OKRs help define specific goals for each role and come together to form the big picture of the overall desired target. This helps create a sense of community effort, and common goals are a great way to get people to work together.
When your people know what they are working towards, they tend to be more engaged. They have set targets that allow them to take accountability for their actions. Most of all, this level of transparency creates an atmosphere of trust. This fosters better relationships within your team and between your team and the leadership.
What makes a good OKR?
A good OKR must be focused on tangible and meaningful improvement. The objectives should be clear, meaningful and inspiring. The key results are specific, realistic, measurable, verifiable, and time-bound. The strategy must highlight priorities so that individuals can tackle them first. This ensures that there is focus on the significant areas of concern and that they get resolved first.
OKR metrics should be used to measure individual contributions. Your targets will help you define how well your results stack up against desired results.
The most important aspect an OKR brings is that it has transparent goals. There is no ambiguity about what needs to be done, why, and how to achieve it. This creates a culture where every contributor knows their role towards these goals precisely.
How to create great OKRs company-wide
OKRs are most effective when they impact every individual and, as a result, get the whole organization to move in the right direction. This means that you have to create OKRs that affect the entire organization.
Here is how you do that:
- Define organization-wide OKRs
- Break it down into team-specific OKRs
- Communicate OKRs to all teams and individuals
Smart teams usually come up with great OKRs. However, they often fail on the implementation. Here are some reasons why OKRs may not be working for you:
1. Not everyone sees the point
It isn’t possible to have a successful OKR strategy if every person in your company isn’t on board. That goes for every member of the upper brass as well. If you haven’t used OKRs before, you have to understand that you are asking for some major changes to be carried out. This can often be met with resistance.
Make sure you help everyone understand how OKRs will benefit them on an individual level and as a contributor to the goals of the company.
As a first step, make sure you are clear on what OKRs are and how they will benefit you. Then, take the time to explain that in the utmost detail to your team.
Show your team the success that others have had implementing OKRs. Be open to questions and create an atmosphere that allows employees to ask as many questions as possible.
When we read about OKRs, industry leaders talk about setting impossible goals and then maybe hopefully doing something great along the way, even if we end up failing to achieve the set goal. That kind of unrealistic goal-setting can cause severe demotivation. They won’t feel like powering through if they can’t at least get close to their targets.
Be aggressive, yes, but stay within the realms of what is achievable. Get your team to give you input on how objectives are set, the more involved they are, the more ownership they will take. The same goes for an overly ambitious strategy that attempts to cover all the bases at once. OKRs are about prioritizing what is important first. Don’t set too many OKRs. It dissolves the impact.
3. Setting easy goals
Sometimes leaders don’t take the time and effort to understand the full capabilities of their team. Or it could be that leadership doesn’t want to see their plan fail. In these scenarios, what often happens is that the bars are set too low.
Setting goals that are too easy to achieve defeats the purpose of OKRs, and you can’t expect any of your team to believe that there is any benefit at the end of the exercise.
4. A lack of clarity
OKRs are meant to be ultra-specific. If you can’t narrow them down and make them very specific, they will have no impact. Use a S.M.A.R.T. framework to create OKRs.
5. Misalignment with business goals
While the goal is to improve the company’s objectives, goals have to be set from top-down and the other way round. Push your teams to create their OKRs to contribute to the business.
6. Not reviewing your OKRs regularly
OKRs are generally short term strategies. Review them regularly to see if they have had the desired impact, change them if the desired results aren’t on track.
Company OKRs vs. Team OKRs
There are many ways that information is passed around in a company. When it comes to OKRs, goal cascading doesn’t seem to work. So, how does one create company OKRs that align properly with team OKRs?
Understand what concerns are to be prioritized and addressed, set quarterly objectives to achieve these goals, and be aggressive.
Share these objectives with the rest of the team, understand how they can contribute and explain how their contribution will impact the organization's success.
This is important. Let your teams take the time to figure out how they will contribute. Let them create their internal OKRs that tie into the overall goals and contribute to specific parts of your strategy.
The teams then bring their OKRs to the leadership, and leadership reviews these OKRs ensures they align with the company OKRs and then link them to those OKRs.
Example OKRs from big companies
If you struggle to get your team onboard, these examples will help you out. Some of the biggest names in the world have been successful at implementing OKRs. For example, Google.
