OKRs (Objectives and Key Results) are becoming the go-to goal-setting system for many modern companies. In this article, we’ll provide an overview of the components of OKRs and review best-practices. Our objective is to introduce the methodology and for you to gain an understanding of how an OKR execution might look.
In his book, “Measure What Matters,” John Doerr tells us that OKRs (Objectives and Key Results) are a collaborative goal-setting protocol for companies, teams, and individuals; a management methodology to ensure the company focuses their efforts on the same important issues throughout the organization.
A Definition of OKRs
- Simply WHAT is to be achieved
- Significant, concrete and action oriented
- They are a vaccine against fuzzy thinking
Key Results (KRs)
- They benchmark and monitor HOW we get to the objective
- KR should be succinct, specific, and measurable
- KRs typically include hard numbers
As with any Major Corporate Initiative, a Well-defined Plan is Crucial
- First, secure executive endorsement and commitment
- Determine at what level you will introduce the program, executive only, team level, company-wide
- Finalize an implementation plan
OKRs should be translated from your Mission, Vision, and Strategies, the development phase is the perfect time to reinforce these values.
Based on your key strategic initiatives create your first set of Objectives and Key Results. Communicate; once OKRs are determined they need to be communicated throughout the organization. An “all hands” meeting may be the perfect venue to introduce your initial OKRs.
Quantifiable (Use Numbers)
An Objective is a qualitative goal designed to propel the organization in the desired direction. A Key Result is specific, quantifiable, time-bound, aggressive, yet realistic.
Typically, the Objective part of an OKR is expressed in words, not numbers. Key Results delve into the numbers and metrics, much like a KPI (Key Performance Indicator).
Cadence, How Often Should You Set OKRS?
Companies have a great deal of latitude in how they adapt the program to their culture and unique business situations. Frequency in setting OKRs is one of those areas of flexibility.
The default answer for “How Often” is quarterly. We think it is better to set a quarterly OKR, ensure that everyone follows the rhythm of checking in and that about 10% achievement is occurring during each of the 13 weeks.
Limit OKRs to 3-5 Objectives and 1 – 3 KRs
Any more and your people could lose focus or become disengaged. No one should have more than 3-5 objectives per quarter, with 3 Key Results or fewer for each.
Bottom-Up should be 70% of the Process
Goals can be thoroughly cascaded, driven from the top, but with input from below. Giving your people the responsibility to come up with 70% of their OKRs ensures commitment and buy-in.
A recent survey of CEO’s indicated that forty-percent considered connecting their workforce with the company’s strategic initiatives their number one priority.
By connecting, we mean creating sets of OKRs throughout the company that aligns with your highest-level priorities. Further, these OKRs detail the contributions required from teams and individuals throughout the enterprise.
OKRs define who’s doing what, allowing you to monitor progress without micromanaging.
Make both long-term goals and quarterly objectives visible
An OKR Software platform provides visibility to everyone’s OKRs. In that way, everyone knows how his or her current priorities factor into the larger overarching goals of the organization, creating alignment and focus.
The number one, “must do” is frequent Check-Ins. We strongly recommend you conduct weekly Check-Ins with teams and contributors, assessing their progress throughout the quarter.
Scoring OKRs allows you to learn more about your business. Your objective is to learn from the KRs at the end of each quarter and to create better KRs for subsequent quarters.
Keep it Positive
Avoid turning OKRs into a performance review. Not achieving 100% of an OKR should provide learnings, data, and indicators about how to improve the process in subsequent quarters.
This subject matter could fill a book. In fact, it has filled several books; we mentioned Doerr’s, “Measure What Matters,” another excellent reference is “Objectives and Key Results” by Paul Niven and Ben Lamorte.
We hope this thirty-thousand-foot overview has been helpful. Future “Best-Practices” articles will delve into each of the major areas in greater detail.
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!