Wondering if your company is OKR ready?
Set OKRs like Google- Here’s your go-to guide for Goal setting!
We all have heard a lot about objectives and goals in our organizations but what’s the hype about OKRs? What are they? Do they work? If you have similar questions in your mind as your organization is on the verge of growing, you’ve landed at the right blogpost. In this blog, you’ll learn everything you need to know about OKRs, some OKR tactics, and best practices for leaders to leverage the best of objectives and key results.
As companies evolve, they face many challenges. Keeping the teams aligned towards achieving a common goal is one of them. Every department or team is set to perform a unique bucket of tasks, and the results are not always supposed to emerge in alignment with one another. This is where OKRs come to play, by keeping organizations stay aligned by connecting the company’s team and individual objectives to achieve a measurable result.
Where and How did OKRs come to the public domain?
The term OKRs stands for Objectives and Key Results and was first coined by Peter Drucker in 1954 when he invented Management by Objectives. The term OKR was later recognized at Intel Corporation by Andy Grove. OKRs have evolved from other management methods and have been applied across businesses ranging from early-stage startups to global enterprises. However, OKRs gained attention when Google started using them in the late 1990s. The explosive success of OKRs surged simultaneously with the success of Google. For a fast-moving company like Google, OKRs are essential. Some objectives last years, while others change every quarter. This way, The use of OKRs expanded across Silicon Valley, and various other industries started OKR practice as well for a better alignment of both individuals and teams. OKRs are great to help prevent businesses from drifting away from the objectives by chasing a shiny object in the way. It’s the OKR platform that helps organizations develop a culture of combined purpose by leveraging the prominent benefits.
The Anatomy of OKRs that helps in greater conversion:
As the name suggests, OKRs have two components: Objectives and Key Results. Thus, OKRs revolve around two basic questions.
Objectives: Where do I want to go?
The objective is the goal of the company. Objectives are usually qualitative and examine what an organization is trying to achieve within the given time frame.
Key Results: How will I get there?
The key results are the measurable outcome that if achieved, will indicate that the objective is accomplished.
For setting Key Results, companies prefer following the rule of thumb- establishing three key results for each objective.
The framework of OKRs is followed by each level of the organization in the said direction, which creates a cascading interplay of objectives to keep the group of people aligned.
In order to get an effective result, the practical application of this basic structure of the OKR platform is a must. A metrics-driven OKR structure tracks the progress of the company’s objectives and helps in easy goal attainment.
How to Create a Converting Goal Setting Strategy?
If Industry Stalwarts are to be believed, then A successful goal-setting strategy is the one that has Ambitious, Aligned, transparent and Measurable OKRs- All at once
Ambitious: OKRs must be Ambitious and Inspiring but practical enough to be achieved. Not only this, A successful OKR is the one that is written precisely and motivates employees to excel by doing more than what they’ve anticipated. Your goals must be ambitious but realistic, hard to reach but not impossible. As per Google’s Ten things we know to be true, We set ourselves goals we know we can’t reach yet because we know that by stretching to meet Them, we can get further than we expect.
Measurable OKRs: For Creating the OKRs that succeed. It’s important to write them, considering that they are measurable. The Key Results (KRs) should be quantifiable on the basis of percentage. Ex- 0 to 100% or 0 to 10.
Employees at Google use a scale of 0 to 1.0 to measure each key result. When the KR reaches the scale of 1.0, the objective is said to be fully achieved. Long story short- Your OKRs should be measurable in order to be achieved easily.
Transparent: OKRs that are viewable across the organization from CEO down to the Intern are more likely to get achieved within the given time frame. Once the game plan of the company is defined, transparent OKRs give room to teams to link up and coordinate in accordance. Connecting objectives bring meaning to work, deepens the ownership sense, and sparks engagement.
Thoroughly Aligned: OKRs work best when they are thoroughly aligned in accordance with the company’s objectives. OKRs should define goals both individually and on the basis of the department. This way, the KRs will get bound and connected both vertically and horizontally. Now, for keeping the OKRs in sync, it is important to get everyone on board. This is exactly what John Doerr did when introducing OKRs to Google in 1999. Keeping the OKRs aligned helped everyone to get adapted to the method as quickly as possible.
How do effective OKRs benefit your organization?
• Keep your organization aligned: Objectives and key results must be designed in a way to keep everyone on the same page to move the organization in a straightforward direction. OKRs connect individual performance and team performance in alignment with the shared organizational objectives so that everyone focuses on what matters.
• Bring transparency: As mentioned before, OKRs inform everyone of the priorities of teams and individuals across the organization. This brings a transparent approach among employees and fosters organizational culture.
• Employees Focus on what matters the most: When everyone in the organization is clear about their goals and priorities, they focus on what matters the most. The OKR Software recommends 3-5 objectives for each level of an organization and helps employees prioritize those objectives that will have a more significant impact on the company.
• Brings in More Creativity: Creativity comes clubbed with effective implementation of the OKR structure. Even Harvard Business Review believes the companies that give room to workplace creativity outperform their counterparts in revenue growth and market share. Such companies are 50% more likely to emerge as market leaders. OKRs increase visibility, thus giving everyone the context they need to make the best decision.
How to Set Effective OKRs?
In order to set OKRs that actually pay off, you need to set objectives followed by the key results for each objective.
First things come first. Setting an objective that tells you where to go is the first step in order to form an OKR structure. Aiming for three objectives per team for each quarter is what is recommended so that you do not spread yourself too thin.
• Each level in an organization, be it company, team, or any department) should have Three to Five Objectives per quarter.
• There must be a realistic percentage that considers the objective as ‘achieved.’ For example: At Google, management considers success when 70% of the objective is completed, and remarkable performance is achieved at 100%.
• Objectives must have a defined endpoint instead of being vague. For example: ‘Get 50 leads through paid campaigns in a quarter’ rather than ‘Get more and more leads through online channels.’
Set Key Results for objectives:
Key Results tell you how you will achieve the set objectives. Thus, as said before, key results must be measurable and quantifiable on the basis of percentage. Ex- 0 to 100% or 0 to 10.
• To keep the balance, three key results per objective are considered as suitable.
• Key results must be numerical in terms of being easily achievable. For example: ‘Find 15 social media platforms for content distribution’ rather than ‘hunt for content distribution platforms.’
• Key results must signify the completion of objectives. If you complete all your KRs for one objective, the goal will be marked as accomplished.
Goal Setting like a PRO!
Now that you know the ins and outs of the OKR setting, it’s time to get the game plan ready for your company. JOP is here to offer help. For more proven OKR structure strategies, get in touch with us and schedule your Demo today.