Gary Schwartz: Hey, everybody. So welcome to episode two of the series, What Great Looks Like: OKRs versus KPIs. for those of you that joined us on the first episode, we talked a lot about sales velocity and how that focus leads us to how we measure business performance. How sales velocity drives strong go to market teams. The rise of technology to drive marketing operations, revenue, operations, and even project management has led to a plethora of metrics.

The ability to create and monitor dashboards at incredible levels of detail offers a way not only to micromanage, but also to focus on metrics that are not impactful. I’ve worked with CEOs who are concerned about how many Twitter followers we’ve had. With CMOs who are obsessed with website visits. Neither considered how those metrics impacted the results that they were expected to deliver, and neither considered that both of those metrics could show great results, yet be a reflection of attracting the wrong audience.

I learned a lot working for today’s guest Bharani Rajakumar, founder and CEO of Transfr. I’ll let Bharani describe in a second how amazing and disrupting his company is, but I also want to share some really good news that the team at Transfr got. Fast Company has recognized Transfr as one of the most innovative companies in the world in education.

One of the things that really stayed with me and that I find myself quoting from Bharani, in the work that I’ve done since I was with him, is the laser beam focus on the metrics that Bharani uses as the most impactful to the current and the future success of his business.

So Bharani is amazing.

01:52
Gary: It’s great to have you on today’s podcast. Thanks so much for joining me today.

Bharani Rajakumar: First of all, thanks for having me. Gary. It’s great to see you again. And you shared that one of your big takeaways from working at Transfr, was a focus on metrics.

But one of my big takeaways from working with you was your focus on storytelling. You were our first marketing leader that was hired at Transfr. And, to be honest, I had no idea what marketing was, how it worked. I mean, I still barely have any idea, but, it was wise words that you shared with us about the meaning of, and the impact of telling the story, and, you know, thanks for the sharing our kudos that the fast Company recognition. It sounds like our story is getting out there. And so we’re happy about that. So, what that story, about Transfr is, is rooted in, creating opportunity for those who may have been shut out by it. So our mission is to help everybody get on a pathway to upward mobility.

And that mission kind of originated from a personal experience that I had. My parents raised a family of four and $35,000 a year. and, you know, you kind of wake up every day just feeling not great, like the world was kind of speeding past you and you didn’t get to participate in it. So I got my first job when I was 16 years old in the fast food business.

And this was in the 90s when, you know, everybody said, hey, if you work in fast food, you’re on track to become, you know, to go nowhere. And I think what gets lost in that kind of narrative is that people don’t realize everybody has a different starting point in life. So I remember getting my first $5.25 an hour paycheck thinking, I’m king of the world.

Like, this is amazing. I get to go to the bank, I get to deposit this check. I get to make some decisions. Now, do I want Skittles, you know, do I want Starburst? I don’t know, I’ve got so many options. I’ve never had this many options before. So the purpose of Transfr is really to help everybody get on that pathway to upward mobility.

04:24
Gary: When we worked together at Transfr Bharani, we ran weekly, full company town halls tracking progress against our key goals. Could you describe for our viewers who aren’t familiar with the term, what OKRs are and why you chose to focus the business in this way?

Bharani: Sure. So, OKRs, the literal translation is objective key results. and they sound like KPIs, but they’re a little bit different in that, OKRs. I would venture to say, kind of have like a soul, you know, they can have a purpose versus KPIs. Could just be a number like profitability or I think you said in your opening, Gary,number of Twitter followers or something like that, right.

As a company or kind of true North Star is the number of people that we get on a career pathway to upward mobility. And so the sales that we generate are meant to fuel the innovation so that we can continue to build the product experiences and the platform that will, you know, one day, we hope, help everybody on planet Earth get on that pathway to upward mobility.

Hopefully we can become the platform that helps everybody get their first job right. Because you can’t get your second job without getting your first job. So that being the objective, there are a lot of kind of KPIs that can fall under that. But on day one of the company, you don’t have a whole lot of employees.

