Everything you always wanted to know about OKRs but were afraid to ask
Drive growth and achieve organizational goals using OKRs methodology.
The search for management methodologies and tools seems to be endless. In the eternal quest to strengthen the operation and scale the business, it is essential to look for a solid management model that can be easily applied within the organization.
Since the 1950s, companies have been applying a variety of management techniques designed to improve employee performance. Peter Drucker introduced Management by Objectives, a process in which managers and employees agree on the objectives and what they must do to achieve them. Thirty years later, in the 1980s, the acronyms S.M.A.R.T. and KPI’s began to make their way into business management. It was in 1970 when Andy Grove, former CEO of Intel, invented the OKRs methodology for evaluating the progress of a strategy; but it wasn’t until late 1990s that this method was boosted and brought to Google by John Doerr as the key central management tool for measuring objectives and key results. So we could attribute to the big-tech the introduction of this revolutionary work methodology that it has not ceased to apply and to which all companies want to incorporate.
This working method drives organizational alignment through the achievement of common objectives and has become a fundamental system for all members of the company to head in the same direction.
Now that we are clear about the context, let’s define the term.
What is an OKR?
The definition of “OKRs” is “Objectives and Key Results.” It is a collaborative goal-setting tool used by teams and individuals to set challenging, ambitious goals with measurable results. OKRs are how you track progress, create alignment, and encourage engagement around measurable goals.
OKRs work the same for setting goals throughout many company levels. They can also work for personal goals and can even be used by individuals to get things done at places where senior leadership doesn’t use them.
An Objective is simply what is to be achieved. By definition, objectives are significant, concrete, qualitative, action-oriented, and (ideally) inspirational. When properly designed and defined, they avoid vague and unclear task execution.
Objectives present a fair and precise direction of what the company intends to achieve.
Each objective can be formulated not only to clarify what is to be pursued, but also to keep everyone engaged on the same issue.
…but they still depend on one thing to be fulfilled: key results.
Without this part of the planning, it would be very difficult to achieve the initially proposed objectives.
Key results are a quantitative definition of the expected results which serve as a parameter to determine how close the company is to reaching an objective.
In other words, they are minor goals that directly help in the conquest of the main goal.
How to structure the OKR methodology in 6 steps
Despite knowing that the OKR methodology is very practical and straightforward, it is not enough to think about objectives, key results and believe that the strategy is ready to be implemented.
It is necessary to follow a series of important steps, which guarantee the proper functioning of the methodology and facilitate its adoption among all the company’s collaborators.
See what these steps are and why they make such a difference in the overall process:
1. Define clear and specific goals
There is no room for unnecessary complications in the methodology. Define clear and specific goals, both for the main and strategic objectives as well as for the key results. This will leave all employees aligned and motivated to achieve what was established.
2. Involve everyone in the creation of the OKRs
An important point of OKRs is that objectives should not be set solely by leaders and managers.
The idea behind it is to involve everyone in the creation of the goals and to ensure that everyone’s opinion is useful and heard during the process.
3. Set relatively short deadlines
OKRs goals cannot be too long, as this hinders the process and undermines its efficiency.
This will help maintain a sense of urgency, at a pace that is sufficient for everyone to do their job and for the tactics to take effect; and to stay strategically aligned in the face of changes of approach.
4. Follow up on the results on an ongoing basis
Monitoring the results must be constant, both in terms of the shortest deadlines and to ensure the consistency of the work.
The aim is to be as non-invasive as possible and to create a smooth and comfortable tracking system for the teams.
Evaluating the results obtained on a weekly basis is a good way to make quick adjustments, but do not overload the professionals involved with the pressure of analyzing data on a daily basis.
5. Leave OKRs visible and available for every stakeholder involved
Transparency is the starting point of a successful OKR strategy.
If everyone share their agreed objectives and aspirations, there is no better way to do this than to make everyone aware of the results.
The goal should not be to pressure employees to achieve results faster but to keep them informed and ensure that the process is clear to everyone.
6. Do not misunderstand efforts with results
The effort may be maximum, but what needs to be analyzed are the results.
If everyone is working hard and the results are not coming, it is likely that they are doing something wrong.
That is why it is so important to focus on metrics, and not just on the feeling of togetherness and collective effort as a way of quantifying everyone’s dedication.
If you can’t measure it, you can’t manage it— Peter Drucker
It is clear that measuring results is the central point in the OKR methodology.
The fact is that tracking metrics and analyzing data does not mean abandoning the human side of the organization.
On the contrary, acting based on data makes it possible to make fairer decisions and create a more pleasant and collaborative environment.
The OKRs methodology is meant to help with a better consensus and collaboration among team members on how to move forward to achieve the strategic goals set by the company.
From IBM, we consider it necessary, if not mandatory, to accompany the client in the adoption of this framework, and even more so when it comes to innovation projects (with the additional complexity of its measurement).
The better you understand your goals and how to get there the more effective and precise your objectives will be — and same with your outcomes.
For summing up this quick overview on OKRs, I would like to share with you one of the most complete playbooks on which are the best practices for adopting this methodology.