A way of setting goals used and made famous by high achieving companies.
Organizations of every size and representing every industry are always looking for ways to improve & drive performance. OKR tools are a widely accepted practice to set organizational, departmental and individual goals to plan where you want to go.
What are OKRs?
“OKRs'' simply mean “Objectives and Key Results”. The Objective is the aspirational goal whereas the Key Results are the important metrics that help you measure progress and the target metric you are aiming for within the period the OKRs are active (typically quarterly or annual).
History
OKRs original concept came from Intel and spread to other Silicon Valley companies. Google adopted OKR in 1999, during its first year. Since then it has grown in popularity as a framework for helping teams and organizations clarify their goals and ensure everyone is working towards them in a measurable way.
- John Doerr, Measure what matters
Why you should use OKRs?
If you are operating in a complex environment where it is challenging to keep your team or organization working on. Are you seeking to foster a structured goal setting process? OKRs are the solution. They enable you to get focused and direct your team towards achieving and measuring your goals.
Team Alignment
To be able to structure the team’s needs and give them a direction towards a common goal.
Increase Productivity
Work on the efficiency of individual members of the team to enhance overall productivity.
Achieve Measurement
Keep a track of progress and ensure that setbacks are overcome.
Goal Focused
Enabling teams to work towards the final goal with the same intention and focus.
OKR Example
Sales
Customer Success
Marketing
HR
Finance
OKR vs KPI
A KPI (Key performance indicator) is basically a metric which helps determine progress. The OKR framework adds more structure around just these metrics. The Objective is the aspirational goal to inspire and show people the art of the possible. The Key Results are a series of metrics (or KPIs) which will help you measure the progress needed to achieve that Objective.
How the OKR process works
The OKR framework is designed to accelerate and enhance the functioning of a team. The overall process is aimed at improving the team’s performance and helping you conquer challenges. The key activities are:
Set long term and mid term objectives and key results:
This is often first established by leaders of teams or organizations in collaboration with their teams.
Cascade OKRs to sub-team:
Sub-teams should get together to discuss the higher level OKRs and which they are going to be contributing towards then agree on specific OKRs for the sub-team. OKRs work more effectively top down. They can still be used by sub-teams first (in a bottom-up approach) however work would be required to engage all the stakeholders and leaders to agree with them.
Check-in:
Check-ins are simply a review of the OKRs by the group/individual delivering them. The idea is to check that the OKRs are still relevant and to update the score or progress tracking. If there are challenges these should be discussed and then shared with dependent teams/individuals. Open, honest conversations are key.
OKR retrospective:
After the period is closed it is important to have a retrospective look at the objectives and how successful you were at delivering on them. This will help when setting out the next periods’ OKRs.
How to set OKRs?
We believe in making things simple for you. Just like a friend, we shall support through the process of setting up OKRs in a comprehensive yet understandable manner. They should be simple, specific, and measurable.
Here are some tips for setting Objectives:
• Objectives answer the question. I.e. Where do you want to go? What do you want to achieve?
• Be ambitious and exciting. Push the limits.
• Objectives should revolve around key factors like customer, performance, revenue, cost, growth, engagement, etc.
• Aim for 3-5 Objectives for a time period.
• Objectives can be set for the quarter, year or multi-year. If they are year or multi-year then you will likely keep the O the same in each quarter but tweak the KRs as you progress towards the O each quarter.
Here are some tips for setting Key Results:
• Key Results answer the question. i.e. How will you measure the progress? How will you know you are getting closer to the goal?
• Key Results are quantitative, measurable and difficult (but not impossible).
• A Key Result should consist of a KPI along with the target you are going to aim for within the time period.
• Aim for 3-5 Key Results per Objective.
How to track OKRs
At the check-in you should assign a score out between 0 and 1 or use a % benchmark for KR. If you are using an OKR tool like Witsmate then you should update any comments about current status so others have more context about the score you have given. For Team/organizational OKRs you need to do check-ins as a group so that all contributors agree with the check-in.
Common OKR mistakes
- Stretch Goal OKRs: An additional goal that is undertaken if the initial goal is exceeded.
- Insufficient OKR: When the objectives and results do not represent all the things that are needed to achieve.
- Not Sharing Publicly: OKRs are adopted by companies to solve dependencies. Not sharing OKRs leads to individual divisions functioning towards the illusion of alignment.
- Too Many OKR: Setting unnecessary goals adds pressure and hinders the focus of the team.
