The growth handbook for CEOs

Growth is not something that magically happens. It’s the result of carefully designed strategies that are being successfully implemented and executed.

As the CEO, you’re not just responsible for setting the strategy, you’re also accountable for the successful implementation and execution of it. After all, a well-designed strategy has little value if it isn’t delivered on time. The reality is that 9 out of 10 organizations fail to realize their strategies. In 70% of these failed cases, the problem isn’t bad strategy, it’s bad execution. As it turns out, delivering strategy and realizing growth is complex.

Perdoo makes it simple. This guide contains everything you need to know to accelerate your growth and deliver the results that matter, starting today.

At Perdoo, we’ve developed a simple, 3-step process that any organization — big and small — can follow to accelerate their growth. The details of each step are explained in the following chapters.

1. Set your strategy

There are many definitions of strategy, but they all boil down to this: strategy is a set of choices that explain how your organization is different. These choices reinforce one another, and should communicate where you play (the markets and segments you’ll target), and how you plan to win in that market, against the competition.

Aligning on and communicating these choices is what you need to successfully identify what matters most to realize this strategy.

2. Identify what matters

Once your strategy is set, you need to figure out which results matter for the successful implementation and execution of that strategy. What matters needs to be written down as KPIs & OKRs.

KPIs (Key Performance Indicators) and OKRs (Objectives & Key Results) are the two types of goals that you need to deliver your strategy and drive sustainable growth.

3. Achieve your goals

Once you’ve successfully identified what matters, your people need to start working toward those goals.

Achieving goals is the hardest part, which is why you first want to make sure that you’ve identified the right goals to work on (step 2). To know that you’re working on the right goals, you need to have a clear strategy in place (step 1).

Unless you’re a one-person company, you’re not going to implement and execute the strategy (all by) yourself. You need resources to do so: capital and people. If you want your people to work towards your strategy, you need to share that strategy with them and make sure they understand it. Therefore, your strategy needs to be clear and measurable, as well as easily accessible.

According to research by WillisTowersWatson, 90% of general employees and 40% of managers do not know or understand their organization’s strategy. Fix this, and you’ll be miles ahead of your competition.

Once your strategy is set, you enable everyone across the organization to identify what matters most at any point in time.

What is strategy?

Strategy is a military term and comes from the Greek words “stratos” (army or resources) and “ago” (leading). In a military context, strategy thus means to lead your resources to win the battle. A proper business definition would be: to lead your resources to obtain your organization’s goal.

Strategy matters because each organization has finite resources and faces competition. Were resources infinite, you wouldn’t need a strategy — your company could simply do everything it wanted to. And without competitors, there wouldn’t be a need to differentiate yourself. But with limited resources and the constant threat of competition, strategy becomes critical and (tough) choices will have to be made.

But before those choices can be made, you first need to decide which battle(s) you want to fight and what winning looks like.

The Ultimate Goal: define your playing field 

Your Ultimate Goal defines the ultimate winning aspirations for your business. Which battles will you fight, and which will you leave alone? When will you consider the battle won?

A good Ultimate Goal answers 3 questions:

• What’s the purpose of your organization?

This is also called your organization’s mission. It explains why your organization was created in the first place, which problem it is solving.

• For whom is your organization fulfilling that purpose?

The problem your organization is solving potentially applies to many people and/or organizations. You can’t serve them all. Pick the (customer) segments that are most important to you.

• When will you consider your venture a success?

This is often called your organization’s vision. It says a lot about what you want your organization to become, and explains when you will have won “the battle”.

Examples

Here are a few examples from our clients:

• Help SaaS businesses know their customers. Be market-leader in Behavioural Analytics.
• Be the leading construction company in Canada by building infrastructure that people depend on.

Strategic Pillars: deciding how to win

Now that we know where we’re playing and what winning looks like, it’s time to figure out how to win. Our how-to-win choices explain how we (aim to) differentiate ourselves in the market; why customers choose us over the competition.

These choices are directly connected to your Ultimate Goal: they explain how to win on the chosen playing field. Change your Ultimate Goal, and you’ll have to revisit how to win on that new playing field. Your Ultimate Goal and Strategic Pillars are, therefore, jointly called your “strategy”.

