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As we’ve talked to dozens of founders, it’s become clear there’s no one-size-fits-all approach to goal setting. What works for one company might be a disaster for another. The ideal framework seems to vary based on the culture and values of the business, but many founders succeed by stealing the best parts from other companies.
So we’ve compiled several goal setting approaches from founders with different team structures, sizes, and cultures. We hope the following insights provide you with ideas or a foundation to test your own goal-setting frameworks and strategies.
Setting goals for fully autonomous teams
Ratio, 19 people
Currently with 19 team members, collaboration happens naturally at Ratio due to their loose team structure. Even the people with operational roles are constantly working on how to automate their tasks so they can focus on more interesting things. No one person has all the skills needed to tackle any one project alone, so collaboration is critical to move projects forward.
Marc Biles, founder and CEO of Ratio, spends up to two months every year updating the company’s annual business plan. During that process, he comes up with OKRs (objectives and key results) for the quarter. These OKRs for the company as a whole cascade down through the team, with each team choosing their own quarterly objectives.
Marc oversees this process to ensure they fit into the larger business objectives and vision over the next 12 months. He gently nudges the different teams during the goal-setting process to ensure all team objectives still align with the overall company objectives. “The key thing is to keep the objectives simple,” Marc shares.
Their main objective is to grow and extend the margins across the group. It’s easy to cascade those big, overarching objectives down into teams and individuals because they’re simple to understand.
(Want to learn more? Listen to the entire Ratio podcast.)
Makers Academy, 24 people
Makers Academy also has a loose structure where their team of 24 self-organize around tasks. They work together to identify who’s best to make the decisions, who’s best to lead a certain effort, and who’s best to help. This hierarchy changes with each task. Co-founder and CEO Evgeny Shadchnev says it’s a very natural and ad hoc process.
To allow for such autonomy, they build their team based on trust, not on fear. Evgeny saw so many practices in modern companies being built on fear and didn’t want to replicate them. Makers Academy starts with the premise that every team member is trusted to do what’s best for the company.
They were curious how far they could push that ideology. The result is a team who decides what they work on, how they work on it, and how much they’re compensated for it (learn more about their self-setting salaries here).
Instead of setting a revenue goal for the end of the year, for example, they organize themselves around the mission of the company by asking “What is the purpose of the company?” followed by “What can we do today to push us closer to that point?” Because everyone is trying to do what’s best for the company, even if a strategy or test fails, it self-corrects and works out for the best in the long run. That’s why Evgeny suggests focusing on the long term and hiring people who have bought into that vision.
In practice, it looks like a lot of self-organization.
(Listen to the entire Makers Academy podcast.)
Verdigris, 24 people
Co-founder and CEO Mark Chung and one of his co-founders, Thomas, came from a functionally structured company where each person had a specific skill and function. They found this to be a poor way to facilitate collaboration. They experimented with making roles more cross-functional so that more people with overlapping skill sets were collaborating on the same team.
They then found themselves needing a designated role to manage those cross-functional teams. They didn’t want to reintroduce management structure so they created the elected team structure instead.
All teams at Verdigris operate with the same agile paradigm working in sprints, including Marketing and Sales. The elected representative for each team serves a hybrid product owner and scrum master with the responsibility to manage a Pivotal board where they prioritize the tasks at hand on a sprint-by-sprint basis. They also communicate the needs for that sprint to their team and facilitate the sprint. Each representative rotates out every two quarters.
The founding team meets annually to define a set of objectives around what they want to accomplish and how they’ll measure success for the year, keeping the plan loose to leave room for team innovation. But even a loose plan needs clarity. Like many of the companies we talk to, the entire Verdigris team meets once every quarter to decide what they want the company to look like for the next quarter, what their goals are, and what metrics they’ll use to measure them. During this time, they set OKRs for every team and individual.
(Listen to the entire Verdigris podcast.)
