A recent McKinsey report, “Jobs Lost, Jobs Gained,” found that 30% of “work activities” could be automated by 2030 and up to 375 million workers worldwide could be affected by emerging technologies. This is a cause for worry for many, particularly in blue-collar jobs where it is likely that machines will soon be able to take over.
However, there is one group of employees that will likely not have to worry for a while - creatives.
This is where The Dots, comes in. Speaking at one of our strategy events , Pip Jamieson, Founder & CEO of The Dots, described the need for her organization and the importance of KPIs to its success. Where LinkedIn caters for a traditional kind of worker, The Dots is unique because it appeals to the worker of the future. These are your no-collar professionals - your creators, entrepreneurs, and freelancers. These are people whose primary traits are job hopping and have a creative-led and constantly-evolving skillset that is hard to tie down to an old-fashioned static CV.
The objective of The Dots was to take on LinkedIn. Unfortunately, Pip says, KPI's were leading to frustration within innovative teams.
What's wrong with KPIs?
There are a number of problems with KPIs, and when it comes to innovation these are even more pronounced. Pip cites four main issues:
- A KPI has to be achievable, but when innovating, you don't know what is achievable.
- If KPIs are too high- your team will miss the target and will get discouraged
- If KPIs are too low - Your team will hit the target but miss out on a lot of innovation potential
- People end up caring too much about hitting KPIs and don't at all focus on any of the companies objectives
After careful evaluation, The Dots ditched ditch KPI's and move on to:
Objectives & Key Results (OKRs)
With OKRs, the aim is to shoot for the stars (e.g 'we want to be app of the year in our first year). Because all of the goals are very aspirational, it's not seen as a performance tool and it instead becomes about aligning the objectives of the business with every member of the company at every level.
To set an objective & key results, Pip notes that you need a clear vision of your year. To do this you need to do four key things:
1. Leaders and the team have to agree with objectives that have been set. This leads to arguing, which leads to alignment because everyone is articulating their concerns. It also means that issues get addressed at the start of the process as opposed to halfway through the year.
2. Set 3-5 objectives for the business for the year. Under each objective, set a maximum of 3 measurable results. From that list of objectives and key results, it trickles down to each team which takes on the relevant key results to them. These key results further trickle down to the individual level. This breakdown of the objectives and key results means that everyone knows what they are doing on a day to day basis. Therefore, everyone is always ultimately working towards the company's grand objectives.
3. Make objectives and key results open to everyone in the company. Then teams know their grand objective and the exact results, which will ultimately get them to a point where these results become their main objectives.
4. Revisit objectives every quarter and measure it against that quarter.
They also moved on from the Effort-Impact model to the RICE model, which adds:
Reach - Asking your team what percentage of your clients the objective has a chance of impacting
Confidence - What are chances of it actually being a transformative project
These results combined with the impact and effort score gives your overall RICE score, helping the whole organization agree on the priority of objectives and increasing everyone's engagement.
Never set more than five objectives and three results
Measure performance again every month and revisit objectives fortnightly.
You'll mess up the first two quarters, no matter how confident you are
OKRs are ideal for startups and more innovative teams, but harder to implement in more stable, traditional structures
For more of a crash course in radically disrupting your market or how to create effective strategies which deliver agility, join us in September at:
- Disruptive Strategy Summit in San Francisco on 13 - 14
- Chief Strategy Officer Summit in Sydney on 17 - 18