Setting the right Corporate Objectives just might be the difference between success and failure in your organization. When getting started with the OKR methodology, many companies have difficulty in identifying those right Objectives. In this article, we will review the OKR Best Practices for setting and monitoring top corporate objectives.
Asking the Right Questions Leads to the Right Objectives
The questions senior leadership needs to ask when setting the company’s overarching goals are:
- Where do we want to go?
- How do we want to get there?
- How will we know if we made it?
To ensure these initial OKRs are taking you in the right direction, we suggest you start by reviewing your Mission, Vision, and Strategic Pillars. Are your initial goals consistent with your Mission and corporate values? Will they take you towards your Vision of the future? And do they adhere to and compliment your Strategic Pillars? Do these initial OKRs address the most important things you can be doing to move your organization in the desired direction for the next three, six, twelve months?
Best Practices to Set Effective OKRs (Objective & Key Results)
Once the team has identified your top initiatives, it’s essential to develop the right Objectives and supporting Key Results. Let’s review the process for stating OKRs:
Objectives (Os), answer What is to be accomplished. Objectives should be significant, action-oriented, qualitative, and indicate the direction for the company.
Key Results (KRs), finish the statement; We want to accomplish the Objective “as Measured by” the Key Result. KRs measure HOW we get to the Objective. Key Results are quantitative, typically include numbers, and should follow the SMART approach, Specific, Measurable, Attainable, Relevant, and Time-Bound. When setting KRs think of KPIs.
Best-in-class companies set no more than three to five OKRs per quarter, any more and you risk losing focus on what matters most. These three to five OKRs are each supported by no more than three Key Results. Excessive Key Results begin to resemble a list of tasks versus desired outcomes.
OKRs are meant to be ambitious. All OKRs should be significant, requiring outcomes greater than business as usual, to challenge and inspire the organization. We suggest you follow Google’s lead and deploy a combination of Aspirational goals (moonshots) and Committed goals, with Committed requiring the organization stretch as well.
Communicate Your Corporate Objectives and then Align
A two-year Deloitte study found that no single factor has more impact on corporate performance than “clearly defined goals that are written down and shared freely. Goals create alignment, clarity, and job satisfaction.” To initiate an OKR implementation, we recommend you communicate your top corporate objectives broadly throughout the organization. An all-hands meeting may be the perfect venue.
When communicating these initial OKRs to your people, we think you should explain the “why” as well as the “what.” Why are you adopting OKRs? Why now? What business issue will they address? Creating alignment is an excellent reason for utilizing the OKR methodology, and OKRs excel at alignment.
Another best practice in execution is to cascade OKRs heavily downward through your organization to create this alignment. This ensures everyone’s OKRs support your overarching corporate objectives. Here is where OKRs deviate from MBOs and KPIs; once you have cascaded OKRs to the executive staff and department heads, we recommend you have your teams contribute in a bottom-up goal-setting process. This not only taps into the collective experience and expertise of team members, it also ensures a higher level of commitment to goal attainment and employee engagement.
Track and Monitor Top Corporate Objectives for Continuous Improvement
Perhaps the most critical best practice in OKRs is the communication enabled by regularly scheduled Check-Ins to update progress towards Key Results. These brief Check-Ins provide input as to progress, are we on target to achieve our goals or is the KR “at risk.” If performance is lagging why so? What roadblocks or impediments is the team or individual contributor encountering? What can be done to remove these obstacles to bring performance back in line? Check-Ins provide this feedback and enable real-time course corrections.
Examples of Effective Top-Company Objectives
- Grow Recurring Global Revenues
- Increase Market Share
- Delight Our Customers
- Develop a Corporate Culture of Achievement
- Be First to Market with New Products
- Increase Earnings per Share & Profitability
- Dominate our Category
We hope these few examples and best practice steps are helpful to you. If you need help with additional examples or further best practices, please feel free to reach out to us.
Are you a CEO responsible for strategy? Do you set strategy, goals, and track performance? 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!