Your how-to-win choices will be the pillars that will support your Ultimate Goal. You should aim to have 3 to 5 Strategic Pillars.

Examples

Remember the Canadian construction company? Their Ultimate Goal was to be the leading construction company in Canada by building infrastructure that people depend on. These are a some of their Strategic Pillars:

• Be committed to H&S and sustainability in all aspects of our work.
• Put D&I at the heart of our high-performing workforce.
• Be a company that clients love to work with.

The Ultimate Goal of the behavioral analytics company we mentioned was to help SaaS organizations know their customers, and be market-leader in behavioral analytics.

Their Strategic Pillars include:

• Deliver the fastest analysis for every user.
• Be self-serve at every stage of the journey.
• Build a culture where each employee learns and thrives.

Keep it simple

To both your Ultimate Goal and your Strategic Pillars applies: keep it simple.

While it can be really hard to find the right answers for your business (large enterprises pay strategy consultants like McKinsey millions in fees to help them find those answers), the questions themselves are simple and require simple answers.

You’re not going to realize your organization’s Ultimate Goal all by yourself, and you’ll need the entire organization to realize your strategy. It’s therefore critical that everyone — yes, everyone — in your organization is able to understand it and recite it. Only then can they make sure that whatever they are working on every day, is helping your company move in the right direction.

What’s next?

Your strategy (ie, your Ultimate Goal and Strategic Pillars) will serve as the foundation that will inspire all the KPIs and OKRs that your organization will be working on. That’s why it’s so important to track your strategy and goals in the same place: it enables everyone to see the bigger picture and whether what they’re doing is aligned with it. With Perdoo, we make it simple for you to do exactly that.

The Perdoo Roadmap presents your strategy in a simple, intuitive way — empowering you to communicate your strategy in a way that everyone understands, enabling your teams to align their goals, and allowing you to see how your strategy turns into results.

With a clear strategy in place that is easily accessible, you enable everyone—at every level—to successfully identify what matters most to deliver that strategy.

Once everyone has identified what will matter most for the upcoming period, they can start working toward achieving those goals. And you can rest assured that they’re working on the right ones.

What matters?

When it comes to the implementation and execution of strategy, achieving results (e.g. closing a new customer) matters more than the completion of tasks (e.g. calling a prospect). In other words: for strategy delivery it’s outcomes over outputs.

Figuring out what matters is not always easy, simply because most people are—by nature—quite output-oriented. To successfully identify what matters, keep in mind that what matters is almost never a means to an end.

Let’s say you want to learn Italian. Most people will start thinking about all the things they should do: listen to an Italian podcast every day, watch their favorite Netflix series in Italian, and complete Duolingo’s Italian course. However, all these things are a means to an end (i.e. something that is not valued or important in itself but is useful in achieving an aim).

What if you completed these tasks but you still cannot order a pizza in Italian, would you consider yourself successful? Probably not. What really matters to you is almost never a means to an end—it’s the end itself.

Measuring what matters

KPIs and OKRs are both designed to measure outcomes. They are two different types of goals, each with their own purpose.

The purpose of KPIs

KPI stands for Key Performance Indicator. It lets you know how a key area of your business is performing. Such a key area of your business is also called your business as usual.

Hence, a KPI defines what your (critical) business as usual is, and enables you to easily monitor if it’s performing well. (It’s important to not confuse KPIs with metrics or Key Results.)

The purpose of OKRs

OKR stands for Objectives & Key Results. OKRs complement your strategy, enabling you to build a roadmap toward your Ultimate Goal and provide you with the ability to execute your strategy.

There are two types of OKRs, each with their own purpose:

• Company OKRs provide direction as to where you want the company to be by the end of a specific timeframe (we’d recommend a year). Company OKRs help to identify the key themes for the organization in that given timeframe. In Perdoo, you’ll find these on Roadmap, below your Strategic Pillars.

• Group OKRs are short term and actionable. They’re the OKRs that everyone in your organization will be actively working on, perhaps each quarter. They help everyone build, improve or innovate important parts of the business in order to support those Company OKRs and deliver the strategy.

