What is OKR?
OKR stands for Objectives and Key Results. OKR is a collaborative goal-setting framework used by many organizations, departments, teams, and individuals to set ambitious and strategically outlined goals that drive results and can easily be measured or tracked on a regular cadence. Every company needs OKR consulting to create a framework to bridge the gap between strategy and execution – connecting everyday work to the organization’s long-term strategic objectives, aligning across teams on different levels, fostering engagement within those teams, and tracking the overall progress of the goals over time.
An Objective is the ‘what’ part of a goal. However, it is imperative to note that these objectives have to be challenging, ambitious, and inspire as many people as possible. As John Doerr puts it, “They represent the ‘North Star’ which guides with its light every team member in the same, bright direction.” The dangers of having bland, ambiguous goals that lead to weak and uninspired executions can be avoided if OKR consulting is integrated into the strategic planning, execution, and retrospective phases of the OKR cycle.
On the other hand, Key Results measure progress on the path to the desired objective. They are the ‘how’ which indicates you have successfully arrived at your intended destination or end state. Key Results are not a list of tasks or inputs you must complete, but you must measure to know your inputs have been successful. You will know that your Key Results will be significant when outlined clearly, are time-bound, and ambitious without being irrational. Above all, you must measure and check the validity of the results achieved over time. There is no middle-ground when it comes to a Key Result, it is either you attain the Key Result requirement at the end of a specific period or quarter, or you don’t. You also are not expected to – key results should represent your ideal end state; this cannot always be the reality. But, this is what makes OKR inspirational, and this what encourages overall progress.
The OKR Cycle
The OKR framework is utilized by many leading companies in the world, including Amazon, Netflix, Google, Adobe, and many high-growth start-ups.
To implement an OKR framework in your organization, it is pertinent that you have a solid understanding of the OKR cycle. We break this cycle down into three parts: Strategic Planning, Execution, and Retrospective.
If your company wanted to implement OKR, it would first have to clearly define where it wants to be a year from now, the crucial achievements it wants to attain, and the specific direction it wants to take. All of this would need to be coordinated between the company’s executive team to set specific objectives and communicate the necessity for executing OKRs to their teams. Top-level clarity is the primary goal of the Executive Alignment Meeting in the ‘Strategic Planning’ phase of the OKR cycle.
After this step has been established and the annual top-level objectives are clear, you need to break them down into 2-3 quarterly organization-wide objectives, which will cascade down to contributing objectives set at the department, team, and eventually individual level. Incremental goal-setting empowers organizations to see success in longer-term strategic goals and empowers individuals with clarity in their work.
A tip for increasing engagement across teams is to inspire them with these goals rather than presenting numbers and metrics. The truth is setting goals takes a toll on most people, and your team can quickly get disillusioned with the process when they are either not carried along or too entrenched in the numbers games that the stakes become too high. Brainstorm with them, let come up with brilliant ideas for objectives and then compare it with your framework of goals to see which ones align the most so that you can choose.
After this, you will need to layout the Key Results that, once achieved, signify progress towards the desired goals. Doing so will help you and your team understand whether the company is moving in the right direction or not. These key results must be ambitious because they will contribute towards overall success.
An Example of OKR Implementation
Imagine you are the CEO of a and 12 departments with any number of teams distributed across the United States. Here are your top-level objectives for the quarter:
The Key Results to achieve this goal can only be reached if you answer the question:
How will I know my company is on the right path to achieve this strategic objective?
To know you have arrived at your destination, you must set specific, measurable results that signify the successful progress towards an objective. These are the outputs that represent you are a successful company, not the list of inputs that you need to finish to get there.
Consider the first Top-Level Objective and corresponding Key Results:
O1: Grow revenue to invest in future technology and establish a firm financial foundation:
KR1: $4 million in revenue from new accounts
KR2: 95% retention of current accounts
KR3: Three new, high-impact feature releases
This clear outline will help you know how much progress you are making, the deadlines you have imposed, and the landmarks you need to make to realize your key results. Further, it provides top-down visibility to plan their work according to the top-level objectives and see their individual impact on the companies’ broader mission.
For example, the Marketing department will set a contributing Objective(s):
CO1: Enable growth through marketing excellence
Marketing Key Results:
KR1: 2 million new LinkedIn impressions
KR2: Increase web-page view time
KR3: Receive 3 mention from national news outlets
While these might seem obtuse or overly ambitious, it is necessary to keep in mind that this is just a framework you can follow to create your own goals. Your team must also know the specific steps they need to take to achieve these key results.
An individual in the Marketing department may have the following contributing OKR:
CO1: Improve performance of YouTube channel
KR1: 10,000 total video shares to LinkedIn
KR2: 15% click-through rate to the website
See how these OKRs contribute to the level above while providing more specific direction for departments, teams, and individuals to go down?
The steps above provide a brief overview of the Strategic Planning phase of the OKR cycle. Goal setting and executing are nuanced processes that take a lot of deliberation, learning, and guidance to execute. If you need to navigate through the challenges of clearly establishing objectives, your best move would be to employ an OKR consultant like People Stretch. People Stretch specializes in OKR consulting to recognize clear goals and measurable key results that will guide your company in an aligned direction towards their desired objective. From goal setting to execution, People Stretch will guide you and your team step by step as you avoid the common pitfalls associated with unclear objectives and work towards promoting your company’s overall growth.