Setting and achieving goals with OKRs: a guide
Understanding OKRs
What are OKRs?
OKR stands for Objectives and Key Results. This is a powerful goal-setting framework that helps team members align their efforts with the rest of the organization and measure their progress. Initially, OKRs were designed for corporate strategy although they have since been adopted by a wide range of companies including startups and SMBs.
Objectives are what you want to achieve. They are significant, concrete, and action-oriented. Objectives need to align with your company’s strategic direction, but they also should motivate and engage everyone involved.
Key Results are how you measure progress toward your objective. They are specific, time-bound, and measurable, providing a clear indication of success. On average, each objective has 2-5 key results that quantitatively measure the outcome.
Origins of OKRs
OKRs were first introduced by Andy Grove at Intel in the 1970s. Grove, who was then Intel’s CEO, described the OKR approach in his book High Output Management. The methodology gained widespread recognition when John Doerr, a former Intel employee, introduced it to Google in 1999. Since then, OKRs have been adopted by many leading companies, including LinkedIn, Twitter, and Uber.
The simplicity and effectiveness of OKRs lie in their ability to create alignment and engagement around measurable goals. This framework encourages employees at all levels to contribute towards achieving strategic objectives, fostering a culture of accountability and continuous improvement.
OKR: benefits
There are three main aspects where your organization can truly and fully benefit from an effective implementation of OKRs:
- Alignment: OKRs ensure that everyone in the organization is working towards the same goals. It is by clearly defining and communicating objectives and key results that organizations can successfully align efforts across different teams and departments, ensuring that everyone is doing their part.
- Transparency: OKRs are also about transparency: making goals and progress visible to everyone in the organization. This goes a long way to generate a sense of ownership and accountability, as your employees can easily see how their work contributes to the larger picture.
- Focus: OKRs helps companies focus on what truly matters. Indeed, with OKRS, you learn to set a limited number of high-impact objectives. This way, teams can concentrate their efforts on achieving significant results rather than spreading themselves too thin across numerous tasks.
While other goal-setting methodologies and tools like SMART goals (specific, measurable, achievable, relevant, time-bound) and KPIs (key performance indicators) are valuable, OKRs offer distinct advantages. Unlike SMART goals, which are often used at the individual level, OKRs provide a framework that scales across entire organizations.
KPIs, on the other hand, are typically used to track performance metrics without necessarily linking them to broader strategic objectives. They are a most useful tool, but just a tool nonetheless. You need to give it purpose and that is what OKR’s will help you achieve: linking measurable outcomes to strategic goals, ensuring that everyone is moving in the same direction.
Then, there is V2MOM. This one is very similar to OKRs but there is one substantial difference: V2MOM is designed around a top-down philosophy where the executive managers ask themselves the right questions while the OKR process is more collaborative and can be cascaded, but more on that later.
How to establish effective OKRs?
Define clear and measurable Objectives
As pointed out earlier, your objectives should be clear, concise, and inspirational. They should communicate what you want to achieve and why it matters. For example, instead of setting a vague objective like “Improve customer satisfaction,” aim for something more specific and motivating, such as “Delight our customers by significantly improving our support services.”
Alignment is another core tenet of OKR so make sure that your objectives are not contrary to your organization’s strategic goals. Every team’s efforts contribute to the overarching mission and vision of the company.
Keep it simple, avoid setting too many objectives. Focus on a few high-impact goals that will drive significant progress. A good rule of thumb is to set 3-5 objectives per team or individual per quarter.
Make them actionable, objectives should not remain purely inspirational. This means goals should be within the team’s sphere of influence and control. If an objective feels too out of reach or dependent on too many external factors, it will demotivate the team rather than inspire them.
Choose relevant Key Results
The second part of OKR, key results, are worthy of your attention too, so you might want to consider following a few guidelines.
First of all, as we briefly mentioned before, key results should be:
- specific: “reduce average response time to customer inquiries” ;
- time-bound: “for next September” ;
- measurable: “by 40%”.
