How Flaconi achieves its goals with OKR

[Disclaimer: This is a translated version of a case study published by Internet World. The original article can be found here: Wie Flaconi mit OKR seine Unternehmensziele erreicht]

Ever since Google found success with "Objectives and Key Results," companies all over the world have been trying to adapt their management practices accordingly. Flaconi is one of them — aiming to lead Europe's online beauty sector.

When Martin Nguyen, Director of Strategy, Data and Analytics at Flaconi, reflected on introducing the OKR methodology, he said, "It's a long way to go." There’s room for improvement, but after a long process, Flaconi is now at a stage where OKR has been successfully implemented throughout the organization.

In theory, OKR is simple, but implementing it requires commitment and dedication. Indeed, at Flaconi, the path to being an OKR-managed company wasn’t straightforward.  The journey began at the end of 2017 with, as is the case for many organizations, an Excel sheet playing a big role. All teams added their Objectives and Key Results to the Sheet, and management then went through the mammoth file, cell by cell in its management meetings.

"The method was very opaque and it was difficult to remember the OKRs," Nguyen recalls. "At the end of the day, we neither had alignment nor transparency. And to be honest, we also had no certainty as to whether the goals were being met."

Kathrin Nusser, the new CFO, took responsibility for the OKR program soon after, and brought it to a whole new level. Upon searching for a suitable OKR tool, she found Perdoo. She committed to the OKR methodology and the tool, with the aim of embedding it in the structural DNA of Flaconi’s Business Development.

Nguyen eventually took over the OKR program and sped up the implementation process. “I said, ‘I come from consulting, I can do this,’” he laughs. The management believed in him, and after the initial implementation phase, the company hired a dedicated person to look after the program as an OKR Ambassador. This person isn’t only a data specialist, but first and foremost a communicator — 80% of their day-to-day work focuses on communication.

The OKR Ambassador’s role is to provide all departments with context on the corporate strategy. They explain how Flaconi differentiates itself from the competition, where it currently stands on the Strategy Map, what needs to be done in the near future, and why certain decisions are made. In addition, they help employees and teams who don’t have visible priorities on the Strategy Map to formulate how they can still contribute to achieve strategic goals. And finally, they coach employees on how to formulate meaningful Objectives and Key Results.

In terms of a software tool, Nguyen stuck with Perdoo. What he likes most about Perdoo is its good usability. “They’re constantly developing the tool further," he praises.

Previously, it wasn’t easy for teams to enter and keep track of clean, simple OKRs. There wasn’t a tool that provided a great overview of what’s on target and what’s not, and which helped in quickly working out what action to take.

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From Mission to Key Result

But how exactly does OKR work at Flaconi? At the top-most level of the OKR model is Flaconi’s mission: "We empower everybody to rethink beauty." Every employee is expected to work towards this high-level goal.

The vision is to become the number one online beauty retailer in Europe. The strategy then supports this.

At the Key Result level, Flaconi sets almost exclusively quantitative targets, which are backed up with relevant business impacts. Employees then formulate initiatives, clear actions that will be taken to achieve these Key Results.

The Company OKRs are set centrally. In several sessions, the management and senior management team define the five most important Objectives and the associated Key Results. They present these to the OKR coaches, and then with the respective teams.

"Each team decides whether they can meet the set results autonomously or in collaboration with other teams," explains Nguyen. Team Owners are then responsible for ensuring that the right teams are brought together to achieve the desired Results.

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Silicon Valley’s “Moonshot Goals” don’t work in Germany

According to Nguyen, in order that these goals are accepted across the team, it’s important to not settle for 70% completion.. Unlike in Silicon Valley, teams in German companies are keen on actually reaching 100% achievement for the goals they’ve set.

Companies should also refrain from setting too many Objectives.

According to Nguyen, Flaconi’s employees are not afraid of being measured. “This was not an issue at Flaconi," he says. They have an ideal culture to succeed with OKRs, and above all, it’s one of embracing failure, and learning fast. "We have constructive conversations if goals haven’t been achieved and discuss why that is and what could be done better next time."

Going forward, Nguyen has three goals with OKR:

1. OKRs of all teams should contribute 100 percent to Flaconi's strategic direction.
2. Everyone in the company should write OKRs and proactively follow up on them on a bi-weekly basis, to take over the company’s project management side of things as well.
3. To find an answer to the question of what OKRs actually look like for operational areas like Customer Service.

"What is a perfect OKR for more operational teams, that also supports the strategy and not just minimally improves daily business?" he says. The fact that even large companies don't have a solution is no reason for Nguyen to give up. "We are pursuing the approach of being able to develop suitable OKRs in the future for departments that are highly operational," he says.

His most important piece of advice on the subject of OKR reflects this approach: "You have to have a certain resilience in the face of setbacks, and just keep going."