In this article, we’ll explain how savvy CEOs are driving better results against top corporate goals by using the modern-day goal setting methodology, OKRs (Objectives & Key Results). An American Management Association study shows that sustained top-line growth and consistent execution of strategy are the top concerns of CEOs across businesses of all sizes. We’re pretty sure improved employee engagement ranks high on that list of concerns as well considering a Harvard Business Review shows that 95% of employees don’t fully understand the company’s goals or exactly what’s expected of them. Read on to learn how gaining alignment throughout the organization, and the transparency of OKRs are generating better results towards top corporate goals at high-performing companies.
First things first, Identifying the Top Corporate Goals
Setting your initial top corporate goals/Objectives can be daunting, some best practices employed in a successful OKR implementation include:
- Turn to your Mission, Vision Statement, and Strategy for inspiration.
- Limit top company-wide objectives to no more than three to five initiatives, with one to three Key Results per Objective. Remember, these few, initial OKRs will determine the focus and priorities for the entire organization.
- Communicate both the “why” and the “what” throughout the workforce. Why you are adopting OKRs, what organizational problem will they solve, and what do you want to accomplish. Many successful executions start with an all-hands meeting.
- Use a blend of Aspirational goals (moonshots) and Committed goals (those of a more incremental improvement nature).
- Establish your OKR cadence, we suggest quarterly.
Cascading Alignment to Create Focus and Commitment on Top Corporate Goals
OKRs is a discipline to align everyone at your company, to focus everyone’s effort on what truly matters, and to make progress measurable to help you achieve your top corporate objectives.
Companies gain alignment by cascading Objectives thoroughly through departments, teams, and individual contributors. The very best in class companies also accommodate bottom-up contributions to OKRs, that is, having the individual contributor assist in setting their Objectives and Key Results. Individual goals must always align with and contribute to the achievement of company-wide objectives. This personal input virtually assures a higher degree of commitment to the attainment of the Objective.
The transparency enabled by OKR Software helps to identify areas where there are cross-dependencies which will require collaboration and teamwork. Silos and duplication of effort become non-issues.
Another feature of OKR Software which contributes to improved execution is 360° visibility of Objectives and performance to Key Results. This visibility allows everyone to see everyone’s Objectives and progress all the way up to the CEO. 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.”
Monitoring and Grading OKRs for Continuous Improvement
So, our successful companies have determined their primary company-wide Objectives, they’ve communicated them freely, and aligned them throughout the organization. What next?
Here is where the methodology and successful companies separate themselves. The one thing they must do is to conduct regularly scheduled Check-Ins, perhaps as frequently as weekly, and team meetings, perhaps mid-quarter. The number one topic in these meetings is performance towards quarterly Key Results. Contributors provide feedback as to the level of achievement and identify any roadblocks or obstacles to meeting their goals. This process allows management to identify “at risk” Objectives and to take appropriate action or take measures to eliminate roadblocks in real-time.
The final step is to grade performance against Key Results. Given the rapid cadence, quarterly, this provides immediate learnings to inform future OKRs, making the entire enterprise more agile while enabling continuous quarter to quarter improvement. And, continuous improvement leads to better results against your top corporate goals.
We hope this article has illustrated how using OKRs can deliver better execution of your strategic initiatives and top corporate goals.
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!