Key results should focus on the outcomes you want to achieve, not the action you will take to get there. This approach ensures that you are measuring the impact of your efforts rather than just tracking tasks.
Choose key results that are directly relevant to your objectives and have a significant impact on achieving them. Avoid metrics that are easy to measure but do not provide meaningful insights into your progress.
Finally, key results should be ambitious yet achievable. Setting stretch goals can drive higher performance, but they should still be realistic enough that the team believes they can achieve them. If you manage to balance it out, you encourage effort without putting an excessive amount of stress on your teams.
Set an appropriate cadence
In management, adapting cadence to organizational needs is key, but before delving into this topic, you need to be aware that when it comes to cadence, there are three scales to consider:
- Strategic cadence: This involves setting long-term objectives that align with your organization’s strategic goals, typically on an annual basis. These strategic OKRs provide a high-level roadmap for the organization.
- Tactical cadence: Tactical OKRs are set on a quarterly basis and are designed to break down the strategic objectives into manageable, actionable steps. This shorter time frame helps maintain focus and agility, allowing teams to adjust their efforts based on progress and changing circumstances.
- Follow-up: Regular follow-up is crucial to the success of OKRs. This includes weekly check-ins to track progress, identify obstacles, and make necessary adjustments. Regular reviews ensure that teams remain aligned and focused on their objectives.
Different organizations might require different cadences. For instance, a fast-paced tech startup might benefit from monthly OKRs to stay nimble and responsive, while a larger, more established company might find quarterly OKRs sufficient. It’s important to find a rhythm that matches your team’s workflow and industry demands.
Tools and software to manage OKRs
Numerous tools and software solutions are available to help you implement and manage OKRs effectively. These tools provide features such as goal tracking, progress visualization, and collaborative planning:
- Workboard offers real-time tracking, dashboards, and analytics to help teams stay aligned and focused on their objectives.
- Perdoo combines OKR management with performance tracking and insights, making it easy to set and track progress towards your goals.
- BetterWorks provides a comprehensive platform for setting, tracking, and aligning OKRs across the organization.
- Weekdone focuses on simplicity and ease of use, providing a straightforward way to set and track OKRs.
- Quantive (formerly Gtmhub), offers advanced analytics and integrations with other business tools to provide you with deep insights into your progress and performance.
- Microsoft Viva Goals (formerly ally.io), another robust tool that integrates with many other software applications, facilitating seamless OKR tracking and alignment with daily tasks.
Overcoming challenges with OKRs: example
To illustrate the practical application of OKRs and how to overcome common challenges, let’s consider a hypothetical scenario involving a mid-sized tech company which we’ll call “It Techs Too”.
Formulating OKRs
Now, in our fictitious business, upper management has determined that the best course for the organization is to improve product development efficiency. Accordingly, they come up with the following formulation for their Objective: “Accelerate product development to bring innovative solutions to market faster.” Note: while in our example the initiative comes from top ranking executives, it is not always the case. Even though their greenlight is necessary, upper management doesn’t have all the great ideas !
Then, Key Results are debated and agreed on:
- Reduce average product development cycle time by 30%.
- Increase the number of features delivered per quarter by 25%.
- Achieve a 95% on-time delivery rate for product releases.
Identifying challenges and designing solutions
Next, It Techs Too’s upper management analyzes and anticipates what might hinder effective implementation and prepares adequate solutions.
Aligning multiple teams
To maintain alignment, It Techs Too will need to hold a strategic planning session at the beginning of every year to define company-wide OKRs. Each team will then set their own quarterly OKRs accordingly. Regular cross-functional meetings will be held to maintain alignment and address any issues promptly.
Tracking progress
Techs Too will implement Workboard to track and visualize progress in real-time. Weekly check-ins will be conducted with the tool, to allow teams to update their key results and discuss upcoming challenges.
Maintaining focus
It Techs Too will limit the number of objectives to three per quarter so that teams can remain focused on the most impactful goals.
