Story of Objectives and Key Results (OKR) Implementation — Part 1
This is a story of our attempt to implement OKR at Lapis. This stage where we are defining the OKR for Q1 — 2021. This blog is a reflection of our process and experience so far.
First things first — let's talk about what Objectives and Key Results (OKR) are. For those who are not familiar with the framework, OKR is a management tool for defining and executing significant business goals.
Objective
An Objective (O) is simply what is to be achieved. An objective is significant, concrete, action-oriented, and (ideally) inspirational. When properly designed and deployed, they are a vaccine against fuzzy thinking — and fuzzy execution (1).
Key Result
KEY RESULTS (KR) benchmark and monitor HOW we get to the objective. Effective KRs are specific and time-bound, aggressive yet realistic. Most of all, they are measurable and verifiable. It’s not a key result unless it has a number. You either meet a key result’s requirements or you don’t; there is no grey area, no room for doubt (1).
Initiative
Some people add another dimension to the OKR called initiatives. These are the steps and actions that one takes to achieve key results in order to complete the Objective.
How does OKR differ from a traditional annual goals process? The key differences are:
- OKRs are usually set for, and measured every quarter. This enables a more agile approach of inspecting and adapting if things do not go according to the plan.OKRs are usually reviewed every 4–6 weeks by the team.
- OKRs are not tied to compensation. This enables the team to set the OKRs that are aggressive and inspirational. This means that even if the OKRs are not achieved 100% — significant progress (70% above) will result in substantial improvement and gains.
Lapis OKR Implementation
Adopting OKRs is a change — It requires a change management process. At Lapis, we started with an introduction to OKR. In the same meeting, we tried to set some OKRs for the upcoming financial year Q1 — (BIG MISTAKE). Never mix the introduction to the concept with implementation. OKR is a change and it needs to be handled as a change process. No matter where your organization is in terms of the goals process — OKRs will be a change to that process.
In addition, OKRs demand a sharp focus and commitment. This means that the existing processes and goals will have to be changed or transitioned to OKRs. Defining Objectives that are important and related Key Results that are measurable is a challenge. Lapis team faced the same challenge. What Objective to keep and what to drop. What will be the level of commitment we can afford in addition to the normal activities of running the business?
So, we took a step back and did some analysis. We reviewed our current goals and processes. We did a budget estimation of what we can afford in terms of Research and Development and Personal Development and what we will need to grow the company. This analysis provided us with a clear pathway to set Objectives in the following categories
- Research and Development
- Personal Development
- Business Growth
- Operational Excellence
We created 4 Ojectives and developed Key Results in each of the categories for Q1. We defined OKRs on the following basis
- What is important
- What we can afford (budget), and
- What we can substantially achieve (practical).
Here is our initial version of OKRs for Q1 — 2021. The diagram below includes Objectives, Key Results, and Initiatives.
I will keep this series updated as we move to the implementation phase. I hope that this experience will provide some insights to those who are planning to use OKRs. If you have experience with OKRs I would love to hear your thoughts.
- Doerr, John. Measure What Matters (p. 7). Penguin Books Ltd. Kindle Edition.
