Objectives and Key Results: What are OKRs?
Due to information overload, knowing and tracking Objectives and Key Results (OKRs) in business is essential to decipher what the company’s key performance indicators are trying to tell you. This article will address what OKRs mean, how they better your business, and show you an OKR example to help you establish your own OKRs.
What Superpowers Do OKRs Give My Organization?
A while back, I had a conversation with my father, who is in his seventies and has been retired for over ten years. For the last 20 years of his career, he worked as an HR manager for a global company. Now that he is retired, he reads a lot of newspapers and has recently taken an interest in the phenomenon where younger people seem prone to burnout and other stress-related illnesses.
And talking with him made me realize that the amount of information the current generation of ‘younger people’ are exposed to during their careers – especially compared with my dad’s generation, is much higher.
Due to this information overload, I will address why knowing and tracking Objectives and Key Results (OKRs) is essential to decipher what these key performance indicators tell you. I will address what OKRs mean and how they better your business.
We live in a world that is moving much faster than we can. More information than we could ever consume is accessible on demand 24/7, and the opportunities for us are endless.
As much as this applies to people, it also applies to organizations. Information flows is 24/7, and we have on-demand access and endless choices concerning business opportunities. It can seem like the more complex decision isn’t what you can do – but what can’t you do?
And with so many opportunities available, how do you choose what strategy initiatives to focus on? Each option is better than the previous, and you can easily find yourself accomplishing none if you try to do it all!
For businesses, but also individuals, OKRs are a method that can help you create a framework around your goals that:
- nurture focus
- accountability, and
OKRs can help your organization, its teams, and the individual members reach the stars.
What Are OKRs?
OKR stands for Objectives & Key Results and is a management methodology for setting goals within an organization, although you can also use I for setting personal goals. It differs from other goal-setting methodologies, as OKRs are better equipped to implement changes at a higher pace and in iterative cycles.
OKRs help you focus on the most critical business priorities in shorter time frames and are openly shared, communicated, and measured within the organization. Tracking and analyzing OKRs helps increase transparency, cross-team alignment, and accountability of the Objectives & Key Results.
Outlining OKRs, like Agile methods, have been around for a while. These methods are gradually gaining more use as the need for flexible and adaptable frameworks & methodologies to stay in line with continuous change is required.
The Four Superpowers of Outlining Objective & Key Results (OKRs)
OKRs distinguishes itself from other goal-setting methodologies because they possess four superpowers:
Superpower #1 – Focus & Commit to Priorities
OKRs help you choose what matters most to the organization. Determining what matters most will help you concentrate on the Core Objectives that make the absolute difference.
These Core Objectives are the Objectives that are leveraged at the next level, compared to other Objectives that are still important but need to provide that extra leverage to make a difference.
Superpower #2 – Align & Connect for Teamwork
Transparent OKRs nourish collaboration between teams. When OKRs are out there in the open for everyone to see and to give feedback, critique, or provide corrections on, this creates two essential aspects:
It creates a team of team’s approach to solving problems. When team A is working on something that can benefit team B’s goal, they can reach out to team B and work together on their goal.
Because transparent OKRs are out in the open, it is impossible to be secretive about goals. Secrecy drives fear & shame and nourishes business toxicity that is dangerous for the growth of your business.
Superpower #3 – Track for Accountability
The OKR lifecycle is a living organism. Teams or employees track, score, revise and adapt OKRs in iterative cycles. In that process, they gain vital insights into the progression that they are making, and they continuously assess whether the Objectives are still worth pursuing.
Being part of that process and experiencing the OKR progression helps keep your teams/employees growing, motivated, and engaged in their work. Motivation and engagement are the best sources for increasing accountability within teams and/or employees.
Superpower #4 – Stretching OKRs for Maximum Value
Stretching your OKRs will help create maximum value. An OKR should push against (not over!) boundaries of the impossible, as this will help teams/employees discover they can reach impressive levels.
Pushing for results driven by your Objectives and Key Results (and, in the process, experiencing the results of those outstanding efforts) fuels a team’s innovation and empowerment. These two ingredients are critical to the survival of an organization, and OKRs can help you drive business-critical success factors.
The Approach in a Nutshell
Primarily, OKRs are based on asking yourself two questions:
Where do I want to go?
- THE OBJECTIVE = The What
- These should be aspirational and motivational Objectives that are clear enough to be easily understood and ambitious enough to inspire.
How will I monitor and measure if I am getting there?
- THE KEY RESULT(S) = The How
- These should be concrete, specific measurements of progress toward achieving the Objective.
Creating OKRs for your organization involves converting the Why into the What and the How. Therefore, a good starting point for you to start working with OKRs is:
The WHY: What is the business value of introducing OKRs into your organization? Define the fundamental reason for wanting to adopt OKRs and prepare to be able to explain how OKRs will help improve the organization.
The WHAT: What do you want to achieve/where do you want to go? This answer will result in formulating the Objective.
The HOW: How will you know that you have reached your goal? This answer will formulate the Key Result (s) for each Objective.
Since the added value of OKRs is the short-term and frequent time frame, it is crucial to predefine a timeline for your OKRs. Ideally, this is three months, but it is up to each organization to make this shorter or longer if required.
