CEOs realize that failure to align their organizations, and the lack of employee engagement, are two of the most significant challenges to executing their strategies. So, what is the best goal setting approach? What system is most effective for setting corporate objectives? In this article, we’ll address these questions for you. In his 2018 New York Times best-seller, John Doerr, tells us to “Measure What Matters.” Read on to learn how to “Improve What Matters Most.”
OKRs (Objectives & Key Results)
Many organizations are continuing to struggle with execution. They are learning the limitations of annualized MBOs (Management by Objectives) and KPIs (Key Performance Indicators). While other highly successful organizations, such as Google, Intel, and LinkedIn have progressed to a more modern, more collaborative goal setting methodology, OKRs (Objectives and Key Results).
OKRs is a discipline to align everyone at your company, focus everyone’s effort on what truly matters, and make progress measurable to help you achieve your top corporate objectives. They work for virtually any organization, regardless of industry, size, or life-stage of the company.
OKRs represent an evolution of MBOs and S.M.A.R.T. goals. They are the next-generation goal setting and monitoring system. Two key differences between OKRs and their predecessors are alignment and cadence. In an OKR implementation Objectives are cascaded down through the organization, yet individuals contribute to the development of their objectives and key results, the one caveat being that individual objectives must always be aligned to, and in support of the top corporate priorities. And, OKRs follow a different, more frequent goal setting cadence, typically quarterly goals, with regularly scheduled check-ins to monitor progress. Cadence makes the organization more agile and able to respond in real-time to any obstacles to goal achievement.
OKRs the More Effective Goal Setting Approach
When executing the OKR methodology, the first question to be answered by senior leadership is, “what are the most important things we can do as an organization for the next three, six, twelve months?” We recommend you limit this to no more than three to five Objectives. Bear in mind, these Objectives will determine the direction, focus, the work to be done, and the resources to be applied for the upcoming period. And, we recommend a blend of committed, more incremental type Objectives, combined with one or more highly aspirational Objectives, a moonshot if you will, to motivate the workforce.
Once these top corporate Objectives are determined they are communicated broadly throughout the organization. A key feature of OKR Software is that Objectives are transparent to the entire company, all the way up to the CEO’s Objectives. Consider the benefits, as Deloitte tells us from their studies, “no single factor has more impact on corporate performance than clearly defined goals that are written down and shared freely.”
This visibility, coupled with cascading Objectives, drives alignment and identifies areas for collaboration while motivating the workforce. We also know that when individuals contribute to developing their OKRs, they are more committed to their accomplishment and motivated to succeed.
7 Benefits of OKRs When Setting Your Corporate Objectives
- Clear and Accurate Communication: they inform everyone about what is truly important
- Focus and Commitment to the key priorities
- Alignment & Cross-Functional Collaboration: to align everyone at your company
- Aspirational Goals produce a higher level of output
- An engaged, motivated workforce is far more productive
- A more agile organization that addresses obstacles in real-time
- OKRs foster a culture of achievement
We hope this article has helped to inspire you to consider OKRs as the goal setting approach for your corporate objectives. 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!