OKRs to make your Consolidator more than OK

18min
Season 1
Listen directly on:

In this episode of Consolidate That! Ryan Leech and Dr. Ivan Zak discuss the main principles of goal settings and OKRs, or objectives and key results. What are they? How do they affect the business? How can consolidators use them to implement goals and objectives across the entire framework?

Topics discussed:

  • Learn about OKRs and get to know how they affect business, and how can consolidators use them;
  • Discover the Grandma Rule;
  • SMART goals and OKRs: do they overlap, are they the same thing, or components of OKRs;
  • How the OKR system allows every level to own the size of the task at hand for themselves;
  • The difference between benchmarks and OKRs;
  • Potential risks for missing OKRs for the organization;
  • The difference in goal setting for technicians vs veterinarians;

Helpful links:

Speakers

Dr. Ivan Zak has earned multiple accreditations in veterinary medicine. After graduating, he worked in 35 veterinary hospitals across Canada, where he was inspired to create Smart Flow, a first-in-the-industry workflow optimization system. Smart Flow was subsequently acquired by Fortune 500 company IDEXX, where he became General Manager of the Software division. After consulting 500+ practices worldwide on workflow optimization, he decided it was time for a new adventure. Dr. Ivan has a holistic view of the whole veterinary business market and he’s making his next step the creation of a more cohesive, unified platform that will ultimately benefit the veterinary professionals.

Transcript

Ivan-Zak
Dr. Ivan Zak

Hello everybody and Welcome to Consolidate That! Ryan, how are you this morning?

Ryan Leech, Director of Sales
Ryan Leech

I’m doing great, how are you Ivan?

Ivan-Zak
Dr. Ivan Zak

Pretty good, sunny day in Ukraine, the spring started, we usually say that spring starts on the first of March and in North America, you guys have some weird number, something like 20th?

Ryan Leech, Director of Sales
Ryan Leech

Yeah, I know, you guys kept confusing me. Everyone kept saying, “I’ll see you in spring” and I thought, are we off for half of the month or what’s going on here but I almost didn’t show up to work anymore. Yes, but spring has not quite sprung here but soon, we will catch up to the Ukrainian world.

Ivan-Zak
Dr. Ivan Zak

Awesome, what are we talking about today?

Ryan Leech, Director of Sales
Ryan Leech

Yeah, today, we’re going to be discussing the main principles of goal settings and OKRs or objectives and key results.

Ivan-Zak
Dr. Ivan Zak

Cool, I love that topic. It’s actually one of the most important things, I think. We talked about the quarterly planning and I think that’s where these things should be implemented. What do you want to know about OKRs?

Ryan Leech, Director of Sales
Ryan Leech

Yeah, I’m trying to get a good idea from you of sort of just a broad approach, right? What are they, how do they affect the business, how can consolidators use them to implement goals and objectives across the entire framework?

Ivan-Zak
Dr. Ivan Zak

Okay, well, just in general where the OKRs come from, the concept was brought up in I think the early 80s by the guy named Andrew Grove and he actually explained the concept first but I think that as someone who brought it really to life was John Doerr. I’m sure I’m butchering his last name.

The point was that it’s fairly simple concept but some people have trouble grasping it. Really, what it is, it’s when you are doing quarterly planning, you start at the top of the organization or the annual planning so you create some sort of goals that you want to reach and then you cascade it down the organization and this is a simple framework how you can do that.

What you do, your goals of the organization at the executive level are objectives, they need to be as a clear objectives of what we’re trying to achieve. Then the next level of the organization splits those objectives into the key results that they can reach or achieve by each department or each role and that will become subsequent sort of building blocks to that objective above.

The next level down, they will break them down further because they key results and the level above will become an objective for them and they develop their key results. It’s cascading from objective to key results and then more key results and more key results down to the bottom of the entire work chart.

The key there is to have a measurable result. With that, it just needs to be very easy to say, “Did you do it or did you not do it?” It has to be black and white, it’s not like, we want to be better. That’s not measurable, we want to be better at counting our inventory so our cause get down to 20% and the general practices in a particular region.

