How Google Uses Sales OKRs to Drive Sustainable Results
People are always asking for sales OKRs examples, so when I heard that Googler Sameer Rane gave a presentation about how his team uses OKR in sales, I decided to reach out to him.
I am thrilled to announce that Sameer, Sales Strategy & Operations Manager for Nordics and Benelux markets at Google, agreed to write a guest post together with his colleague Noelia Fernandez Arroyo, Director, Large Customer Sales for Northern Europe.
The right way to use OKR in sales is to think beyond the sales quotas – which are usually kept apart from OKRs – and focus on the changes in behavior and processes that will drive revenue. In this post, Sameer and Noelia share real-life stories of how OKRs succeed – and failed – in doing that.
Please note that different teams use OKR in different ways inside Google and many other leading companies, so this post represents the author’s’ personal views and experiences with OKR.
Enter Sameer and Noelia.
This post aims to provide a few practical examples of how sales organizations can use OKRs to drive sustainable business impact based on our experience working at Google in Northern Europe.
In this post, we cover two examples that have worked well and one that didn’t work for us. For each case, we describe the business context that led the team to select that OKR and the results that were driven by it.
Sales OKRs Example #1
Business context: Google has been leveraging machine learning to generate automated opportunities for Sales teams. However, a strong degree of behavior change was needed to drive confidence in the Sales teams to “trust” machine-generated opportunities.
End Goal: Make machine-recommended opportunities a key component of the Sales pipeline for the business.
OKR Used and How it Evolved:
Objective: Get the sales teams to adopt machine-recommended opportunities as part of their core operating model.
- Increase the review rate of the machine-recommended opportunities from X to Y.
We wanted to track the adoption of the machine-recommended opportunities by front-line sellers. This OKR was monitored in stages initially by measuring the review rate of these opportunities where the teams marked these as “Accepted” or “Not Accepted.” Eventually, as teams grew more comfortable with the “review rate” being the Key Result, we moved to “Pitched rate,” where we started tracking the number and dollar-value of reviewed opportunities that were pitched. Subsequently, this was updated to “Implemented rate” as the Key Result, where we tracked the final implementation or winning these opportunities.
Results: By setting and tracking this OKR over a 24m+ period, the sales leadership was able to drive a sustainable behavior change among the sales teams to the extent that the machine-recommended opportunities now form an integral component of the sales pipeline. The strongest proof point for this change is the fact that this operating model has become an integral component of the behavior of the sales teams and we don’t need to set a specific OKR for it.
The largest business benefit from this change has been that the sales teams can focus now on driving higher-value deals by relying on machine learning to identify scalable opportunities.
Sales OKRs Example #2
Business context: As part of setting up a team of product sales specialists in the region, the ambition was to drive higher product adoption at an overall market-level that spans multiple channels, i.e., large, medium and small-scale portfolio of customers. However, the compensation scope for the sales teams was tied to a single channel, and hence we needed an alternate mechanism to achieve the goal.
End Goal: Make the Specialist team operate in a cross-channel manner to drive product adoption at market-level while maintaining the compensation design.
Key Result used: Increase cross-channel product adoption for priority product metrics from X to Y
Results: By setting cross-channel OKRs while maintaining channel-level compensation, the team was incentivized to identify scalable and innovative ways of driving product adoption across channels. This led to a higher degree of collaboration with advertising agencies that operate irrespective of channels. Teams included clients from another channel for product training sessions. This has resulted in global leadership for our region across some of high-priority product metrics.
Sales OKRs Example #3
Unfortunately, not all OKRs work as expected. This last example is about an OKR that did not deliver the business impact as initially anticipated. And knowing the “why of failing” is as important as we aim to get better at driving behavior all the time.
Business context: As part of driving a stronger sales mentality, sales teams were encouraged to upsell on top of the budgets already agreed with the customers.
End Goal: Make upselling a core component of the sales team’s operating model
Key Result used: Drive incremental $ of upselling in the quarter of X.
[Note from Felipe: I would rewrite the Key Result above to Increase upselling from X to Y.]
Results: After tracking this Key Result for a couple of quarters, we could not establish a clear business impact on the upsell revenue being booked by the Sales teams. In hindsight, there were two key challenges that influenced the execution of this OKR. The first challenge was around reliable reporting of upsell opportunities. The measurement relied on the sales teams tagging an upsell opportunity e.g. [Qx UPSELL]. However, the sales teams either did not always put the tags or misspelled them, leading to the incorrect representation of actual upsell activity. The second and the bigger challenge, however, was that of moral hazard, where the teams could under-report a sales deal and add the remaining component as an upsell to “show” success on the OKR front.
In summary, an OKR should be a mechanism to create a sustainable business impact that drives value for the organization and provides a clear line of sight for the teams to prioritize their work. And more importantly, that everyone in the organization understands the why behind the OKRs.
Ultimately, success is proven when behaviors have changed, and you don’t need to include that topic on your OKRs anymore. You will definitely need to track that behavior as part of very strong business rigor in your routines (business review meetings, quarterly reviews, etc.) and great questioning, to make sure nothing is dropping in the business performance. But definitely, we embrace OKRs as a very smart way to motivate and guide our business and teams.
[Note from Felipe: What Sameer and Noelia are saying here is that if you succeed, you will have created sustainable change and you will be able to turn you Key Result into a health metric/monitoring KPI.]
This post is also available in: BR