2 Reasons Why OKR Goal Setting is Better than any Other Approach

There are many approaches to setting enterprise goals, but few have the power of OKR (Objectives and Key Results). OKRs are built upon two incredibly effective goal setting methods, S.M.A.R.T. goals and MBO, but they are tailored to meet the needs of today’s fast-growing businesses and fast-paced work environments. They also center goal setting, measuring, and tracking around the thing that matters most for your business: results.

The Ultimate OKR Checklist [Most Downloaded PDF]

What is it specifically that makes OKRs far more effective than any other approach to goal setting? There are two factors:

1. Cascading Alignment

Consider your most important business priorities. Maybe your goals are to grow revenue or build your customer base. These are the most essential goals that you as an executive are aiming for, but when everyone in the organization has a list of priorities that don’t match yours, your goals can seem out of reach.

OKRs solve this problem through cascading alignment. Here’s how it works:

  • Review Company Goals Prior to the start of the quarter, executives will collaborate to discuss the fundamental company objectives. A maximum of 3-5 quarterly Objectives will be determined.
  • Cascade Down After the executives’ Objectives have been determined, they will cascade down to department, team, and individual contributor levels. That way, each person or group of people will be doing work through the entire duration of the quarter that supports the company’s overarching goals.
  • Collaborate Goals aren’t just established by managers and executives; rather, employees and their bosses collaborate to determine Objectives together.
  • Encourage Some Bottoms-Up Objectives To create buy-in and commitment among employees, encourage them to set some of their own Objectives. While these should still be discussed with (and approved by) managers, it gives employees an opportunity to play an active role in the goal setting process; and thus the process of supporting company Objectives. This drives engagement, performance, and ultimately, your results.

Download the Ultimate List of OKR Goal Examples

2. Smaller Steps

The Key Results portion of OKRs is what makes them so effective, because they break down Objectives into smaller steps. They are also clearly defined, making it easier for employees and their managers to track progress.

To maximize effectiveness, each smaller step or “KR” should also be:

    • Specific Always use specific language when structuring both your Key Results and Objectives. For instance, to say that you want to “grow the business” isn’t specific enough. In order to know what must be accomplished and execute your OKRs with precision, you need language that is clear and concise.
    • Measurable OKRs should always be “as measured by” something. For instance, if your Objective is: Complete X of PR Projects in Q2 to improve brand awareness, you’re a Key Result might be to Complete X amount of PR Projects by the end of April. From there, you can break Key Results down into tactics and tasks – find out more about that here.
    • Aligned We discussed above how OKRs naturally encourage cascading goals. Double check to make sure that all Objectives are aligned with company level goals, and if you need to readjust them as you go along, feel free to do so.
    • Relevant What’s most important to your company right now? Are the Objectives you determined the most important priorities to be handled at this point in time? Is now the right time, or are there other action items that should be taking priority instead?
    • Time-Based Always assign a deadline to every Key Result. Determine what can be done in six weeks, what can be done in a month, a week, and a day. This will help you achieve larger Objectives – this breaking down action is what makes OKRs so powerful.

Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!

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