So really, to keep it simple, one of the first OKRs key results that kind of emerges is adoption rate or growth rate. and you can measure that in a number of ways. How many end users are using the service? How many customers are paying for the service? What is your annual recurring revenue for your software business?

And so in the early days, we kind of just stuck to two numbers to keep it real simple. what’s the number of people that were, helping get on a pathway to upward mobility, which was defined by, you know, using the service and then getting a job and then the second big one was with the ARR growth, annual recurring revenue growth, because that was an indication of adoption rate and traction for investors.

06:44
Gary: I found that really enlightening, just having two very simple metrics that were targeted against the business, because what it did was it for me leading marketing, it really focused us in leading our teams to figure out what are our departmental OKRs, right, that are going to deliver the impact that drives the company OKRs.

For marketing, we looked at the number of sales opportunities,

I always thought of the KPIs as kind of the leading indicators, not they would tell us whether we’re going to hit the OKRs, but they weren’t necessarily all impactful. They’re important. I don’t want to be totally dismissive of them.

But, you know, we agreed and we budgeted and we planned everything around. How were our activities, as a marketing team going to drive to our OKR, which then rolled up into the company OKR. Could you share how other departments in the business really kind of did the same thing?

Bharani: Yeah. So I think it’s worth just sharing our journey with OKRs. So first of all, if anyone has not heard about this book or read it, there is a great book, which is written by John Doerr called Measure What Matters. And in this book, he kind of really lays out the definition of OKRs and gives you a playbook for how to implement it.

I think it can be very challenging. Right. So, in the early days, we might have had just two numbers. But as the company grew, there were more more departments and then more people and, you know, it became a bit of a challenge to figure out, well, how do you organize everybody’s work to kind of focus on one mission?

And then how do you track that? So we used a project management software called, monday.com. And this is spearheaded, by a few people at the company.

Essentially, what happened in the early days is this thing got so detailed that, like, literally every single person in the company, had a project that had a KR that rolled up to their department that then rolled up to the company.

And so when you looked at it every quarter, it looked like we had something like 200 OKRs, which makes no sense, because that’s not how it’s supposed to work, right? You’re supposed to have like less than five. and today we’ve kind of re-vamped the system and made it much more efficient. And so today we have four OKRs.

So for this year, for example, for 2024, one of our OKRs is, “take care of our people.” So there’s KRs that we used to measure that. Getting to break even. That’s just a really important one. A third one is building out the infrastructure for managers to manage. So now that we have an actual org structure with various layers of managers, being able to give them the data that they need to make decisions is really important.

And then the last one is connecting the classroom to career pathways. That aligns with our mission. You know, we want to make sure that people who are accessing the service in the classroom ultimately get on that pathway to upward mobility. So those are our four OKRs. And everybody in the company is working on a project that relates to one of those four OKRs.

10:14
Gary: What kind of KPIs and so on do you guys track? Like you said, there were potentially hundreds of OKRs, and those become a second level down of KPIs and metrics that you track, as you can look at whether progress to the OKRs will be met.

Bharani: That’s right. What we called OKRs were not really OKRs. They were more like KPIs. So you had things like how many calls are SDRs making per day, which is more like, you know, you can call that a KPI. You could also call it a key leading indicator to whether or not we’re going to hit our opportunities pipeline. Whether or not we hit our number of opportunities is going to determine whether or not we’re going to hit a certain bookings target, and whether or not we hit a certain bookings target is probably going to determine whether or not we’re going to get to break even.

Right. So all of those are kind of, interrelated. But the OKR might just be getting to break even, versus all of those kind of downstream KPIs and KLIs, key leading indicators, might be things that the individual, managers or individual teammates manage on their own. To prevent it from becoming unwieldy. at the executive level, you mentioned we get together as a company once a week.

It’s much simpler to show the entire company how we’re performing against the OKRs, because every department is not going to have their counterparts’ departments, KPIs memorized.

Gary: Yeah. I would imagine by now that meeting could be a half day meeting every week if you looked at all the metrics. But I remember when we were running the SDRs and we had, as you say, their calls, how many meetings they set, how many of those IQMs, the initial qualifying meetings that they completed.

