Do non-profit organizations need OKR?

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[fs-toc-h2]Show notes

The answer is: yes! Just like any organization, non-profit organizations have strategies that need to be delivered. And, OKR is the perfect tool to communicate and execute those strategies. Curious to learn how NPOs roll OKR out and work with the framework?

We spoke to Nathan Friedman, co-President and CMO at Understood (120+ ppl) — a non-profit organization dedicated to helping those who learn and think differently thrive — about their experience working with the OKR framework. Nathan shares why OKR (and KPIs) are key to their organization’s success, the approach they took to successfully rolling OKR out to the entire organization, and the benefits they’ve seen ever since they implemented the framework. He also shares what other NPOs should be focusing on when working with OKR.

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Curious to learn how other organizations rolled OKR across their organization? Give these episodes a listen:

• OKR rollout: an untraditional approach to success
• OKR rollout: what every organization should know

[fs-toc-h2]Transcript

Henrik-Jan: Hello everyone. And welcome to another episode of Goal Diggers. I'm Henrik, founder, and CEO of Perdoo, an OKR software that's focused on strategy execution. I am the host of today's episode and joining me today is Nathan Friedman from Understood. Nathan, could you tell us a bit about yourself and also about Understood.

Nathan: Sure thing. First, thank you for having me join today. Excited to be here. Um, Understood is a not-for-profit focused on the one in five people who have learning and thinking differences. Learning and thinking differences are learning disabilities and, things like dyslexia or ADHD. And, it is very common, more common than people know.

And our focus is not only helping those people but providing them with community, support, and resources to live a thriving, fulfilling life.

Henrik-Jan: So you say one in five people have those disabilities, 20% of the population?

Nathan: Correct. So in America, we did some studies and about 20%, which is about 70 million people have learning and thinking differences, which is astronomically high.

And it's one of the things that really touches everybody, regardless of race, ethnicity, income. It is a uniformity across the US and across the world.

Henrik-Jan:  Okay. And the reason I reached out to you and invited you to this podcast is that you guys at some point decided to implement OKR is in your organization.

Could you tell us a bit about why you decided to adopt OKRs at Understood, and how you were introduced to the framework?

Nathan: So about two and a half, three years ago, we started looking at our organization and really trying to decide how we could deliver impact at scale. Our mission and vision really shifted about three years ago, as we went through a rethinking of how we could deliver and engage different audiences.

And so we became more of a lifelong guide for those who'd learn and think differently. And our mission of shaping the world for different. So everyone can thrive became central and focusing on the individual that has a learning and thinking difference and those influencers around them and how we could deliver impact was a hot topic among the sort of leadership team.

And so we began looking for really meaningful ways to really focus our efforts, understanding how we could track progress, and how we get articulate to our teams, the importance of that. We had a ton of metrics and a ton of different Objectives. How did we know what was most important? How could we really focus on what really mattered.

And what really began the journey was a book by John Doerr, Measure What Matters, and a subsequent Ted talk and a conversation in our leadership team. And it became apparent to us that we needed a framework that really helped us articulate what we were doing and how we could do it.

And that began our journey. It was not always a linear journey as you know, you have to start somewhere and if you don't start somewhere, you never get anywhere, but we needed to begin to implement a framework that really focused our efforts.

Henrik-Jan: And could you tell us a bit how you decided, I mean, you said that implementing OKR is not a linear process and that there's plenty of obstacles to overcome.

How did you decide to implement or to roll out OKRs at Understood?

Nathan: Sure. So as we begin to shift our mission and refocus our strategy, it was critically important for us to onboard new people, as well as our existing team members around what we were doing and how we were doing it. Everyone needed a common goal that we were working toward and we understood, we were on a journey to deliver against our mission.

And we were on a journey to implement the OKRs, but it really boiled down to number one, making sure everybody was on the same page. Number two, really focusing on the higher value work that would deliver impact. And number three, how did we prioritize the work we were doing? Right. What metrics are really important, what work would really deliver on those metrics and, and looking to see what may be things we needed to stop, because it really wasn't impactful in the way we thought it was.

Henrik-Jan: Yeah. And did you involve the entire organization early on or did you do like a gradual rollout starting with the leadership team first? How did you approach those things?

Nathan: So we rolled it out to the entire org. I think it started with the leadership team. Everyone in the organization got the book by John Doerr and everyone also got the Ted talk and we held an offsite — on an all day off-site just to train people on what OKRs are, what the difference between a good and a bad O (Objective), what is a KR (Key Result).

You know, and I think it was a longer process and we wanted to start somewhere. So we knew the first time we did it, it wasn't going to be perfect. And it probably wasn't going to be excellent. But I think we wanted to start somewhere and then improve quarter of a quarter, the sharpness of the Objectives, the measurability of the KRs.

And then we subsequently rolled out Initiatives. And then after that KPIs, which really helped us bifurcate, what are the key things that really are going to keep our business going on a day-to-day basis and we need to ensure work, which are the KPIs. And how is that different from the Key Results, which were, how are we measuring the impact and how is that laddering up to the overall organizational Objectives?

Henrik-Jan: It sounds like a very healthy.. sounds like you had very realistic expectations going into this, like we're also speaking to other organizations that they implement OKR. And within the first quarter they expect magical returns on those investments. Which of course aren't.. Aren't happening.

Nathan: No, very much so and I think the one thing to also understand is that everybody's different familiarity with OKRs. Sometimes people will work with it in their own organization or a previous organization. And you need a norm around what it means for your organization.

Henrik-Jan: That's, that's a very good point. Could you tell us a bit what were like the biggest challenges that you've, that you've faced?

And do you think these challenges are unique because you're a nonprofit, or do you think these are generic challenges that you think many organizations would have.

