Objectives & Key Result Method
The objective in OKR can be easily agreed, but how to determine the right Key results?
OKR is a business management solution, bringing businesses on the right track by establishing and tracking comprehensive goals for all personnel and departments. This 4.0 administration model has been successfully applied in the world’s largest companies (Google, Intel, Amazon, …)
When you start with OKR, you will quickly see that setting priorities for goals is as difficult as expressing and structuring them. That is why it should not be rushed to push the OKR administration process in the next stage. If your team is about to apply it in a quarter, make sure everything is ready.
Once you have carefully selected the Objectives, it’s time to create Key Results. A key outcome includes the following elements: Index, Starting value, Target value, and Title.
Index
Index is a way to “measure and measure” Key results. Common indicators that measure product and customer success include: Net Promoter Score (NPS) and Monthly Active User (MAU). In contrast, factories and manufacturers use performance indicators.
But these indicators are a struggle for some teams. Some teams simply lack motivation, some have never measured these indicators before to serve the Key Results. Therefore, it is important that you can track the necessary data before adding to the Key Results. If you are too busy and cannot prioritize measuring these indicators, in return you will not be able to see the progress of the work.
Starting value and Target value
The definition of these two values is not difficult to understand. Starting value is a measure of the key outcome at the beginning of the quarter or year. The target value is an index of the Key Result achieved when that time period ends.
It will be very difficult if you define a target value without a pre-standard value. In that case, you can use the data of the first two weeks of the quarter as a standard. Although there is a risk that the data in those weeks is not large enough, it does not prevent you from targeting the target value.
Name (Title)
You can assume that, based on the scale and the above indicators, there is all the necessary information. However, in order for OKR to fully realize its benefits such as increased linkage and internal transparency, OKR must be easy to understand and not ambiguous. That’s why the Key Results name is an indispensable part. The name of the Key Results will reflect directly and clearly the goals to be achieved.
For example, you can name a Key Result as “Double NPS Increase” — where NPS is an index, the starting value is 20 and the target value is 40. You can also name the Key Result in the form of “Increasing NPS from 20 to 40”, this depends on the personal view of the employee.
There are 2 errors should be avoided when determining Key Result. You think that placing the Key Results out of reach will motivate all work to achieve the goal. This sounds obvious, but it is not always doable.
The key result is the core factor that makes the practical effectiveness of the OKR model compared to other targeting methods such as SMART. Therefore, it needs to be accurately determined based on important rules.
Never say “at least” or “right on”
Most people understand, Key results should be a bit “tricky”. If you leave the title with phrases like “at least” or “right on”, people will understand that you are expecting “at least to achieve that value.” When setting a goal is a minimum, that is, you not only create a challenge for yourself, but also create a risk for your team to go down.
The value of “at least” is not really challenging, we can assume the case to reach the goal before the end of the quarter, then what? The result has already reached 100% So you expect everyone to continue; It is unlikely to happen. The idea behind OKR’s 70% Rule is that you can achieve 70% of the goal, and 100% is the utopian number. The word “at least” should never comes out of the title of the Key Results.
Never say “below this” or “the maximum is”
Sounds simple, isn’t it? For Canal Circle, let’s say the case is “There are less than 4 clients cancelled to use our applications in this quarter” or “There is a maximum of 10% of people who are unfollowing our weekly newsletter.”
Imagine the case as follows. For the purpose of contract cancellation, at the beginning of the quarter you always get 100%. You just lost one to three of the total clients during the quarter until now, so it can still be considered 100% of the target. From that perspective, people will think that they are doing a good job. And when the last week of the quarter ended, the fourth customer canceled the contract. So, the whole objective dropped to 0%. This is bad, and it will be worse if you don’t know how to correct this situation. You need to avoid that situation at any cost.
Source: https://7geese.com/okr-objectives-and-key-results-faqs/
Derrick Nguyen
Marketing Analyst
