My partners and I are currently in the process of opening a new restaurant in NYC’s West Village (fingers crossed we’ll be able fully open, restrictions free by late summer 2021), and I want to create OKRs for my team to keep us focused and motivated. We have our company-wide Objective: Be a second home for the people in our neighborhood. We’ve also recently figured out our mandatory financial benchmarks we need to meet to pay the bills (x amount in profit, keep labor under x%, etc.). I know OKRs are supposed to be aspirational and motivational, but is it a good idea to include the ‘keep the lights on’ goals somewhere in there, too?
Thanks for writing in and for your great question. Opening up a restaurant during a global pandemic sounds like a very daunting task, so I think it’s great that you’ve chosen to use OKRs to help you along the way.
Goals like ‘keep the lights on’ or, to be a little cheeky, ‘don’t run out of money’ would be considered Committed OKRS (the things that must be achieved). You can absolutely include these types of revenue based goals in your OKRs—as long as you’ve decided that’s what matters most. I’ll explain.
OKRs can address your company’s most pressing needs - the leverage points that are most important for your team to change - in the moment. For more established companies, making ends meet would be considered ‘business as usual’ and doesn’t make for great OKRs. For a growing business, or one where the ‘usual’ has not yet been established, it’s perfectly fine for one of your first OKRs to focus on the benchmarks that keep the lights on. Keeping in mind some of the challenges you’ll no doubt be facing pandemic-wise, maybe the OKR could look something like:
O: (Restaurant name here) runs like a well-established and successful restaurant.
- KR: X in sales per month (x percentage from to-go and carry-out)
- KR: Labor kept below x weekly
- KR: 100% pass on CDC safety inspections
- KR: Obtain sidewalk cafe license for outdoor seating before opening
Once you’ve got your system locked into place and your restaurant is running like a well-oiled machine, you can file that OKR under ‘business as usual’ and shift your focus on growth opportunities. You’ll obviously always keep an eye on profit and labor cost, but if all goes as planned, it won’t need to be your main focus in the next cycle.
Switching gears a bit, the Objective you mentioned in your letter (be a second home for the people in our neighborhood) is a fantastic example of an Aspirational OKR. These are the highbar, visionary goals that state how we want the world to look. They also, to borrow a hospitality phrase, pair perfectly with Committed OKRs. We recommend a healthy ‘blend’ of both. Have you considered how you’ll measure your Objective yet? Here’s a couple ideas for you:
When you grade your OKRs at the end of each cycle, you may choose to roll one or all of your Objectives over, or you may choose to shift your focus entirely. It’s all about figuring out what your company needs most at that moment.
Well Chef, I hope this has been helpful. Best of luck to you and your team, and I hope to grab a bite at your new place sometime in the future!
Billy from the What Matters Team
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