Setting goals for core teams
Vinyl Me Please, 15 people
At Vinyl Me Please - a monthly subscription record company with 15 team members, different teams own areas of the business with each member owning their own tasks. The entire team then gets together every two weeks to report progress, give ideas, and share how they can help each other. The leadership team re-shares their vision, goals, and progress against those goals. They encourage areas of the business that aren’t moving as fast as they’d like and celebrate those that are.
To set goals, co-founder Tyler Barstow outlined what they wanted to be as a company in practical terms. The leadership team asked themselves and the team: “what does the best damn record club ever look like?” Then asked, “what does support, content, marketing, etc. look like for the best record club?” Those answers end up being their goals for the year or quarter.
They then arrange those goals in a way that makes people accountable to accomplish them and feel free to shift direction as they’re learning along the way. They try to get from the abstract to the tangible as quickly as possible. They create timelines and structure around the practical goals mentioned above so they can answer the questions, “was this a good idea or no?” and “what returns is this idea getting us?”
(Listen to the entire Vinyl Me Please podcast.)
Marvel, 31 people
With 31 employees, Marvel has recently broken their team out into the core departments needed. Each team has its own mini-culture and way of working, with a leader assigned to each. Co-founder Murat Mutlu and the leadership team leave choosing the best tools, processes, and collaboration techniques up to the teams and their leaders.
At their current stage, Marvel uses KPIs (key performance indicators) to keep the team aligned as the company grows. They’ve found it most effective to have each team focused on one or two core things at a time, then move onto the next. Murat knows they’ll eventually need to roll out KPIs at the individual level. But for now, they’ve found that the team self-assigns responsibility well, as long as they know their focus.
(Listen to the entire Marvel podcast.)
Segment, 130 people
In the early days, with 20-30 employees, Segment had a wild west approach to goals where everyone did what they had to do to take the company to the next level. As they reached 50-60 employees, co-founder and CEO Peter Reinhardt realized they needed more structure around goals. The team needed context behind what they were working on and began taking a collaborative approach to setting yearly goals.
Now at 130 team members, they’ve gotten better at setting goals around what they want to accomplish, then orienting their team around those goals.
Peter drafts the annual plan, completing about 60% of it. Then the executive team gives feedback contributing about 20% until they get it to 80% complete. They then share it with the rest of the team who shares their feedback and collaborates with their executive team member to work on their goals and activities quarter by quarter until the plan is 100% complete.
Modeled after the example of SpaceX, Peter takes a mission to metrics approach for structuring and organizing the Segment team. Everyone understands the breakdown of the final mission (for SpaceX it’s to go to Mars) down to the things they’re contributing to (e.g. if they’re successful landing then the designing of gimbals on a rocket engine was successful).
An important element of goal-setting at Segment is writing the goals and processes down. Peter says that as managers with concrete deliverables, it’s easy for things like goal-setting or decision processes to become ingrained culturally and not written down. But to be effective, managers need to be held accountable. And to be held accountable, goals and processes need to be recorded.
(Listen to the entire Segment podcast.)
Setting goals for a larger, flat hierarchy with team managers
FareHarbor, 135 people
Beyond team managers at FareHarbor, the rest of the company is structured as a flat hierarchy. Now with over 135 people, there’s an expectation that everyone is working towards the common goal of improving the customer experience and managers are working together to make that happen.
Co-founder and CEO Lawrence Hester uses KPIs to help everyone move towards the same goal and believes in keeping their KPIs flexible. While there might be the one goal the company is continuously working towards, what teams and individual people are working on constantly changes.
Because each team has slightly different goals, they re-evaluate how KPIs move the organization forward about once per month. FareHarbor’s leadership explains to the team that although they set KPIs, if the metrics aren’t driving the business forward or helping the team grow professionally, they’re going to change.
(Listen to the entire FareHarbor podcast.)
Finding what works for your company
When it comes to setting goals, each company has their own unique approach. Hopefully, the examples we’ve looked at in this post will help spark ideas for what might work best at your company depending on your team structure and culture.