Building A High-Performance Culture With OKRs
How using OKRs shapes your company culture towards greater Focus, Transparency, and Accountability
When properly introduced and used right, OKR can be a powerful aid in building a high performance culture characterized by focus on results, openness, and great accountability. As with any organizational learning process, nothing ever happens overnight. But with the OKR concept it is possible to change the company’s dynamics in relatively short time, aligning the team and creating focus towards goals and results.
Quick Introduction to OKRs
Objective and Key Results (OKRs) is a well established management concept that orginated at Intel. The merits of OKRs have made the concept increasingly popular at a growing number of companies in recent history including Google, LinkedIn, Dropbox, Go Pro, Oracle, and many more.
The power of the concept lies in its simplicity and flexibility to create alignment around prioritzied goals for the entire organization on the company, team and individual level.
The components are:
- Objectives, which help to answer the question of “Where do we/I want to go?”.
- Key Results, answering the question of “How will we/I know we’re/I’m getting there?”
- qualitative, concise, and descriptive
- ambitious and aspirational
- actionalbe by the individual or team
Key results are:
- measurable and quantifiable
- focus on making the objective achievble
- difficult to achieve, but not impossible
For each level company/team/individual a list of 3–5 objectives are defined. Each objective is supported by a list of 3–4 key results to be achieved. These are the measurable steps towards the larger goal.
The whole purpose of OKRs is to translate the company vision and strategy into a set of goals and building a reference for measuring progress towards their achievement. Evaluating the level of achievement is absolutely important to know how much and how fast one is moving the needle.
There is not one way of implementing and using OKRs. But they are typically defined for every 3 months. Depending how fast things are changing for individual company’s other cadences can make sense in varying contexts. Yet the whole exercise of using OKRs is to come back to them frequently and really use them to guide one’s daily actions. Usually OKRs are reviewed quarterly, monthly or weekly.
While usual perormance goals and KPIs are often kept private within management teams, the point of OKRs is to share them with the entire company, so everyone is able to see what everyone else is focusing on at any moment of time. This makes it possible to connect collective actions and supporting each other through the company, team, and personal level.
Quickly summarized OKRs
- help keeping the vision and goals for everyone at the company
- give clear standards for measuring progress and level of achievement
- helps to understand what you & everyone else is focusing on and why
Effective OKR systems share these commonalities:
- the ability to track results on a quantitative basis
- make it something people look at, every quarter, every week, every day
- they have to be a stretch
For a detailed introduction to OKRs and how to use them you can watch Rick Klau of Google Venture Startup Lab describe the concept as well as how to set and track OKRs in this video.
How OKRs support building a high-performance culture
Pinning it down, OKR is a simple but powerful framework to empower everybody in the organization to make decisions on how to best move the company forward. This becomes more and more important as it’s becoming harder for leaders and managers to perfectly outline a genius 5 year strategy plan, as well as it is also impossible and ineffective for executives to weigh in on every little decision affecting the business. In this light, OKR can be seen as an effective communication framework that supports leaders in empowering their teams and establishing a high-performance culture in three powerful ways:
- Instituting transparency
OKRs really become effective because they are widely shared and meant to be understood by all levels and team members. The act of each and everyone sharing their OKRs visibly with the whole company adds a great deal of transparency and clarity about crticial information on the general direction, priorities, and team as well as indivudial contribution to driving the whole company forward. For team members to work on the right things having access to digestible information about what is going on and important in different parts of the orgnaizaiton is very important. Setting OKRs is powerful in engaging in open communication around what is going on in the business and where teams and individuals are headed.
2. Establishing focus (on results)
The whole reason of setting OKRs is to create purpose, alignment and focus on achieving goals that really move the business forward on all levels. The simple truth why this is important and substantially helps to improve business performance is that the amount and likelihood of achievement is much greater when teams and individuals have a small number of clear goals and actionable ways to achieve measurable targets to get there. Instead of focussing on braod targets for lagging KPIs, the OKR process helps to translate the company’s overall strategy into ambitious but actionable results. It forces individuals and teams not just to think about how much and what they want to achieve but more importantly define the required outcomes to get there. Reviewing one’s OKRs frequently effectively supports to align and focus weekly and daily actions on the desired outcomes.
3. Increasing accountability
The process of setting OKRs works both top-down and bottom-up, which strengthens buy-in and commitment towards achieving set goals. Team members feel driven by the mission of accomplishing their OKRs not by managers. If people are committed towards a goal it is much easier for team members to hold one another accountable on achieving their respective goals. The best accountability is when constructive feedback on tasks and performance is given peer to peer. Sharing OKRs with everyone helps clarify expectations amongst teams and their individual members, on what everybody is trying to achieve and why. So in firms that use OKRs well team members discuss progress frequently making their and other’s OKRs the subject of conversations. Instead of politics and excuses about unwanted or unclear goals the focus shifts to helping each other in achieving each and everybody’s mission.
Using OKRs as a goal setting method supports the build-up of an effective organization in very important ways. Yet leaders and managers certainly know that not one concept or one tool brings the solution to everything. It’s the accompanying mindset and functioning of other organizational systems that also needs to be learned by the organization to make OKRs really effective. Using OKRs correctly however can rally help to unleash and support powerful dynamics in an organization that will significantly increase performance levels.