Edmunds.com COO/CIO Puts BetterWorks at the Center of Company s Leadership Goals and Accountability Process

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1 Edmunds.com COO/CIO Puts BetterWorks at the Center of Company s Leadership Goals and Accountability Process Overview Industry: Automotive Size: employees About: Unique, trusted and highly visited car shopping site, serving nearly 18 million website visitors each month Snapshot Accomplishing work that just keeps the lights on may be enough for some executives and their teams, but not for Philip Potloff and the Edmunds.com organizations that he oversees. As the company s chief operating officer (COO) and chief information officer (CIO), Potloff believes in setting goals high and focusing everyone on achieving them. He advocates the Objectives-Key Results (OKRs) model as a way of quantifying work progress. He also recognizes the value of the BetterWorks goals management platform that Edmunds.com now uses to support its leadership and accountability process. Potloff says the purpose-built BetterWorks infrastructure, with its simple interface is enabling the car-shopping site leader to collectively set employee expectations and achievement levels higher than ever. Business Challenges Improve employee visibility into the most important company priorities Make time to set and manage stretch goals and support individuals efforts to achieve them Provide a more efficient way than spreadsheets to track OKRs for 400+ employees Solution The BetterWorks platform improves visibility into the work being done across Edmunds.com organizations and within teams, providing a better level of pacing while bringing greater focus, accountability and achievement to management priorities.

2 Benefits Greater visibility into business goals and achievements More realistic commitments with higher levels of accountability across the organization Better work pacing for teams and improved resource management for leaders BetterWorks is the number one tool at Edmunds.com (outside of a revenue statement) for managing achievement. It is unquestionably at the center of our leadership goals and accountability process. All goals in BetterWorks are used to position us for growth or to grow our business. Philip Potloff, Situation COO & CIO, Edmunds.com Philip Potloff has a reputation for leveraging technology to improve business and bringing out the best in people. At Edmunds.com, he is committed to ensuring teams under his leadership understand the company s top priorities and work toward achieving them. Two years ago, as the CIO at Edmunds.com, Potloff introduced the OKRs model to the team of six vice presidents and directors reporting to him. OKRs would be a replacement for the company s traditional annual planning approach a process that Potloff believed was broken. After meeting with his executive team to set their quarterly goals for the second half of the year and reviewing those goals together a couple of times, he realized that IT needed to focus on more strategic initiatives. Maintenance is just part of IT s job. If we focused solely on that, we wouldn t be doing anything to grow our capabilities or to drive the types of innovation that account for results. Our OKRs needed to be bigger, for example, building a new CRM system to support new product lines or improving the delivery rate of the advertising business, remembers Potloff. We needed everyone to make time for stretch goals. Although OKRs provided his direct reports with a better understanding of how their work and the work of their teams contributed to the organization s larger purpose, managers still focused on, yet failed to reach, the loftier goals that management had set.

3 Traditionally, we had set big goals at the beginning of the year, but people didn t look at them every day. There was a lack of accountability before we moved to OKRs, says Potloff. Yet even with OKRs, people overshot at first because they were only working on the big goals that we had outlined. When we asked employees to evaluate their work, everyone put themselves at 1 or 0 because they hadn t been able to achieve anything meaningful until we transitioned to a quarterly planning cycle. Potloff and his team of direct reports were tracking goals on spreadsheets at the time. We were using Google Docs but there was zero visibility; we had no management and tracking of our progress, he says. Still everyone saw opportunity for success if the business could efficiently drive the process down into its teams. That s when Potloff discovered BetterWorks. Solution Potloff recognized Edmunds.com could attain greater success by establishing stretch goals and breaking them into smaller goals, then supporting the whole achievement process with the BetterWorks platform. The Edmunds.com OKRs process was immature and could grow with BetterWorks. At the start of the following year just as Edmunds.com began working more closely with BetterWorks Potloff was promoted to COO. His new role included additional organizational responsibilities, including some teams with little or no goal setting processes in place. He immediately put these new teams into BetterWorks. As COO, Potloff set the company s annual priorities, Yet initially, I didn t spend enough time looking at the smaller goals, he recalls. Because we ve been doing Agile software development sprints here for nine years, I should have known better. I needed to break our large company goals down in a similar way. The following quarter he did just that, going back into BetterWorks and establishing smaller, more focused goals. That s when it became obvious, he says, Putting larger goals into BetterWorks as partial goals would equal success. We immediately detached long-range planning from corporate goals and broke them into smaller achievements. Now most Edmunds.com employees regularly use BetterWorks to set, manage and track enterprise goals. Potloff meets with departmental heads from advertising operations, customer support, sales operations, engineering, and other teams