Why you need both KPIs & OKRs

Let’s imagine your organization is a car, and you’re driving that car towards a certain destination (your organization’s ultimate goal). Your OKRs are mapping out your path toward that point (hence the name Roadmap in Perdoo). But as you’re driving towards your destination, you also need to keep an eye on your car’s dashboard to make sure that you don’t run out of gas and that the engine doesn’t overheat. It doesn’t matter where you are on your journey, these are the things that you’ll always need to keep an eye on. The things that you constantly need to watch are best measured by KPIs: simple indicators that instantly tell you if something is going well or not.

If you focused just on KPIs, you wouldn’t get to your destination. Alternatively, if you focus just on OKRs, you’ll run out of gas and also won’t get to where you want to be.

Setting KPIs

Setting KPIs is relatively simple. First of all, they’ve been around for ages so certain standards have been developed. Second, they don’t change very often, so you’ll only have to set them once (though you may want to revisit them every now and then to ensure you’re still focusing on the right KPIs—especially when your organization is growing).

When setting up KPIs, keep in mind that those KPIs not only measure how key areas of your business are performing, they also define what the key areas of your business are.

Framework for setting KPIs

Think about a specific area of the business (i.e. company, strategic pillar, department or team) and answer the questions below. See Appendix A for more details on each question.

1. What is a key priority of this group/pillar?
   e.g. lead acquisition
2. What is the best metric to measure performance of this key area?
   e.g. MQLs acquired
3. How do we calculate the current value?
   e.g. The amount of leads that achieved MQL-status or higher this quarter
4. What is the target or threshold value?
   e.g. 500 MQLs

In Perdoo, you can store the answer to each question on the KPI itself. Then everyone in your organization or team, including future hires, has a solid understanding of each KPI. We’d recommend starting with the KPIs that you’ll use to measure success on your Strategic Pillars.

Setting OKRs

With your strategy and KPIs in place, you have all the context you need to create good OKRs — for the company or for a particular group, like Marketing or Product.

Company OKRs

Company OKRs communicate core themes or problems you’re trying to solve as a company this year. Additionally, they provide direction as to where you want the company to be at by the end of a specific timeframe (top-bottom), letting teams decide how they’ll make that happen (bottom-up).

Coming up with good Company OKRs can be difficult which is why it’s important to always keep your strategy (Ultimate Goal and Strategic Pillars) in mind to remain focused on what matters most: delivering the strategy.

When creating Company OKRs ask yourself, “is this something that most of the company can contribute to, or is this specific for a single team?” If the answer is “a single team”, then this means that this OKR belongs to that team, and not the company.

A common mistake is thinking that Key Results in Company OKRs should be a breakdown of the metrics each one of your departments should hit. Company Key Results should be high-level metrics and not specific to a single department. Use metrics that almost everyone can impact, not just a few.

Can’t decide on a Key Result for a long-term company Objective? That’s fine – leave them out. You can choose to judge success on this Objective using its aligned, quarterly group Objectives. If you’re using Perdoo’s Roadmap feature, you can see both the progress of Key Results and the progress of Aligned OKRs on each Objective – giving you full flexibility on how you measure success.

Group OKRs

Company OKRs guide the general direction that teams should take to actualize and execute the core themes the company is trying to solve. Group OKRs are then all the OKRs that your people will actually work on. Together with KPIs, they drive the implementation of your strategy.

You can use Group OKRs to build, improve or innovate an area of your business, either to fix a KPI or to help bring the business to the next level by supporting a company OKR.

Group OKRs are unique to each company. So you should really figure out for yourselves what the right Group OKRs are to work on. Second, Group OKRs have a relatively short time span (we’d recommend quarterly), so they frequently change. Several times a year, you’ll have to go through the process of defining what OKRs you should work on next. Let’s dive into that a little more.

When setting Group OKRs, team leads can use the following framework to create good Group OKRs fort their team. The easiest place to add Group OKR is the Perdoo Roadmap, as the roadmap gives you all the required strategic context. Creating Group OKRs can be difficult. See Appendix B for a few examples. To help your team leads create good Group OKRs, let them read this article.

Timespan of OKRs

OKRs typically work with a combination of cadences that interact with each other to create a rhythm of continuous and focused progress. You have a high-level goal with a longer horizon, that can only be accomplished by working toward smaller goals with a shorter horizon.