Nathan: So, Understood feels and operates very much like a traditional company. And we've purposefully done that because we want to, not get sidetracked or away from our mission and really be implicit and explicit in what we do and don't do.

I think that the ability that we have to roll this out helped in a couple of different ways. And the challenges we face, I don't think are abnormal to any company rolling it out. I think number one was getting everybody aligned to what OKRs are, and using the same terminology, vernacular.

So when we could have conversations, people knew what we were talking about and I think some of the other challenges were really around what matters. And bifurcating what matters versus what people prefer to do. And that can be a hard concept or process, because a lot of times, particularly in not-for-profit, but that you have to separate what is actually delivering impact and what is a personal favorite project and what is something that is, that needs to be, let go of.

Any company has that. And you can see that with any for-profit companies like Coca Cola is going through it now by shutting down some favorite brands. Other organizations are taking a hard look at what they do so they can really deliver impact.

Henrik-Jan: Yeah. What did you use by the way to develop that common language and that common understanding in the organization?

You mentioned you went on an offsite, which I think is interesting, this thing, of course, to get everyone on the same page. Are there other things that you do, like, do you have a, something like a glossary that people can refer to for these terms?

Nathan: We do. And I think it starts with a common understanding of the leadership team and in a unified leadership team that can articulate what we're trying to do and how we're trying to do it.

I think working pre-COVID is different than during COVID. So our offsites were obviously pre COVID. But I think when we rolled those out, it was really giving the team an understanding of what we were trying to do, why we're trying to do it. Create a glossary of terms then made available through our intranet, using a software system like Perdoo to help really share the information both horizontally and have the reporting vertically so people can understand where things are at in a given time.

And, and I think the recaps that we do both mid-quarter and a quarter really helped because it brings people along on the journey. So not as it just the leadership team or the level below the leadership team. But how do we articulate it to the overall company? So people can see themselves in the work that we're doing. See themselves in not only the KRs, Objectives, Initiatives but the KPIs as well, because that creates a sense of collaboration.

And that creates a sense of unity. When everybody can see their work as written down as something that's important for the organization.

Henrik-Jan: And what's been the response like from all your people?

Nathan: It's been overwhelmingly positive. I think that there's the software and Perdoo and the coaching we've received has helped us tremendously throughout that process.

I think it's a continual journey. Right. And I think, you know, how do we make sure that we're continuously measuring the right things. I think the pandemic gave us an opportunity to rethink our objectives. As many businesses had to rethink what they do and how they do it. So I think that was an opportunity for us to pause, not to say pause with work, but pause in our thinking and say, okay, are these really now the right objectives given what's happening in the external environment?

And really being externally focused versus internally focused was also helpful.

Henrik-Jan: Yeah. Yeah, and I mean, you've mentioned many, many benefits already. Were there certain benefits from this whole initiative that you had going on that you didn't expect? Or were there any surprises for you?

Nathan: I think the surprise for me was how challenging it is at first, but the benefit far outweighs that challenge and it could be daunting.

But what we decided to do was to break that up into digestible pieces, not to make sure that we were being perfect after the first quarter, giving ourselves the room for improvement quarter over quarter, helped bring everybody along. We tell this funny story, the first time we did OKR is we had 19 objectives.

And that is just crazy. If you think about it. And as we went on, we now have five objectives and defined initiatives that ladder up to that. And impactful metrics that we can derive and monitor on a regular basis. So it really helped us to narrow our focus. Allow people to make their own decisions on our teams as to whether what they're working on is impactful or not.

And therefore now allowed us to prioritize initiatives and let go of things that while we may have liked that we're not really delivering the impact that we're looking for.

Henrik-Jan: Yeah. Cool. And were there any benefits that you're expecting from this that haven't materialized?

Nathan: I think there aren't necessarily benefits that haven't materialized.

I'm excited to continue the journey. Yeah, I think we can always get better and refine what we do. I think as we ourselves do external validation of our hypothesis and testing and qualitative research, how do we make sure that qualitative behavior change and attitude change gets incorporated into our OKRs.

I know we're working through different integrations of our own software into our OKR platforms. So how do we make sure we're measuring twice and cutting once, so to speak. How do we make sure that the proxy metrics ladder up to the real-world metrics that we're looking to deliver. And how do we make sure that OKRs continue to support us as we evolve along our journey.

Henrik-Jan:  Cool, I think one of the main takeaways I have from this conversation is how important it appears to be, to be realistic with your expectations. And I, I see so many organizations have these unrealistic expectations and then they face a wall and then their resistance start brewing in the organization.

So I think it's really cool that you guys took this approach. Is there any other advice that you could share specifically for nonprofit organizations that are looking to get started with OKRs or maybe for organizations in general?

Nathan: Sure. I think it was something that we haven't done and purposefully haven't done is, driven OKRs down to the individual level.

We started by and we'd learned that doing it by a team level, didn't quite deliver the integration and collaboration we were looking for. So we have a singular set of OKRs for the organization versus OKRs for each function. And that was something we had to learn. We originally started doing it by function and found that didn't work. For organizations that are focused on not-for-profit or impact, you know, we'd recommend.

The same thing that you would for a regular company. What are you actually trying to do? Start with that core? What is your mission? So you don't stray from that. And then what are those proxy metrics? If it's a digital product or what are the ancillary metrics that ladder up to the impact you're looking to deliver. Really focus on those and then link those to your objectives.

And I think starting from that top-down approach will help clarify not only what you do, how you do it and streamline communication and collaboration and enable collaboration.

Henrik-Jan: Cool. Nathan, thank you so much for joining us on this episode today. I think it was really helpful. And, yeah, again, thanks for sharing your advice and sharing your experiences with us today.

Nathan: And feel free to visit us at u.org. If you'd like more, more help or any information on learning disabilities.