Especially when you start with OKRs, I suggest you work in 8-week sprints to get into the flow of the OKR process. Because the time frame is so important, I would like to add the following:
The When: In what time frame would you like to achieve your goals?
Finally, there is one last step that I would also include, and that is:
The Initiative: What can I do as an organization employee to help reach the Objective (s)?
It is not up to management to decide what each employee can do. Still, it is an excellent initiative to get your employees involved in the adoption process and challenge them to actively participate and think of how they can contribute to the Objective(s).
How Does This Look in Daily Practice, and How Can I Start?
Great, we are ready to adopt OKRs! Now, what…?
First, Define your Why
Before defining the Objectives and Key Results, please note the difference:
- Objectives are always significant, concrete, action-oriented, and preferably inspirational
- Key Results are always specific & time-bound, aggressive yet realistic, and measurable & verifiable
Create a list of five Objectives maximum based on the organizational strategy, mission, and vision.
Keep in mind the criteria mentioned above; I highly suggest considering if the Objective is inspirational. This priority is the difference from Superpower #1 mentioned above.
For each Objective, define a list of five Key Results, maximum. Remember the criteria mentioned above, make them measurable (by including a number or percentage), set a time frame, and make sure they push against the boundaries as suggested in Superpower #4.
Communicate the OKRs within the entire organization as outlined in Superpower #2. During the lifecycle of the Key Results, continuously track and rate the progress of each Key Result.
At the end of the cycle, grade each Key Result to address how it performed (based on your performance tracking rates) and assess what you would do differently next time. For example:
- A score of 7 or higher is delivered, between 4-6 is the progress made but no completion, and three and below is failing
- Any low-scoring Key Results (under 7) let you know that you need to reassess the Objective and, if still valuable, make changes for the next cycle
OKR Example: How Does That Look in Practice?
Why: You have always struggled to be a healthy person – you are very fond of food and alcoholic beverages, and sports are not your favorite to do. Now it starts to affect your health; therefore, you realize your lifestyle has to change, and you set an OKR for the coming three months.
|Objective||I want to get healthy||Significant: it means a lot to you to become healthy, as your health is currently not so good
Concrete: this is something that just needs to happen; it has a lot of priority
Action-oriented: It requires you to take action to improve your health
Inspirational: You would be so proud of yourself if you achieved this goal
|Key Results||Lose 10 lbs||Specific & Time-Bound: lose 10 lbs in 3 months
Aggressive Yet Realistic: that is a lot of weight loss, but I know I can do it
Measurable & Verifiable: I can measure at the end if I have lost the 10 lbs
|Key Results||Eat 9 ounces of fresh vegetables each day||Specific & Time-Bound: you need to eat 9 ounces every single day of a week
Aggressive Yet Realistic: it is a lot of vegetables, which you do not really like, but if you cut down on other food sources, it is doable
Measurable & Verifiable: each day, you need to measure your vegetables until you have reached 9 ounces
|Key Results||I want to run 3 miles, three times a week||Specific & Time-Bound: 3 days out of the 7-day week, I run for 3 miles
Aggressive Yet Realistic: for a beginner, 3 miles running is tough, but I have enough days in between to give my body some rest
Measurable & Verifiable: I can measure progression by marking the run-days in my agenda
Fair Warning; Keep in Mind the Success Criteria!
Like any framework or methodology, it is only as good as the execution. As they say, Good intentions can still pave the way to hell, therefore when adopting OKRs within your organization, keep in mind the following success criteria:
- Before you start, start with WHY (do I want to adopt OKRs);
- OKR provides for fast-paced business environments and quick changes, but that does not mean you can implement fast.
- Reserve enough time for OKR crafting, as it will make the difference between success and failure, especially when you are just starting!
- Less is more—work, at most, with five Objectives. I recommend 1-2 for the first attempt.
- There is no right or wrong; keep this in mind:
- Objectives are significant, concrete, action-oriented, and inspirational.
- Key Results are specific, time-bound, aggressive yet realistic, and measurable & verifiable.
- Every month review the progress of your Key Results. Key results are either Achieved or Not Achieved.
- Therefore, you need to know how they progress through the process to make the necessary on-time adjustments.
- Last but certainly not least: Get support and buy-in from your coworkers by involving them in the adoption process and challenging them to think about what they can do to help achieve the OKRs.
- You can even add this to their development plan, although OKRs on this level should not be included in any compensation plan as it paves the way for setting an easy-to-reach OKR to ensure the compensation.
If you want to read more about OKRs, I recommend the book ‘Measure What Matters,’ written by the OKR godfather John Doerr.
Twenty years ago, he introduced the methodology to the management of a small company named Google. In his book, you can read more about that story and other organizations that have successfully implemented and are using OKRs to drive their business.
John Doerr also did a TedTalk on ‘Why the Secret to Success is Getting the Right Goals‘ – watch here.
At Kolme Group, we want to help you get the best out of implementing OKRs in your business and help your team focus on the main business priorities. We see great value in using the OKR methodology to make your business and team thrive for the best!
Don’t hesitate to contact us to learn more about our services and how we can help you.
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