The standard combination in the OKR framework is annual and quarterly. Typically, Company OKRs are set annually, providing a realistic timeframe to actualize the core themes the company wants to achieve by the end of the year. Group OKRs are usually set quarterly. A quarter gives everyone enough time to make a real impact in a certain area, while keeping the organization agile enough to rapidly respond to changing circumstances.

Who should set them?

Company OKRs are typically set by executives, setting the tone for the entire organization and pushing it beyond the status quo.

It’s important, nevertheless, to crowdsource the knowledge of your people — they’re the ones that have unique insights into what’s going on, either within the business or in the market. Use this knowledge!

Setting Group OKRs is the responsibility of team leads. They know exactly what’s going on in their teams and what their priorities should be.

Nonetheless, the executives should review and approve the OKRs of the teams that report to them. This is to ensure that everyone is on the same page.

As the CEO, you should also review all the Group OKRs, at least for your top-level groups. You want to be sure the Group OKRs are aligned with those core themes for the organization represented in your Company OKRs.

To learn more about writing great OKRs, download the eBook: How to write great OKRs.

Goal-setting best practices

Put KPIs over OKRs

Remember the analogy? KPIs keep the engine running so that you can continue your journey towards your destination. Without a running engine, you’ll never get to where you want to be. Make sure the engine is always running and put KPIs first.

Estimate how much time there is to work on Group OKRs

For some teams, maintaining KPIs will require a significant amount of time. A Support or Sales team are teams that typically have a lot of KPI-related work: closing deals / resolving incoming support tickets. Every now and then, it can happen that they don’t have time to work on any Group OKRs—and that’s ok.

When setting Group OKRs, it’s important to estimate how much time everyone will have to work on them. Our Sales team at Perdoo estimates that they spend 70% of their time working on their KPIs. That means that they only have 30% of their time available to work on other things such as OKRs. The question then is how they are going to spend that time, and that’s what their (Group) OKRs should define.

Less is more

As with many things in life, less is more. The less goals you have, the more focused you are. With (too) many goals you’re avoiding the hard question: which has priority?

KPIs especially are often misused by organizations, where some have hundreds of KPIs in place. When that happens, you’re not looking at KPIs anymore—you’re looking at PIs (Performance indicators). In Perdoo, we recommend a maximum of 6 KPIs for the company and each Group. This encourages you to focus on these few performance indicators that are really key.

Take your time setting goals

Your goals will define how everyone in your organization will be spending their time. Hence, setting goals is pretty much the same as deciding how to invest a significant amount of money. You don’t want to rush this.

Make sure you organization structure supports your goals

Every now and then, you may want to review how your organization is structured to ensure your structure supports the completion of your most important goals (remember: structure follows strategy). This article explains the most popular organizational structures and how you can figure out the right structure for your organization.

You’ve put your strategy in place, made it clear and measurable, and shared it with the organization. That enabled everyone at every level in your organization to identify what goals they should be working on to help deliver that strategy. Never before did your organization have such a good understanding of your strategy, and never before did everyone have it so clear what they should be working on. As the CEO, you have reviewed and approved these goals—so on top of that your organization is now also perfectly aligned. There’s only one thing left to do: achieve your goals.

Achieving goals is the hardest part and will take, by far, the most time. Hence, you first want to make sure that you’re working on the right goals, as we’ve done!

To ensure that the goals that you and your team(s) have identified in step 2 will be achieved, you need to do two things: (i) make someone responsible, and (ii) keep that person accountable.

Make someone responsible

When you have identified an important goal for your organization, you need someone to look after it. In other words: you need to make someone responsible.

As the CEO (or manager), you should not be responsible for all the goals of your company (or team). You simply don’t have the time. Instead, you should delegate responsibility and act as a coach (i.e. help your direct reports achieve their goals).

In Perdoo, we call the person who is responsible for a goal the “lead.” Only one person can lead a goal (the saying goes: “If multiple people are responsible, no one is”).

Responsibility should equal ownership

It’s important that the responsible person also has ownership over the goal. Ownership is your ability to influence the outcome. First of all, it’s frustrating to be responsible for something when every decision or effort that could positively influence the outcome of that goal has to be approved by someone else. Second, if responsibility doesn’t match ownership, you simply reduce the chances that the goal will be achieved.

