Have you heard of OKRs? If not, you aren’t alone — in fact, only 29% of US workers are familiar with the concept. However, as more and more businesses go in search of ways to improve their performance, OKRs are growing in relevance and popularity.
OKRs (Objectives and Key Results) are a performance management system that can be used by individuals, teams, or organizations to improve their effectiveness. They are typically established at the beginning of a quarter or fiscal year, and consist of measurable objectives and specific key results that need to be achieved in order to meet those objectives.
There are several components of an effective OKR system, but the most important are setting measurable objectives and tying those objectives to key results. Objectives should be SMART (Specific, Measurable, Achievable, Relevant, and Time-bound), while key results should be quantifiable so that progress can be tracked.
In this article, we will explore the benefits of using OKRs, and look at how you can set up your own system. We’ll be covering:
- What are OKRs?
- How OKRs work
- OKRs in the business setting
- Key benefits that come with using OKRs
- How to set up your own OKRs
- Common pitfalls of using OKRs
Ready to learn more? Let’s get started!
What are OKRs?
OKRs, or Objectives and Key Results, is a concept that was first coined by John Doerr. It’s an entire methodology, one that is often used for setting measurable goals and tracking progress in businesses. The key to using OKRs effectively is to make sure that they are specific, measurable, achievable, relevant and time-bound.
When properly implemented, OKRs can help to improve clarity of purpose within an organization, increase focus and help to track progress. They can also help to identify and eliminate wasteful activities, as well as improve communication between managers and employees.
An example of an OKR might be “to increase sales by 20% this quarter”. This would be an objective, while the specific actions that need to be taken in order to achieve that objective (e.g. increasing marketing spending by 25%, hiring two new sales representatives, etc.) would constitute the key results.
OKRs are often used to:
- Clarify the company’s mission and vision
- Help to focus and align the team around a common goal
- Measure progress and track results
- Identify areas of improvement or wastefulness in an organization
How OKRs work
Considering that only 16% of workers believe their company’s goals are clear, it’s no wonder that only a small minority of workers feel their company is doing well at meeting its objectives. This is where OKR (Objectives and Key Results) comes in.
OKRs work by setting measurable goals for individuals and teams, which are then cascaded down through the organization. They provide a framework for employees to understand what is expected of them, how their work ties into the company’s objectives, and what they need to do to achieve these objectives.
The beauty of OKRs is that they can be adapted to any company size and business type. They can be used to track progress towards specific goals or to measure performance against a set of key metrics.
Here’s how OKRs are usually set and implemented:
1. Individual employees set their own objectives, which are aligned with the company’s overall objectives.
2. Objectives are typically SMART: Specific, Measurable, Achievable, Relevant and Time-bound.
3. Key Results are then set for each objective, and these need to be quantifiable.
4. Objectives and Key Results are reviewed and updated on a regular basis, usually every quarter.
OKRs can be used in any company size and business type, but they work particularly well in fast-paced and rapidly growing organizations.
OKRs in the business setting
OKRs have been used by companies such as Google, Intel and Twitter, and they are now becoming increasingly popular in the UK. So, how does this methodology work in a business setting, and why is it proving so successful?
In the business context, setting attainable goals is perhaps one of the most important tasks a leader can do. However, it is also one of the most common failures, as leaders often set goals that are either too difficult or not specific enough. OKRs help to overcome these issues by providing a framework for goal setting which is both measurable and achievable.
OKRs help enormously in the business setting by:
- Clarifying what is important to the organization and its employees
- Focusing energy and resources on key priorities
- Helping to track progress and identify areas of improvement
- Encouraging innovation and creativity
- Motivating employees by setting challenging yet achievable goals
- Facilitating better communication between managers and employees
- Encouraging team work and collaboration
- Helping to assess employee performance
- Providing a framework for setting long-term strategic goals as well as shorter-term operational goals
- Supporting continuous learning and improvement
The beauty of OKRs is that they can be adapted to suit any organization, regardless of size or industry. They are not a ‘one size fits all’ solution, but rather a flexible framework which can be tailored to meet the specific needs of each individual business.
Key benefits that come with using OKRs
As one of the most popular goal-setting frameworks, OKRs (Objectives and Key Results) offer several key benefits for organizations looking to improve their performance.
1. Alignment and focus
When setting company goals, it can be difficult to ensure that everyone is on the same page and that individual departmental goals are aligned with the overall vision of the company. OKRs help to solve this problem by providing a common framework for goal setting and requiring all goals to be aligned with top-level objectives.
When everyone in the company is aligned, they are working towards the same objectives, and resources are not being wasted on conflicting goals.
2. Transparency and accountability
Another key benefit of using OKRs is improved transparency and accountability. By requiring goals to be measurable and trackable, OKRs make it easy to track progress towards objectives and hold individuals and teams accountable for their results.
This increased transparency also helps to identify areas of the organization that may be underperforming and need improvement.
One of the main advantages of OKRs is that they are quantifiable, meaning that it is possible to track progress towards objectives and determine whether they have been achieved.
