The ultimate framework to implement OKR in your organization
An unconventional and educational guide for mastering the implementation of OKRs
Strategic alignment has become an issue for many companies in recent years, especially for start-ups and scale-ups. People are increasingly looking for meaning at work. They are also more willing to leave their job if it is no longer aligned with their values, or if it is no longer a source of fulfillment.
This study from Gallup illustrated by Statista shows that today, employees in the US are more likely to be actively disengaged AND at the same time we also see a decrease in employee engagement since 2020.
According to Morin & Cherré in their paper entitled “Les cadres face au sens du travail” (1999), it’s up to the company to guide their employees in self-realization by helping them find meaning in their work and the missions they perform. The OKR is a framework that ensures strategic alignment at all levels of the organization and between all stakeholders.
OKR stands for Objective Key Results
Let’s take a step back and look at the definition of OKRs together :
OKR, or Objectives and Key Results, is a management methodology that allows everyone, from one end of the company to the other, to focus their efforts on the same issues, to work on common problems and to move towards a common objective(s).
An objective (O) defines what we want to achieve, it is qualitative and ambitious. The objective is :
- Significant
- Concrete
- Action-oriented
A Key Result (KR) is the way to measure that the objective has been achieved, it is numerical/binary. Key results are :
- Specific
- Time-bound
- Challenging but realistic
- Measurable
- Verifiable
Benefits of OKRs
According to Niven & Lamorte in “Objectives and key results: Driving focus, alignment, and engagement with OKRs.” (2016) OKRs provide numerous benefits for an organization :
- Corporate alignment: OKRs provide a link between the company’s strategy and the concrete actions taken to achieve it.
- Transparency and clarity: OKRs clearly define objectives, responsibilities and expectations for all stakeholders.
- Monitoring and evaluation: OKRs allow for regular monitoring and objective evaluation of performance.
- Adaptation: OKRs enable rapid adaptation to changes in market and strategy.
But also some disadvantages
- Complexity: Implementing OKRs can be complex and take time for employees to adjust.
- Work overload: Implementing and monitoring OKRs can add to the workload of employees and managers
- Risk of demotivation: If OKRs are not achieved, this can discourage employees and demotivate them.
But then, how to implement and materialize these OKRs?
Putting theory into practice
If we consider the first benefit of OKRs, namely “the definition of objectives by team”, one of the main challenges is the respect of planning and validation. In most companies, it is necessary to put in place a retro planning or framework in order to ensure that the deadlines and constraints of each team are respected.
Here is a framework you can easily use in order to implement quarterly OKR in your organization :
The first step in the planning process is to define the company’s overall OKRs: these give the direction to be taken over the quarter and the main strategic priorities. They must then be communicated to the teams so that they can implement them in their respective areas of activity.
Once the communication is done with the team, every team member will participate in the definition of the team OKRs by asking themselves: “How can I contribute to the achievement of the team’s objectives?”
When all the team members have participated in the definition of the Team OKRs, the top management will challenge them and finally validate them.
The perfect mix : top-down & bottom-up approach
This is what we call bidirectional planning: It is a combination of top-down and bottom-up approaches, where Corporate Objectives are defined by the top management and Team Objectives are defined by employees and managers.
This bidirectional planning approach has 3 main interests :
- On the one hand, they allow all managers to present their objectives while better understanding those of the other divisions.
- Secondly, it is a way of making managers aware of their future objectives: they commit to them by presenting them to everyone.
- Finally, it is a good time to identify the interdependencies between the team OKRs.
The interdependencies between the OKRs of teams are the relationships that exist between the different objectives of the different teams within the organization. This means that the achievement of an objective by one team may be necessary to complete the objectives of another team, and vice versa. Interdependencies can be caused by shared resources, common deadlines or linked priorities. It is important to take interdependencies into account when planning OKRs to ensure effective collaboration and strategic alignment between teams.
Example
In a very concrete way, here is an example: the objective of “selling $500,000 of product X over the quarter” by the sales team depends, among other things, on the “launch of product X” by the marketing team, which in turn depends on the “development and release of the same product” by the Tech Product team.
Once the interdependencies have been identified, you can apply a RACI matrix to the OKR process, where you can consider that :
- The team manager is Accountable for the success or failure of the objective
- The team members are Consulted in the definition and Responsible in the realization
- All employees of the company are Informed of the objectives and their achievement
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminating the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