Obviously, the responsible person must work towards the goal while staying aligned with the company’s strategy and values. And some decisions or efforts will have to be approved (e.g. when a certain budget is required). But give as much ownership of the goal as possible to the person who you’ve made responsible for it.

Keep people accountable

You can’t just tell people they’re responsible, and then leave them to it. Yes, it may work for some, but not for all. You need to keep them accountable. Accountability means that you judge the person responsible for how well they executed on a goal.

Who keeps who accountable?

Keeping people accountable should run along the reporting lines. Everyone who has people reporting to them (e.g. executives, managers) keeps their direct reports accountable.

How do you keep a lead accountable?

You keep a lead accountable by asking them to regularly update progress (eg, weekly), and by asking managers to review their direct reports’ progress in their 1:1s. If you’re using Perdoo, you’ll find Check-ins and customizable reminders extremely useful for this.

Regularly update progress

There are many reasons why the lead should regularly update progress. The most important one is by Benjamin Harkin (Ph.D. of the University of Sheffield; he conducted a meta-analysis of 138 studies comprising a total of 19,951 participants). He found that prompting participants to monitor their progress increased the likelihood that the participants would achieve that goal. The more frequent the monitoring, the more likely they were to succeed. Harkin: “Monitoring goal progress is a crucial process that comes into play between setting and attaining a goal.” We found this to be true in our own data analysis too.

Regularly updating progress also keeps other stakeholders, such as yourself, in the loop. The goal is important, so you want to be able to see how it’s progressing.

Sometimes a progress update requires more context, which is why you can add a note to a progress update in Perdoo. For example, when a KPI turns unhealthy, you want the lead to research the issue and explain why it turned unhealthy. Ideally, he or she also has some ideas for how to get it on track again, and for when this should be a priority. These answers you want to have logged on the KPI in Perdoo so you keep everyone informed and have a good historical record.

When updating a goal, the lead should answer the following questions:

• Why is the goal off track (if it is)?
• What is your plan to get it on track again?
• How can the organization help? (In Perdoo, the lead can @-mention colleagues who he or she needs help from. The colleague will then automatically be notified.)

Review progress in 1:1s

Most managers and executives already have regular 1:1s (i.e. weekly or bi-weekly) with their direct reports. They just have to make a review of goals part of these 1:1s.

This serves three purposes:

• It lets their direct reports know that they are being held accountable for the goals they lead.
• It gives the manager the opportunity to provide support (if needed).
• It offers the manager the opportunity to give praise and encouragement to motivate people to go even further when things are going well.

With Perdoo, we make it super simple to review the goals of your direct reports in a 1:1. First of all, your direct reports are automatically added to your Home view. On your Home view, you can see if they’ve checked-in that week, and click-through to their latest Check-in report. Pull up this Check-in report in your 1:1 to quickly review how things are going.

Growth is never permanent. Due to constantly changing circumstances, continuous growth requires constant work.

New competitors are entering, the needs of customers are changing, new technologies enable new solutions, and so on. As a result, you need to regularly refine your strategy and re-evaluate what matters most, before everyone starts working again on achieving their goals. I call this the Circle of Growth.

As you see, growth is an ongoing process. Here’s how that process could look like in more detail for your organization:

I call this your organization’s Goals program. Click here to design a Goals program for your organization.

Perdoo bridges the gap between your growth ambitions, your strategy, and all the work that’ll achieve it.

KPI boards in Perdoo offer a cross-functional view of the KPIs that make up your funnel and directly impact your revenue growth. Leaders and teams are now able to track targets vs actuals for these KPIs over time and know what’s being done to achieve them.

See in real-time whether or not you’re on track to meet your revenue and growth goals. You’ll finally understand how teams and individuals aim to realize future targets, by looking at the OKRs that support each KPI. Board members, external investors, and other key stakeholders also get clarity on how you plan to deliver on the promises you’ve made.

Create a free Perdoo account and set up your KPI boards today. Alternatively, view what KPI boards look like in our pre-populated demo account here. 

To set up a KPI, answer the questions below. Make sure to store the answer for each question on the KPI in Perdoo! You definitely want to be sure that everyone in your organization or a team, including future hires, understands each KPI.