Ensuring engagement and accountability
Transparency is a key component of It Techs Too’s OKR process. OKRs and progress updates will now be visible to the entire organization, because everyone needs to know that everyone can be held accountable. Regular recognition and rewards for achieving key results also help maintain high levels of engagement.
Dealing with unexpected changes
It Techs Too will maintain flexibility in its OKR process to adapt to unexpected changes. For instance, if a major shift in the market occurs or a significant new opportunity arises, the company will hold a mid-quarter review to adjust OKRs accordingly. Agility and responsiveness are key to success here.
Detailed breakdown of OKR implementation
To further elaborate on the practical steps to implement OKRs effectively, let’s see in detail how to go through each stage of the process.
Initial planning and setup
It begins with securing leadership buy-in. Indeed, having top leadership on-board is crucial because they absolutely need to understand the benefits of OKRs and be willing to champion the process. Without this top-down support, the OKR initiative is unlikely to gain the necessary traction within the organization.
Next, focus on training and communication. Conduct training sessions for all employees to help them understand the OKR framework, its purpose, and how to set effective OKRs. Remember: clear communication about the process and expectations is essential for successful adoption.
Following this, the leadership team should do exactly the same with strategic OKRs.
Cascading OKRs
Once strategic OKRs are in place, it’s time to cascade them throughout the organization. Start with departmental OKRs. Each department creates their own OKRs that align with the company’s strategic OKRs. This cascading effect ensures that all departmental goals contribute to the broader objectives, creating a unified direction for the entire organization.
Collaborative goal setting is essential here. Encourage teams to discuss and align their OKRs to avoid conflicts and create synergy. This collaboration fosters a sense of ownership and commitment among team members.
Execution and monitoring
With OKRs set, the next phase is all about execution and monitoring. Regular check-ins are vital. Weekly or bi-weekly check-ins help track progress, identify obstacles, and make necessary adjustments. These meetings should be brief but focused, no need to overdo it, this is just to check that everyone stays on track.
Progress tracking is facilitated by using OKR software. These tools track progress in real-time, and visual dashboards can provide an at-a-glance view of how teams and individuals are progressing towards their key results. This helps a lot when you need to maintain momentum and accountability.
But you will also need to keep your teams engaged and driven so be open to continuous feedback and provide support where needed. Managers should act as coaches, helping their teams overcome challenges and stay focused on their goals.
Reviewing and reflecting
At the end of each quarter, conduct a thorough review of the OKRs. Assess:
- what was achieved ;
- what fell short;
- why it fell short.
The idea here is to identify areas for improvement and help determine new OKRs for the next quarter. Celebrating successes is an important part of this process. Recognizing and celebrating achievements boosts morale and reinforces the value of the OKR process.
Equally important is learning from failures. Analyze why certain key results were not met. Use these insights to improve future execution processes.
Advanced strategies for OKR success
If you are looking to take your OKR process to the next level, here are some advanced strategies.
Integration with performance management
Linking OKRs to performance reviews can be beneficial. While OKRs are not meant to be used as performance reviews, there can be a link. Performance reviews take into account how effectively an individual set and pursued their OKRs, providing a comprehensive view of their contributions. Additionally, incorporating feedback loops within the OKR process can help gather continuous feedback on performance, identifying areas for development and ensuring that employees are on the right track.
Enhancing collaboration and innovation
To enhance collaboration and innovation, consider setting cross-functional OKRs. These OKRs require collaboration across different teams or departments, encouraging a more integrated approach to achieving company-wide goals and fostering innovation through diverse perspectives. Innovation OKRs can also be dedicated to innovative projects. Encourage teams to set objectives that push boundaries and explore out-of-the box thinking as it can drive long-term growth and keep your company ahead of industry trends.
With commitment and the right approach, OKRs can be a game-changer for your organization, driving sustainable growth and success. Implementing OKR won’t be done in an instant, but with these strategies and insights, you are well-equipped to set better goals and results, and build on it. In any case, remember, the key to successful OKRs is continuous learning and adaptation.
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