That’s the key result that you can measure and you can say that which you did or not.

Ryan Leech, Director of Sales
Ryan Leech

I think the sort of tool that you told me that was really helpful for that was, could you describe it to your grandmother or somebody’s grandmother?

Ivan-Zak
Dr. Ivan Zak

That’s our grandma rule.

Ryan Leech, Director of Sales
Ryan Leech

Although I think you had a great story about someone’s grandma being the head of product development at Microsoft or something and really throw in that rule out the window one time but – but a normal, my grandma would need to be able to describe them. Do these – I’m really familiar with smart goals, that’s something specific, measurable, achievable, relevant and time-bound. That’s a key thing that if you’re not familiar with that, ask yourself, is every goal that you’re doing smart and that’s a great way to determine that.

Our smart goals and overlapping concept for OKRs, are they the same thing?

Ivan-Zak
Dr. Ivan Zak

I would say it’s more like a component of it. Your key results should be smart. If you’re setting an objective and to reach that objective, there are certain key results that next level down is performing, their key results should be specific measurable, achievable and relevant and time-bound.

You actually can execute on them and someone can say, do you do them or not. It does need to cascade through the organization and why that is important because what you see a lot, when the executive team is creating goals for the next quarter.

One mistake is that they create goals for other people. That is an absolute no-no because that’s a top down approach that eventually will cause the burnout and just lack of motivation because when you don’t come up with what I’m going to do, to hit organizational target above me to get there, then it’s a very top down approach.

Sometimes you don’t – you just don’t own it. There is no buy in and there’s no real motivation to work on that particular item. Making the goals for someone else is a big mistake. The second aspect here, which is really important is that each level of the organization should be setting goals for their level.

If you’ll think about the split between the levels of their organization that we usually talk about in consolidators is we talk about the board level, executive level, department then regional, then hospital.

A bit mistake, if executive level will start making goals for departments or if the region will start making goals for the hospital. The OKR system or management methodology allows every level to own the size of the task at hand for themselves and depending on how you manage your organization but it could be anything from sort of initiatives at the executive level that rocks at the department, milestones for regional and hospital works on the projects.

It’s how you slice it but the ultimate goal is that everybody at their levels sets the key results that they want to achieve to execute on the objective above.

Ryan Leech, Director of Sales
Ryan Leech

Great. The cascading aspect is really key and I think we did an episode about quarterly planning which I almost think people should listen to in reverse order, right? Listen to this, understand how to do it and then listen to the quarterly planning because this would be really helpful to figure those things out.

Just to rephrase it, your OKRs, you need to be setting those – the objective needs to be a corporate-wide understanding and idea that’s cascaded down but people need to be responsible for determining what those benchmarks and those measurements are for their department and for their own roles, correct?

Ivan-Zak
Dr. Ivan Zak

Yes, benchmarks are usually for something repeatable. When you’re setting OKRs, they’re usually something that is done and completed. The benchmark is something like you’re monitoring your cogs and you know, at a certain level, it should be able to time your revenue or something like that. You want this sort of executable but in general, yes.

Ryan Leech, Director of Sales
Ryan Leech

That’s great, what are some of the potential risks of missing the OKRs for the organization?

Ivan-Zak
Dr. Ivan Zak

Not only OKRs but even if you don’t OKRs and people are listening there are thinking, “Okay, well, do I need to do this? We have perfect goal setting.” One, if you feel like you’re assigning the goals, you’re in the quarterly planning to other levels of the organization, basically, not yourself.

Then that’s potentially triggered that you need OKRs. The other one is that if you’re not hitting your goals consistently in the organization, then that might be a trend that may recommend to look into OKRs because then, usually, if you’re at the top of the organization and they’re not achieving your goals is because they were not linked throughout the levels and then, when they’re linked from the bottom going up, then when the lower levels of the organization complete their rocks.

Then they contribute to the top rock and then they flow back up. That’s why you want to have OKRs on the organization.