One of Google’s investors, John Doerr, brought in the idea of using a system that would allow for tangible results to be measured.
Here is an example of their approach:
The goals are set very aggressively, so aggressively that a score of 80% is considered excellent.
Google emphasises the importance of 60% of the goals being set bottom-up and meshed vertically and horizontally.
Each quarter, specific OKRs are driven. For example, this means being very focused, only setting 4 OKRs per quarter.
Skilled individuals provide their feedback, and OKRs are created based on that feedback and the process and the OKRs are made known to the entire team.
Other examples include:
- LinkedIn: The company's CEO, Jeff Weiner expressed the importance of setting challenging and meaningful OKRs with quarterly goals and regular weekly meetings.
- Intel: With an OKR champion who educates the team, and the practice of CFR (Conversations, Feedback, and Recognition), Intel inculcates a health OKR culture.
- Amazon: OKRs primarily focus on things that don't change which prevents shifting goals, and they are set in cycles - weekly, quarterly and annually, so that no one misses out on the big picture.
Example OKRs by industry
Here are a few examples of the kind of OKRs you can use. Keep in mind that these differ from industry to industry. Remember to have your company’s objectives in clear sight.
- Increase CRM software sales in the Southern region by 35% by creating awareness.
- Generate 150 leads every month.
- Convert 40% of all leads.
- Achieve sales target of US $250,000 by financial year-end.
- Convert 700 out of 1800 free users to the premium trial by offering attractive promotions.
- Decrease churn rate from 17% to 10%.
Customer Service OKRs
- Improve customer satisfaction ratings from 75% to 90% by the end of the quarter.
- Extend content offerings in regional languages, and add two regional languages every quarter.
- Reduce customer complaint resolution time from 7 minutes to 3 minutes by the second quarter.
- Increase candidate pass-through rate from 65% to 80% by simplifying the application process.
- Expand diversity in recruitment by targeting recruitment to tier 2 cities in India.
- Increase Hiring Manager satisfaction rating from 80% to 90% by increasing candidate quality check measures.
- Conduct 30 live user-testing interviews 60 days before product launch.
- Collect 100 user feedback responses within the first 30 days of launch.
- Get 8/10 on UX mockups from 50% of users.
- Ensure API response time is within 350 ms before testing phase two.
- Decrease data breach errors from 4 to 0 before launch.
- Decrease New User signup process time from 7 minutes to 3 minutes.
- Increase quarter-on-quarter revenue from $7 million to $8.8 million by the second quarter.
- Increase average monthly subscriptions from $18 to $23 by the end of the financial year.
- Increase gross margins by driving down the cost of production from 33% to 39% by the next quarter.
- Reduce the number of accounts payable from 8% to 3% by financial year-end.
- Reduce audit adjustments from 2.3% to 1% by the second quarter.
- Conduct compliance audit every quarter.
- Increase the number of local data centers from 8 to 12 in the next two years.
- Reduce data backup time from 4 hours to 50 minutes.
- Increase the number of security breach training sessions per annum from 2 to 6.
How to manage OKRs
Now let’s get down to the implementation aspect of it. You know how to create OKRs. Let’s understand how you ensure they are managed well and implemented successfully. Here are a few fundamental principles you should adhere to achieve your goals and objectives.
1. Ensure that your objective is consistent
This doesn’t mean that you don’t have to revisit them or tweak them to achieve your goal; rather, you shouldn’t have to adjust them too frequently.
2. Focus on key results, not key deliverables
Ensure your focus is on getting the results, not how you get the results. So, to be clear, your key results should reflect the goal, not the means of achieving those goals.
3. Keep learning
Your OKRs should help you identify what went right and what went wrong. Once you learn what is going right, you can choose to do more of that. So your goal is to ensure that your learnings contribute to how stable your OKRs become.
Don’t expect everything to be fine and dandy once you set your OKRs. Check with every team and find out how they are doing and working towards the OKRs. Understand if they believe they are on track. Remember, the key here is to check. You shouldn’t be micromanaging every OKR.
5. Celebrate success
Celebrate each stepping stone towards achieving your objective. Be loud and show your team that you are happy with their progress. Let your team congratulate themselves, and don’t hesitate to get other departments involved in the celebrations.
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