All companies have goals. Small. Large. Start-ups. Businesses that are centuries old… whatever type of business you have – they make up an integral part of any successful business performance management.
Not only do they maintain focus, but they can open up team and individual creativities as you work out how you’ll reach them, they help to prioritise tasks and give perspective, and they help you to use your time in the most effective way.
However, how do you apply this ‘goal-setting mindset’ organisation-wide?
What are OKRs?
OKRs is a goal setting methodology that helps set business goals and ensure everyone is working collaboratively towards the same goal.
OKR stands for Objectives and Key Results, with multi-national corporations like Twitter, Dropbox, Google being well-known users. Despite their global size – they still manage to set goals across the organisation, using this simple, yet effective method.
An objective: this is where you are going – nothing more, nothing less. Concrete, and action-orientated, and should be written to inspire and motivate.
Key results: this is how you get there. These are how you benchmark your progress and must be both measurable and verifiable. These will be measured after a period of time to ensure that progress is being made.
Driven by data (but not always), OKRs are developed by setting challenging goals, but with measurable results. These measurements allow for goalposts to be set, progress to be tracked and goal alignment across a team of people.
They are the creation of Andy Grove from Intel, and the methods were taught to him by John Doerr, who has written the book entitled Measure what Matters, which explains everything you need to know about these not-so-secret goal-setting hacks.
Examples of OKRs
Here is an example of an OKR that could be set for the HR team:
Objective* – To select an Operation Manager to oversee operations at a new warehouse opening in May
Key results*
- Receive at least 50 applicants for the role by end of January
- Shortlist 10 applicants for interview by end of February
- Choose the successful applicant by the end of March
- List of relevant training to then be passed onto team for training
*Note: Neither key results nor objectives should be tied to monetary incentives – these can give individuals an incentive to play it safe. Not good for growth or development.
The training team OKR then might look a little like this:
Objective – Train the new Operations Manager
Key Results
- Book new Manager onto all relevant training courses available once selected.
- Send dates to new OM, ensuring they are booked into his or her diary
- Send information about training to all relevant teams and Manager
Why are OKRs effective?
It’s a good question to be asking. Why are they so effective? On paper, the framework could easily be dismissed as just another goal-setting technique with slightly different branding.
This is not the case, however. OKRs are the implementation of a mindset – and, according to Doerr encompass four ‘superpowers,’ which separates their effectiveness from the rest. These are:
Focus – having a common goal allows the perfect opportunity to prioritise and – even better – to say no to jobs that aren’t in line with the collaborative goal. When setting key results, companies are advised to stick to just 3-5 to maintain focus.
Alignment – OKRs can be implemented organisation-wide and aren’t just used as a tool reserved for the high-level, strategic teams. Setting OKRs from the bottom-up is a great way to create a sense of autonomy and reward, and means it is more likely for employees to see it through. And, when carried out effectively, these OKRs will work together in harmony, just like the HR and training team example above.
Accountability – Having clear deadlines creates both a level of urgency, and neither room for misinterpretation or subjectivity. If key results aren’t being ticked off, regular check-ins will ensure that this is picked up, and individuals or teams are steered back on course again.
Growth – OKRs are great for development: for an individual, a team, and an organisation. OKRs should be a challenge, and not easy to obtain. In fact, Google famously only set out to achieve 60-70% of their goals, saying if you reach 100% – you’re playing it safe!
They’re not just for data analysts…
Remember, OKRs are not just for data analysts. You don’t have to be a database Wizz to set OKRs. All you need is something to measure by, and this doesn’t always need to associate with a numerical value either.
For example, you could set an objective to create a more welcoming environment for customers. One of your final key results could be to ‘choose plants to go in the shop window by April 10.’ This is certainly not something that requires data, nor a number – and is simply an action to achieving the final objective.
Personal OKRs
You should also remember that OKRs are not just for teams and companies. Although they help us to achieve goals collaboratively – they can be great for personal goals too. Although rigorous, they are a great way to ensure you reach your own full potential.
For example, here’s an example of a personal goal.
Objective: To allow more time for reading
Key results
- Make a schedule for the week ahead, ensuring there is at least X number of evenings with X amount of time to read.
- Swap activities where possible I.e. swap Netflix for reading books.
- Make sure there are no distractions – put phone in another room.
- Have a book-lined to read once finished this one.
OKR or KPI?
How do OKRs differ from KPIs? They may seem similar, but they’re actually very different but often work well together.
OKR helps create measurable goals for the business.
KPI helps you measure the performance of a business process. Simple key metric you use to evaluate performance, progress over ongoing activities or processes.
And… finally, they aren’t necessary for every task
Lastly, don’t let OKRs encompass all your work. Not every job requires an OKR. For example, responding to your emails each day is a general daily activity, but you wouldn’t necessarily set yourself a target to reply to all your emails. OKRs are great – when applied to the right setting.
It’s always exciting to hear of innovative tools that you can use to help stay on track and focused. OKRs are relatively easy to implement, measurable can be applied across an organisation, and – if the multi-national corporations are anything to go by – they are an excellent method for goal-setting across organisations.