Ryan Leech, Director of Sales
Ryan Leech

That’s helpful then. Across the board there, who should be involved in the planning and the setting of those OKRs?

Ivan-Zak
Dr. Ivan Zak

I think this is a really good topic and I was just writing about it today. We’re usually looking in the organization, if you think about consolidation in general, we’re looking at these levels, right? You have your executive level, you have your departments, you have your regional, you have the hospital, this is how you manage your metrics, this is how you’re looking through your goals, achievement.

I think we rarely look at what doctors are doing. I was thinking about the burnout concept and why veterinarians are going into the burnout. Just if you think in general, who the veterinarians are and how they arrive to where they are, it’s usually people that from the early childhood, they wanted to become a veterinarian.

They became passionate about this idea and then they thought about doing something that will take them the next 20 years to become. That’s a pretty significant goal setting for a kid. Then, they go through a very difficult process of completing their grades with a good degree and then they’re going into the college to do sciences and then they…. Where you have to be to apply for vet school, you have to have all your grades and sciences and the bachelor over 85% so you can apply, then you apply to vet school where I think it’s usually anywhere between one to 10 or 15 candidates that gets in only one out of 15 and once you are in there, you’re working on completing the degree that as some people say harder than the medical or law degree.

You are working really hard on very high goals for the last 20 years and then eventually you graduate, you become a veterinarian and then think about dynamic in the clinic. You show up at eight, you leave at five. No goals, no purpose, no passion, so this is where I think that piercing the organization with goals down to the level of the veterinarians who are the units that are producing revenue is extremely important and now that I think about the burnout, I actually think that that’s one of the most important reasons for burnout.

That veterinarians who are on 100-miles-an-hour, going through their last 20 years of school then graduate and go to a complete halt and then if we don’t engage them and what the consolidators do now, they throw money at them. If you think about it, there is a study that talks about the fact that anything over $70,000 in North America and in the States in particular is actually covering the basic needs.

Anybody who makes over $70,000, your basic needs off you know, if you think about Maslow’s Hierarchy, your safety, your basic physiological needs, everything is met. Throwing more money at the person that is not satisfied because there is no self-satisfaction through goal achievement, which is a huge part of happiness, throwing more money at that person is not going to do the trick. Putting the goals in front of the veterinarian and knowing that you do differently on a day-to-day routine I think will be very important.

I think that successful organization is going forward will really benefit from when you’re thinking about the veterinarians as the revenue generating unit and the person and then setting the goals in front of them will actually will work on decreasing burnout in our profession.

Ryan Leech, Director of Sales
Ryan Leech

I totally agree. I think that having veterinarians in my family and understanding the passion level and the difficulty to get where they are and then the difficulty in the practice is paramount to improve for folks but do you think that I know in your burnout study that you did, you found that the veterinary technicians and the receptionist and everyone else within the clinic is also experiencing the same levels of burnout and sometimes even higher. Should they be additionally involved in the OKR settings for their own specific roles?

Ivan-Zak
Dr. Ivan Zak

When we talk about the goal setting for technicians versus veterinaries, I think that they do different work and I think that if we want to really map the productivity of veterinarian to overall financial gains of the organization, I think that’s one direction of the goal setting. For example, if you think, I’m just remembering my days as the emergency veterinarian, I hated to write medical records after work.

I had no connection of that particular task to anything that I do and I thought that that was one of the biggest triggers to have a burnout for me. Now that I look back and I’m thinking if I had some sort of goal set for myself personally, let’s say I have a goal of maybe I don’t know, purchasing a new car, whatever it is then each day, when I see the contribution of that day to what I’m trying to achieve at the end of the day, when I am writing the medical records for 20 cases I’ve seen today.

I see what revenue I generated from that, I think I will be more motivated but it’s back to the money question. The second part I think in motivating veterinaries if you think about what they were motivated during the vet school is learning. It was a lot of learning and then applying that learning in your profession. I think that the whole concept of providing CE but not with the purpose of just providing CE, a lot of veterinaries go to all of these conferences just to meet with their school friends.