And we knew the conversion rates of all of those. All right. And so measuring and monitoring those leading indicators allowed us to pivot where necessary. I remember I would know sort of three quarters of the way through a month whether my SDR team was going to hit its target the following month. And, you know, that gave us the freedom to adjust and adapt where necessary to ensure that we delivered as we needed every month with the business.

Bharani: Yeah. And I think you really highlighted one of the most valuable components of an OKR implementation, which is you can use the data to make adjustments.

We live, you know, on planet Earth, it’s very likely that something will go wrong. And what’s really important is what are the actions that everybody takes when something goes wrong, like when, you know, you go off track, for example.

And I think one of the most important things, that any manager or any leader can do, is to become very introspective. So rather than kind of point the finger at another colleague or another department and say, hey, it’s your fault that we didn’t achieve this goal, it’s much more important to say, like, well, what to dissect?

Like where in the kind of segmentation of, all these interconnected KPIs, are we falling short because hopefully not every single KPIs falling short. Hopefully a lot of them are working. And maybe there’s just one thing, that isn’t working that needs to be fixed.

13:43
Gary: It’s interesting because you know, doing that kind of introspection, but realizing how interdependent everybody is right on one another for the overall business success. It really shows the importance of, you know, if one metric or one department is not hitting, what’s the downstream effect that has, you know, on other parts of the organization and their ability to deliver? And I know you don’t want to be pointing fingers on that. You know, does everybody think about how what they’re doing doesn’t just affect them and and their teams, but how it affects everybody’s ability to contribute towards goals?

Bharani: I agree. And like, that’s, you know, to go back to your point about like how we present these numbers company wide because the other thing you would hope to see as a leader is like when when we highlight an area of weakness, you’d hope to see people come together to say like, okay, let’s problems solve.

What can we do to improve this metric? Like, what do we think is happening, as opposed to what, you know, could happen, like, let’s say in a toxic environment where people are not problem solving together instead of pointing fingers and silo building. That’s the opposite of what you want. Right. And so I think OKRs can help you kind of identify not just, strengths, weaknesses, opportunities and threats, but they can also help you identify who’s got chemistry on this team? Who’s really great at rolling up their sleeves and, helping problem solve together, versus who’s who’s likely to kind of not not be helpful.

Gary: I like that way of thinking about it because, in effect, what you’re doing with the OKRs is you’re creating a framework for people to collaborate, right? As opposed to a framework, as you say, for people to create silos. And so in a certain sense this kind of gives you a structure that breaks down those silos and forces people to work together, as they see.

But what they’re looking at is they may get their targets, but at the end of the day, there’s only a very few targets that the company is looking at, and it forces people to think together in that way.

Bharani: I don’t know how good it is at forcing people to work together so much as it is like it’s going to become real obvious who is working together and who is not. And then you have decisions to make about your personnel, because one thing you can’t afford to do, especially if your objective is to be number one, is you can’t afford to have a dysfunctional team because that is a recipe for you to miss on your goals and objectives.

And it’s also a recipe to wake up at work and not be pumped up about contributing. I mean, what I found is that when even if you have like, a really challenging, OKR like a really steep hill to climb, if you look to your left and you look to your right and you’re just really jazzed and super excited about the people that you work with, you’re kind of like, okay, who cares?

Like, I’m excited to go on this adventure with my colleagues because they’re fun to work with. And I really like the way that they think so. But there is this other kind of, like, really important element about building a team spirit, team culture, and a vibe that I think emerges from having OKRs and seeing like, who really wants to get after it?

16:52
Gary: Yeah, that’s awesome. And that’s really what the ethos of this podcast is about is recognizing where, you know, companies can become dysfunctional and and considering what are the best practices,

Bharani: Just one last thing I’d say about that is, like, you can create the environment, but the individuals will self-select, if they want to get on stage, pick up an instrument jam right.

And that’s really what you’re looking for is like, man, like, can these people make music together? Because if so, I’m buying a ticket to this concert every single day. And if not, we got to talk about who’s in the band.

