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Agile Operating Model Case Studies

POWERFUL & FLEXIBLE: REIMAGINE HOW YOU CAN DELIVER SUCCESS WITH OKRS

Co-authored by Kayla Cartwright, Brooke Pannell, Ted Tomoyasu, Alan Trivedi,
and Tina Vielot of ADAPTOVATE


Remember these headlines from earlier in 2020?

“A gym owner in Illinois gave out $40,000 worth of equipment to members so they could workout from homeCNN; April 14, 2020

“Planet Fitness and iFit Unite to Bring New Streaming Workouts to Your Home”PRNewsWire; March 17, 2020

“This NYC spin studio switches gears to serve the community amid COVID-19 crisis”BlackEnterprise; April 1, 2020

These companies, among others, responded to a crisis quickly and in meaningful ways. As the world became enveloped by a pandemic, companies had to pivot swiftly.  Despite resource constraints, some organizations, such as Planet Fitness, were able to pivot better than others. How did they do it? 

Companies that respond well to volatile market conditions have these things in common: they are fast to identify high value opportunities, they create a clear outline of what success looks like, and they point all resources toward measurements that matter.  This isn’t easy for any company, so let’s dive into how you might utilize these strategies for your enterprise. 

Articulate what success looks like

Planet Fitness and many other companies have adopted the OKRs (Objectives and Key Results) approach to weather volatility. OKRs drive clarity and alignment by articulating what matters most through Objectives and detailing what success will look like with measurable Key Results.  The OKR methodology was popularized by management expert John Doerr.  Doerr first learned of the framework during his time at Intel and later evangelized it through his best-selling book Measure What Matters. This methodology has been adopted by several large companies including the likes of Google, Amazon, Spotify, and AB InBev; it aligns individual teams to organization-wide goals and outcomes, both in times of economic stability and market uncertainty.

Data from Comparably.com states that 100% of Planet Fitness employees think their department OKRs are clear. This level of clarity is key to accelerating outcomes, especially in the face of a crisis.  In response to how Planet Fitness made such headline making decisions, Chris Rondeau, CEO of Planet Fitness made the following statement:

 “We want everyone to know that we’re here for them, as their long-term partner in wellness, and we’re bringing our Judgement Free Zone to them.”

The organizational priorities, expressed via meaningful OKRs, allowed Planet Fitness to set the highest aspirations, and even in the face of seismic external forces, drive toward meaningful outcomes. How might your organization do the same?

Be aspirational and outcome-driven

Imagine this:  You are the Chief Operating Officer of a large boutique group fitness studio brand, Objective Fitness, with studios in major cities across the globe.  It’s February 2020 and business is thriving as people seem to be sticking to their New Year’s resolutions a bit more this year!   Then a scenario most of us never prepared for happens: a major global pandemic leads even the staunchest of fitness afficionados to stay at home, and governments mandate that gyms and fitness studios must close.  You must help the entire enterprise pivot quickly, despite varying regulations and appetites for exercising outside the home.  How might you address this complex scenario?

We already described how companies who identify high value opportunities and create a clear outline of what success looks like respond best to uncertainty. Let us explore how to create clear and meaningful goals through our fictional case study featuring Objective Fitness and Legacy Fitness. 

Setting the stage

Objective Fitness uses the collaborative OKR approach to align everyone on what success looks like, setting aspirational objectives and measurable outcomes. Legacy Fitness takes a more traditional approach by creating annual goals at the executive level without cascading them across the enterprise. When gyms begin to close due to public health concerns, Objective Fitness Franchisees were able to focus on what really mattered, because their OKRs set a motivating vision of “what good looks like,” no matter the macro environment. Legacy Fitness’s goals left much to be desired in terms of clarity and inspiration, thus it was harder for Legacy locations to pivot creatively and deliver value during the crisis.  

As you can see, Objective Fitness had well-defined yet aspirational goals that allowed their Franchisees to adjust course once their business was disrupted. Legacy Fitness’s objectives, while ambitious, do not give enough clarity or motivation, vastly reducing their ability to quickly adjust course and achieve success in a shifting market.

The Impact of OKRs: Clarity, Motivation and Acceleration

Using the OKR approach, Objective Fitness provides greater clarity as to what success looks like as compared to Legacy Fitness. High levels of clarity give leaders and teams room to make decisions quickly and creatively.  In addition, these OKRs describe the impact on clients; such client-centricity enabled them to create meaningful products and services that helped clients meet their goals (even in a crisis).

The OKRs also increased the motivation of Franchisees and local teams by allowing them to customize products and services to meet their local clientele needs. The aspirational and transparent nature of OKRs drove accountability and greater collaboration.

To grow and sustain, Objective Fitness wants to be a profitable business and a well-respected brand. Objectives and measurable key results around profitability allowed Objective Fitness teams to know exactly what they were aiming for, why it mattered, and which initiatives they should prioritize to accelerate business outcomes (rather than just outputs).

When teams are motivated to execute against OKRs, this can open the door to limitless potential. Well written OKRs are awesome in unlocking your team’s hidden superpowers!  By setting ambitious stretch goals, you can unlock your potential and accelerate achievement of results.  

Principles to guide your OKRs

No matter the industry or scope, we have found that these six principles are critical to consider when using OKRs in your organization: 

  1. Mutually agreed upon: OKRs are agreed and not issued. It may appear that they are imposed from top-down, but it is important for them to be bought into by each layer
  2. NOT for measuring individual performance: Objectives should be ambitious and used as stretch goals; they should seem daunting. If we were being assessed against them, we would be inclined to be more conservative
  3. Transparent: Everyone should be able to see what everyone else in the organization is working on. Nothing is hidden or sugar-coated
  4. Less is more: The speed of growth is encouraged when we limit the number of objectives– this promotes focus. Teams should work toward a maximum of five objectives at a time, with 4-5 key results
  5. Pragmatic: Typically, we can expect to achieve around 60-70% of key results. Any more means we’re not stretching enough, any less means we’re not achieving enough. Remember, even if you are “only” 60% to 70% successful, you will still have made substantial advancements in a very short time!
  6. Quantitative: Having clarity in an organization is like watching a “high-definition mental movie”. It improves decision making and empowers teams to determine “how” to achieve the results. Key Results should be quantified; there should be no subjectivity involved in assessing whether they have been achieved

CONCLUSION

What does this mean for you and your organization?

Just as Objective Fitness was able to swiftly and creatively pivot while still delivering on their ambitions, your organization can do the same by adopting the OKR model and key principles to drive business agility. We love this quote from John Doerr, the popularizer of OKRs:

“If the heart doesn’t find a perfect rhyme with the head, then your passion means nothing. The OKR framework cultivates the madness, the chemistry contained inside. It gives us an environment for risk, for trust, where falling is not a fireable offense- you know, a safe place to be yourself. And when you have that sort of structure and environment, and the right people, magic is around the corner.”
John Doerr, Measure What Matters

What next?

We would love to hear from you—please comment/reach out to share some of your thoughts. How have you/your businesses shifted during this crisis?  How might OKRs help you drive Clarity, Motivation, and Accelerated Successful Outcomes?  How can we help?  We encourage you to comment below or reach out to growth@adaptovate.com.

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