Have a party and then go back and tick the box of 60 hours or whatever you’ll see that you require but if you go back and the management will spend time with each veterinarian of what are your learning objectives or goals for this year and then build it out for the entire year and say, “I want to learn how to do ultrasound” which one? Abdominal ultrasound. Okay, this quarter what would you like to learn? Urinary system. This week, I want to see five kidneys and adrenal glands on there.

You can literally split your goals as a veterinarian on learning objectives as well as financial. Those are the two about the veterinarians but when you think about the technicians and managers and assistants in the clinic, I think they have different work objectives and I think that them being the mechanism, the supportive mechanism off the veterinary work flow, I think they are responsible of cutting those costs and I think setting the inventory management.

The appointment fill rate, things like that I think they could be sliced into objectives goals for the technicians and the support staff in order to decrease the cost and then benefit the entire operation at the top but they need to be set in front of people because otherwise, they show up to work. They want to be there at nine to five, leave us early as they can and then there’s no long-term goal. It’s showing up, doing the work, leaving home and there is no really passion. There is no purpose, I’m just doing this and it will become really boring really fast.

Ryan Leech, Director of Sales
Ryan Leech

Do you think that the veterinarians and the corporate team should make those OKR’s very visible to all levels? I know obviously when there’s financials involved it can be touchy. Should the technician know the veterinarian and should they discuss that like, “Hey, I’m working hard to be able to break my CE into these levels” to make it so that everyone sort of shares the idea of what those goals are?

Ivan-Zak
Dr. Ivan Zak

I mean that’s probably a personal thing and I think that it depends on how people are pursue the information but to just understand where we are in the veterinary domain right now, there is none of that. There are people, if you think about the happiness in the workplace, let’s call it, if you go to the concept of flow, which I am passionate about right now and positive psychology researching how to get to flow.

When sort of one of the geniuses that worked a lot on this, Csikszentmihalyi, he is talking about the happiness at work being achieved and flow achieved at work with the clear goals, immediate feedback and a balance between the opportunity and capacity, meaning that I am tasked to do something that is slightly challenging what I can do and continuously pushing my boundaries but the clear goal setting and immediate feedback is something that you just mentioned about visualization.

That is also in the health care industry that we talked about and one of the lean principles is that it’s visualization of the process and visualization of the results. If you can provide veterinarian at the end of the day, the results of what they’ve done on both of those goals, one is the hard goal on the numbers and the financial with how they benefit from it plus what they have accomplished and put that little check box next to that kidney that they wanted to find three times during this week.

Instead of the goal setting because you get that influx of dopamine and that’s how happiness is connected to the goal setting. I think that visualizing it to answer your question I think is an absolute must to provide that to the actual people that do the work and they can choose whether they want to monitor it or not and that depends on the personality.

Ryan Leech, Director of Sales
Ryan Leech

I think it’s great that we can look at some of these goals and these ideas of business principles and how they’re relating back to approving people’s lives day in and day out specifically with the veterinarian view but useful for everyone from the executives all the way through the entire clinic. Thank you for the info here Ivan. I know that I’m going to take this and perhaps reevaluate some of the ways that I am looking at some of my objectives and key results for the coming quarter.

Ivan-Zak
Dr. Ivan Zak

Yeah, thank you for asking the question and just to reference, the organizations that implement key objectives and key results are LinkedIn, Twitter, Uber, Microsoft, so they’re large companies that implemented that and there are two books that I would like to recommend if anybody is interested. The OKRs that is well covered by John Doerr and the book is called Measure What Matters and then if you want to learn more about the flow and peak experience, I think the starting book is great by Mihaly Csikszentmihalyi and it’s called Flow: The Psychology of Optimal Experience.

Ryan Leech, Director of Sales
Ryan Leech

Fantastic, well again, thank you for all the info here. Another wonderful conversation and I’m looking forward to next week and our next guest.

Ryan Leech, Director of Sales
Ryan Leech

Likewise, cheers.