The added measurability makes it easy to identify which goals need more attention and which ones are on track, allowing organizations to focus their efforts on the most important objectives.
OKRs can be scaled up or down to meet the needs of any organization, from small businesses to large enterprises. With scalability, it becomes possible to use OKRs in organizations of all sizes and helps ensure that everyone is working towards common objectives.
OKRs are also highly flexible, meaning that they can be adapted to meet the unique needs of each organization. Organizations can tailor OKRs to their own specific culture and goals, ensuring that they are getting the most out of this goal-setting framework.
By implementing OKRs in your organization, you can achieve better outcomes and improve your performance.
How to set up your own OKRs
Sold on the benefits and ready to set up your own OKRs? You’ve come to the right place. Let’s run through the basics of how to set up your own OKRs.
1. Define what you want to achieve.
This may seem like a no-brainer, but it’s important to be specific when defining your goals. What do you actually want to achieve? Spell it out in measurable terms that you can track and report on.
To do this, you can ask yourself questions such as:
- What do I want to achieve this quarter/year?
- What are my top priorities?
- What can I realistically achieve?
- How will I know when I’ve achieved my goal?
- Is this goal aligned with our company’s goals and strategy?
2. Set a timeframe for your goal.
Without a timeframe, it can be difficult to measure whether you’ve achieved your goal. It’s important to set a deadline for yourself and make sure it’s realistic.
Some examples of realistic timeframes might be:
- A goal to increase website traffic by 25% in the next three months.
- A goal to reduce customer complaints by 50% in six months.
- A goal to increase sales by 10% in the next quarter.
Obviously, the timeframe you choose will depend on the goal itself as well as your business’s unique situation.
3. Make your goal SMART.
This acronym stands for Specific, Measurable, Achievable, Relevant and Time-bound. And it’s a great way to make sure your goals are well-defined and achievable.
When making your goal SMART, ask yourself the following questions:
- Specific — What exactly do you want to achieve?
- Measurable — How will you know when you’ve achieved your goal?
- Achievable — Is this goal realistic and achievable?
- Relevant — Is this goal relevant to your business or personal goals?
- Time-bound — When do you want to achieve this goal by?
4. Create a goal tracking template.
Now that you’ve defined your goal, it’s time to track it! This can be done by creating a simple goal tracking template. The template should include:
Your goal — Clearly state the specific goal you’re aiming to achieve.
Progress tracking — How are you tracking your progress towards the goal?
Measuring criteria — How will you know when you’ve achieved your goal?
Date achieved — When did you achieve your goal?
Comments — Any other notes or insights about the goal.
5. Set a goal review frequency.
How often do you want to review your goals? This will depend on the goal itself and how quickly you want to achieve it. However, we recommend setting a goal review frequency of at least once a month.
This way, you can track your progress, make any necessary adjustments, and ensure you’re on track to achieve your goal.
6. Share your goals with others.
When sharing your goals, be sure to include everyone who needs to know — from your boss to your team members. This will help keep everyone aligned and motivated as you work towards achieving your goal.
7. Celebrate your achievements!
Once you’ve achieved your goal, be sure to celebrate your success! This will help keep everyone motivated and inspired to achieve even more in the future.
Now that you know how to set up your own OKRs, it’s time to get started! Just follow the steps above, and you’ll be well on your way to achieving your goals.
Common pitfalls of using OKRs
So, there you have it — setting your own objectives and key results (OKRs) really is that simple. However, as with anything else in life, there are a few potential pitfalls you need to be aware of before getting started.
1. Lack of clarity or specificity: One common problem with OKRs is that they can be too vague and lack specificity, making it difficult to track progress and determine whether objectives have been met.
2. Setting goals that are too lofty or unrealistic: Another common pitfall is setting goals that are simply not achievable. This can lead to frustration and a lack of engagement when objectives aren’t reached.
3. Focusing on the wrong metrics: A third issue that can crop up when using OKRs is that people can become too focused on the wrong metrics. For instance, if someone’s objective is to increase revenue by 25%, they may start focusing exclusively on increasing sales figures, even if there are other ways of achieving this goal that would be more beneficial in the long run.
4. Lack of ownership or accountability: Finally, one of the biggest dangers of using OKRs is that they can lead to a lack of ownership or accountability if not implemented correctly. If people are simply working towards meeting their objectives and key results without any sense of personal responsibility, the goals may not be met.
To avoid these common pitfalls, it’s important to take the time to create clear and specific objectives, set realistic goals, and focus on the right metrics. And most importantly, make sure everyone involved in setting and meeting OKRs is aware of their responsibilities and held accountable for their actions.
Final thoughts on OKRs
Hopefully this article has provided you with a greater understanding of OKRs and how they can be used to achieve optimal outcomes. There is no one perfect way to set up your OKRs, but following the tips in this article should give you a good starting point.
Remember: keep your goals SMART and constantly revise them as needed in order to ensure that they are still relevant and achievable. And, most importantly, don’t be afraid to experiment with different methods until you find one that works best for you and your team!