4 to review OKRs twice a quarter. Some leaders bring their line leads; others come alone. We review and score the past quarter together, and then look ahead, explains Potloff. During our second meeting, we do a mid-quarter check-in to reprioritize and make any necessary course corrections. Edmunds.com has approximately 36 named projects per quarter. Using a traditional four-step implementation process and a planning pyramid, management categorizes projects and resources into the following three areas: Accelerate (untested) Grow (current drivers) Sustain (core to the business) The company then establishes goals and individuals use BetterWorks to actively manage those goals for each of their assigned areas. Executives find the BetterWorks hierarchical view of goals extremely valuable. This view is most helpful mid-quarter, Potloff explains. We operate a very cross-functional organization with lots of contributors to a project. For example, I can see if advertising operations is releasing a new forecasting tool whether analytics has a goal to add algorithms to it. That s how a high-level, real-time advertising BetterWorks helps us drive operational excellence and accountability. When we collectively commit to a set of objectives, we can set our sights higher. Philip Potloff, COO & CIO, Edmunds.com performance delivery goal might feed into another team s goal. Potloff also appreciates the tailored push notifications from BetterWorks. Alerts and dashboards are easy to scan. I like them because it s hard for one person to track the hundreds of goals that we have in our system each quarter. In one glance, I can see what people are achieving and when goals are changing, he says.

5 Adoption of the BetterWorks platform at Edmunds.com has been broad and deep. There are more than 400 goals in the enterprise goals management solution and the vast majority of them are linked: 248 Activated Users 1,075 Active Goals 4.3 Average Goals per User 607 Completed goals 37 VIPs 22 Goal Masters At least a couple hundred people are regularly engaged in BetterWorks, explains Potloff. We have good success three-to-four levels under the COO. Executives at Edmunds.com have also purposely decoupled performance management and compensation from OKRs and goal setting. They use the BetterWorks platform as a gauge to understand how close the company is to achieving overall goals, not to track individual performance. Potloff believes the decoupling encourages employees to score honestly, and stretch goals average in the 6-7 point range per goal as a result. Carrying over or refactoring a goal in subsequent quarters isn t considered a sin. Benefits In addition to helping Edmunds.com stay true to the OKRs process, the BetterWorks platform has delivered the following benefits to the company: Greater visibility into business goals and achievements Before BetterWorks, Edmunds.com had little to no active management of its goal-setting process. It had what Potloff characterizes as goal setting and goal reckoning processes. BetterWorks is an infinite improvement over what we had, says Potloff. Companies have to understand that you can t achieve goals if you don t manage them. BetterWorks helps our employees focus their thinking on company goals, rather than individual performance.

6 Among the success Potloff would like to see is an 80% or higher rating across the organization of employees understanding Edmunds.com s most important priorities and achieving them. He believes goals improve that visibility. Better work pacing for teams and improved resource management for leaders Potloff has noticed BetterWorks is contributing to a better level of pacing for the organization for the work being done holistically across the organization and within teams. Edmunds.com executives now have confidence in BetterWorks and their internal teams to put stretch goals into the system. BetterWorks is also helping to improve Edmunds.com resourcing by delivering an effective goal-setting tool and a complete support system including training that helps teams define better goals and resource accordingly. Working closely with the BetterWorks customer success team, Edmunds.com staff members are even becoming Goal Masters, trained employees with unique skills to support goal management internally. More realistic commitment levels with higher levels of accountability across the organization Because it is very easy to overcommit and always want to do more, teams lose focus. In BetterWorks, Edmunds.com employees set and manage stretch goals, and they report back which prevents them from getting pulled into a newer, possibly more exciting project. Yet Potloff says those newer projects aren t forgotten because they can be put into the goals platform and saved as OKRs for another quarter. According to Potloff, BetterWorks puts current goals in stone, helping us finish what we said we d finish. And the tool becomes a staging area for what is coming. It helps us focus on what we re doing. Near-term planning is captured globally and we can also plan for the future. Looking ahead Potloff would like to explore gamification. One of the most appealing aspects of the BetterWorks platform is that it is purpose-built for goals. The interface makes it simple to set company priorities, then manage and measure against them. Philip Potloff, COO & CIO, Edmunds.com Recent employee survey results revealed that people want recognition without performance management. I think BetterWorks can be a source and/or a platform for the recognition of achievements, concludes Potloff.

7 About BetterWorks BetterWorks began with the simple, but deeply held goal of helping people feel like they are winning at work. Our enterprise goals platform, based on Goal Science thinking, engages, empowers and cross-functionally aligns workers. BetterWorks drives high performing companies to become operationally excellent, and provide powerful insights about how work gets done.