Questions for setting KPIs

1. What is a key priority of this group/pillar?
   e.g. lead acquisition
2. What is the best metric to measure performance of this key priority?
   e.g. MQLs acquired
3. How do we calculate the current value?
   e.g. The amount of leads that achieved MQL-status or higher this quarter
4. What is the target or threshold value?
   e.g. 500 MQLs

Details of each question

1. What is a key area of our business or team?

We’ve seen above that KPIs and OKRs are the type of goals that you need to implement your strategy. Therefore, to decide what is a key area of your business, you need to look at your organization’s strategy. Delivering a great customer experience is clearly not part of Ryanair’s (a European low-cost carrier) strategy, so they probably don’t have a KPI for it 😄.

Some KPIs are personal to an organization. For example, a self-funded business like Perdoo may decide that cash flow is really important, whereas this may not at all be important for a well-funded scale-up like Uber.

Other key areas are fairly standard. For example, lead acquisition is important for pretty much any organization, same for revenue (growth), customer happiness, and so on. The Balanced Scorecard framework claims that every organization needs a KPI for the areas Financial, Customer, Internal processes, and Organizational Capacity.

2. What is the best metric to measure performance of this key area?

This is a bit trickier, as it depends on things like your business model and processes. Because your processes can change over time, how you measure performance of a certain area can also change (when we change KPIs at Perdoo, we usually don’t change what the key areas are but how we measure their performance).

Luckily, certain standards have developed (which you can easily research online). For example, most organizations use NPS to track customer satisfaction, and Employee NPS is quickly becoming the standard to measure how happy employees are. Standards have also developed within industries. For example, a B2B/SaaS company will use the metric MRR or ARR (Monthly/Annual Recurring Revenue) to measure revenue.

3. How do we calculate the current value?

Every metric will always have a certain value at any point in time. We call this the current value. You need to decide what the formula is to calculate the current value.

Let’s say CSAT (Customer Satisfaction score) is a KPI for your Customer Support team. The current value could be based on all responses from the past 12 months, or you could include only the responses from the past quarter. If you go for 12 months, you’ll probably have a more accurate number that is less influenced by a certain event (e.g. a painful bug). However, it will take longer for any trends to appear.

Even for a metric like Monthly Recurring Revenue—where it is clear that it only includes the recurring revenues that you have acquired in any given month—you still have to decide what revenues are classified as recurring. Sometimes that’s simple, other times it’s not.

Be aware that you want to avoid changing the formula. Changing it would either mean that all your historical data would change as well, or you won’t be able anymore to compare current performance with past performance.

4. What is the target or threshold value?

In my opinion, every KPI needs a target or threshold value. The target or threshold value enables everyone to see whether or not the KPI is “healthy”. If the KPI is unhealthy, appropriate action needs to be taken.

Check out our blog for more articles on KPIs.

Use the framework below to create Group OKRs together with your team.

Check out our blog for more. Read this article to ensure OKRs measure outcomes.

Creating Group OKRs is hard, so here are 2 real-life examples from Perdoo:

Sales:

When looking at the KPIs, Sales saw that they were doing just fine.

From previous experience, our Sales team knew that they would have around 30% of their time available to work on OKRs. So the question was how to spend that time.

When they looked at the Company OKRs for the year, they saw Perdoo wanted to increase their customer base in the ICP (Ideal Customer Profile) segment. The team decided to create an OKR to optimize their sales process for prospects that meet the ICP criteria.

Support:

Perdoo had seen a rapid growth in new customers, the number of tickets from users had increased significantly. Because the rapid growth hadn’t translated yet into expanding the Support Team, users had to wait longer to receive an answer. This caused our CSAT (Customer Satisfaction score) to drop from 98% to 89%, while we agreed it should be at 95% or higher.

Due to the increase in tickets, the Support Team had no time to work on OKRs.

The team didn’t feel they had the ability to drop some of their business as usual (e.g. answering incoming tickets), they knew they had a problem. A KPI was not healthy and the team had no time to work on an OKR that would improve it.

I sat together with the team to discuss how to solve this. We decided to only answer tickets at set times throughout the day. This would make some users wait even longer for their tickets to be answered, which would surely cause an even further drop in our CSAT score. This drop would be temporary, however, as this approach would free up some time to work on OKRs and improve their operations for the future.