results with controllable factors, services businesses can enhance their performance and client satisfaction.
How do OKRs contribute to services business growth?
OKRs contribute to services business growth by emphasizing improvements in controllable areas. These improvements lead to enhanced client satisfaction, streamlined operations, and increased efficiency, all of which contribute to long-term growth and success.
