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The OKR Methodology — Setting Actionable Goals for 2021

2021 is less than a month away and I bet you’re already thinking of your New Year’s resolutions. From professional growth goals to personal resolutions, most people fail to accomplish their goals. The reason this happens is because they write a list of wishes only a genie could grant (“make a fortune to prove aunt Gina wrong”) instead of a plan with actionable steps (“increase recurring revenue by 25%”).

If you want to discard wishful thinking altogether and make significant progress towards your goals, use the Objectives and Key Results (OKR) methodology both in your professional and personal life. Here’s a breakdown of it:

OKR Methodology 101

The OKR system, short for “Objectives and Key Results”, is a high-commitment productivity framework that focuses on metrics. Objectives (O) are defined in terms of measurable and actionable key results (KRs) that can be set monthly, quarterly, or yearly.

Think of the objective as your vision or mission, not as a complex task you just need to get done. Your key results are measurable outcomes, again, not something you achieve by just putting in the hours and the effort. So what then can you do? There are the initiatives (tasks) a.k.a. actionable steps towards positive outcomes (KRs) which will eventually lead you to your objective. In a nutshell:

The OKR framework tells you where you want to get to (Objective), how you can get there (Key Results), and what you can do (Initiatives) to reach your destination.

Here are two OKR examples:

Team objective vs Individual objective

As you can see, the OKR framework is not a to-do list because neither the objective nor the key results can be achieved by simply getting to work. KRs such as “raising employee awareness” or “publishing quality articles” entail metrics and variables. So then, what do we mean by “quality” and “what constitutes great content in 2021?” These are great questions to ask which will prompt the team to come up with subsequent initiatives.

How to set OKRs

When coming up with your OKRs, there are a few rules of thumb:

1. Don’t use OKRs as performance indicators, but as professional growth goals. Like Google, aim for a 60–70% completion score.

Wait, does that mean that you shouldn’t achieve your OKRs? As counter-intuitive as it seems, it’s actually extremely beneficial. A 60–70% success rate allows your team to set OKRs tailored for professional growth and innovation. Since it’s okay to fail, they might as well try something innovative or challenging. This way, they will “stretch” themselves cognitively, intellectually, and creatively — stepping outside of their comfort zone — but not too intense that they snap. Beware though:

  • If the completion rate is >70% it means that the OKRs were chosen too lightly — a task too easy, too boring, too light, too safe. What are the chances of having a team of overachievers aiming for 99% completion?
  • If the completion rate is <60% it means that the OKRs were overly-ambitious — a task too difficult, too complex, too nerve-racking. Chances are the tasks at hand were so daunting that they led your team to mental paralysis and perhaps burnout.

NOTE: Think of OKRs as a means to “mental stretching” — anything that involves stepping outside of your comfort zone, thinking outside the box, or exposing yourself to outlandish ideas.

2. Don’t incentivize OKRs. Be it money, rewards, perks, or awards, the moment you incentivize employee OKR completion score, that’s when your team turns OKRs into a to-do list with safe tasks and easily-achievable objectives. On one hand, this will give you the illusion that deep work is being done (while that might not always be the case). On the other hand, this will also give you a crippling anxiety that everyone else is doing such a great job while you’re here — an imposter who’s failing at it and who should stop trying altogether.

Employees should be compensated for the daily work they do, for their responsibilities. As romantic as it may sound though, empathy, camaraderie, and a sense of purpose are the wheels behind engagement and innovation. Work needs to be meaningful, solve real problems that challenge the status-quo, and fun at the same time to be a tangible motivator in its true sense.

3. Don’t over complicate OKRs. If you’re new to creating goals, it’s best to keep it simple and focused. Start by establishing one at a time while making sure they align with your (company) vision or mission. Still, you should establish KRs that are outside of your comfort zone, so that they reflect the professional growth goals you’ve been meaning to tackle but constantly postponed. Challenge yourself with KRs that are exciting to envision even if you have just a rough idea how to go about it.

4. You don’t need specialized knowledge to do OKRs. Not everyone is good with statistical data, but this shouldn’t deter individuals from setting OKRs. Make your goals as simple as you can, as long as they are measurable and actionable. You don’t have to design a sophisticated XY scatter chart if you don’t understand how that works. Make a line chart instead. Or even better, use intuitive charts to keep track of your progress, such as a waffle chart (that even sounds like fun).

For example, if your KR is to gain 1,000 new blog subscribers by the end of the quarter, then your first Initiative (strategy) might be to produce a newsletter. Finish the initiative, then track the progress using a waffle chart for every 100 new subscribers. Goals you measure by metrics or statistics are called “quantitative”.

5. You don’t necessarily need numbers to do OKRs. “Measurable” does not necessarily mean numbers. You can measure a metric using “success/fail” or “yes/no”. For instance, “Hire new copywriter” is a KR that can still be measured — at the end of the quarter, you either did it or you didn’t. In addition, you can evaluate whether the new hire was a good pick. Goals you measure through observation — and whose quality you analyze — are called “qualitative”.

Why the OKR methodology works

There are a ton of productivity methods, strategies and systems out there, so choosing one is not a matter of variety but of suitability.

What makes the OKR methodology better than most and does it cater to my needs and expectations? Here are three core components to help you decide:

It is a tested method. Objectives and results first came to the spotlight in 1954 when Peter Drucker published Management by Objectives. A decade later, the then-CEO of Intel, Andrew Grove, adapted and refined Drucker’s methodology into the OKR framework used today. During his time at Intel, John Doerr learned the OKR methodology and introduced it to Google’s two founders, Larry Page and Sergey Brin. That is when OKRs started to gain traction. OKR is a tested methodology and the success of giants like Google, Amazon, Microsoft, Intel, Spotify, Netflix (among many) is a good testament of that.

It measures performance. It’s not about finishing another day at work, surviving another quarter, or struggling to go through a list of tasks that will somehow magically bring profit and growth. By employing any kind of objectives and key results, you will be able to review them and track your performance. Even if you fail at them (and it’s okay to fail), you will learn something invaluable, adjust your strategy, and keep trying. You need a trial-and-error mentality for the OKR to work in the long run.

It encourages employee autonomy. By allowing your team to decide on their individual OKRs, you will see increased engagement and personal responsibility due to the sense of ownership and purpose. They will be more likely to see their OKRs through since they chose them themselves. Of course, establishing individual OKRs should be done collaboratively with their managers or superiors. There should be consensus and excitement for the OKR.

NOTE: You and your team can manage all your initiatives and projects in Paymo, a project management platform for all the tools you need to achieve your OKRs.

Best OKR practices to learn from companies

“Vision is a destination — a fixed point to which we focus all effort. Strategy is a route — an adaptable path to get us where we want to go.” — Simon Sinek

The best theory is that which is put to practice. Here are some insights on how major companies successfully employ OKRs:

1. GitLab: Value ownership

When you establish OKRs as a team, everyone…

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