Gary: I love that. That’s awesome. All right. Cool. Well, we’re at the point now where I’m going to put all of my experts on the spot and ask you for three. Yeah, I know, here you go.

As we wrap up each podcast, right. We want to hear what are the best practices, what are the key things that listeners should think about and incorporate into their businesses and into their work life around this topic? So what are three best practices that you can share with the audience Bharani?

Bharani: Three best practices? Okay, I think the first one would be to keep it simple.

I think even if you just started with one OKR, that’s better than zero, right? Is that the intent is to build the habit.

If you can come up with that one OKR and just have everybody on the team look at that one OKR together and explain what they can do to contribute to that outcome and that key result.

That’s really that’s a great way to start. That’d probably roll into my second, best practice, which is everything starts small. I think one of the worst things you can do is, try to boil the ocean, try to just make everybody, you know, accept the change on, on day one. I think that even if, let’s say, for example, you are launching a new product, it would be a little strange to think that when you launched your MVP, that 100% of the market is going to adopt it, right?

Like normally when you launch a minimum viable product, you’re going to look for this like really tiny niche. that understands what you’re trying to do and that you are solving a pain point for. And I think that same kind of mentality is true when you’re managing change within your company or within your organization. So even if you’re talking about doing OKRs in your company, maybe all your departments won’t embrace it on day one.

Maybe you have to start with one department. or if you’re a small enough company, maybe you could do it company wide. But the point is, I think all change starts small and think of it as a snowball. You have to iterate. You have to kind of get the feedback of employees and users. They’re going to tell you things that you can do better, and then you’ve got to make those adjustments.

So I think an iterative approach to change management is better as opposed to maybe what sometimes you read about in the news or you experience that big companies where it’s a little more top down. So I’d say those are probably my, my top two. The third one, you know, everyone’s heard the phrase, culture eats strategy for breakfast.

I just could not agree with that more. In the early days of the company, there were numerous people that, you know, said, hey, these weekly town halls, can you just kill them? Like this seems like a total waste of time. And in reality, in 2020, we then had COVID hit and everybody went remote. And the weekly town hall was the thing that kept everyone connected, because everybody saw the progress of the company and therefore sit at home behind their computer screen.

They really didn’t have to worry about like, oh my gosh, you’re going to go bankrupt tomorrow because it was something that we just talked about very openly, like, here are the milestones that we’re trying to hit and then every time we had a celebration, we celebrated it together. And that really helped. Today, you know, I think I’ve heard some people refer to that campfire, refer the campfire as kind of like the heart soul, the heartbeat of the company. And so, I think culture is wildly important. If you focus on your KPIs before you focus on your culture, you got it backwards.

21:21
Gary: Yeah, I remember those. It was, the weekly, lead in to the weekend, those campfire meetings. And that was, it was a great way to get pumped up right at the end, because we all worked really hard and was a great way to to leave and feel like, you know, what that’s all for a reason.

Bharani: And you didn’t get emailed on the weekends. Right? Unless it was like some crazy emergency, which, you know, definitely does not happen. every weekend, like, you were kind of left alone, you know, post 6 p.m. on Friday and that was kind of the whole point is to work harder and we can get your downtime when you need it..

Gary: 100%, 100% Bharani. Well, thank you very much, for spending the time with me today. I think there’s some really big lessons, you know, to be learned from here. And you know what you’ve achieved in the business, over the years, you know, exemplifies that, right? You’re building that culture. You’re building that simple way of looking at the goals and operating the business.

And, you know, you’ve just been named, one of the most innovative companies in the world in your space. And so kudos for you for that, you know, for what you’re achieving with the team. Really appreciate your being here today. And, you know, for the viewers that are watching, don’t forget to watch the other episodes on the YouTube channel, what great looks like and, and the next episode, we’ll be looking at ways to avoid the finger pointing that often exists between marketing and sales and how to build a real, coherent and effective go to market team. So thanks, everybody for joining us. And thanks Bharani. Really appreciate the time. And it’s great to see you. And until next time everybody. Thank you.

Bharani: Thanks for having me, Gary.