The Goal Setting Objectives Key Results Solution (OKR )
These 8 companies have 1 thing in common
At first you might assume they are mostly in the high tech area or recognize they are all very successful brands. There is another area that they all have in common. They have all applied the OKR (Objectives and Key Results) strategy into their business.
Objectives and Key Results (OKR) was started in Intel as a method to track measure and communicate expected goals. A key benefit to the system is how it describes the strategic approach to reaching an objective and can be applied in life or business as a method to help manage the performance and goal attainment.
An example in life using OKR is:
A person wants to take a 2 week vacation with their family in Spain within 9 months.
All to agree on destination within Spain to visit by month 5 and book holiday
All ensue their passports are valid by month 8.
An example in business using OKR is:
A business wants to improve its sales conversion by 10% within the next 90 days.
Sales team refreshed coaching skills for objection handling is applied in the first 21 days and repeated at day 60
Marketing produce improved sales literature and value offering to customers within the first 7 days.
What are the key elements of OKR’s?
I have written before about the need to focus on 90 day goal time lines. This is seen in business measurements through quarterly results and also reflects the human ability to connect to a 3 month future window of time.
In addition to the 90 day shorter term goals there should be a connection to the broader vision and mission for your life or business. From this, create a 12 month goal. I recommend to avoid have too many end dates at the same time, this will then generate a conflict of priorities. So, avoid 1st January! Why not create 3 90 day goals that run out on a running weekly basis over a 3 week period.
Start dates 1st Jan, 8th Jan, 15th Jan, 22nd Jan.
Key Note: Make a decision is the 90 days are actual working days or calendar days! There is a significant difference especially when considering periods of national holidays.I prefer pure 90 day windows however the results should respect the real time allowed.
Key Results: The definition of a key result should be an absolute quantifiable value. Therefore a clear number should be applied to the measure of success. The method of calculation of the number should also be clearly understood and transparent.
Why is OKR relevant
You make a decision in life and business to create the level of success you crave for. These choices affect your personal and company goals through a drive of ambition. Goal setting and goal management is not chance. You may by chance win the lottery and have your dream life; however through goal setting and goal management you have a higher probability of creating it. The additional rewards and celebration of feeling worthy and earning your goal achievement holds longer term value than the chance and luck experience.
Creating too many goals can be the same issue as having none at all. The conflict of prioritization in chasing too many goals leads to mediocracy and stagnation.
By understanding and connecting a business or personal vision and mission, each step can then transfer into actionable steps that are specific enough and measurable to attain and learn from.
A side benefit of goal setting and goal management is how a gathering momentum is gained through repeated success. The disciplines applied provide the foundation of continued learning, clear focus, action oriented and an agile attitude to progress.
Empowerment and accountability
The concept of using OKR’s is to align your objective to a clear longer term purpose, vison or mission. So, the objective and results may become a one of action or activity yet their contribution to the longer term purpose and strategy will help gather momentum, excellence and focus.
When applied to a business, the use of OKR’s improves empowerment of staff. They can present to managers and leadership their own OKR’s. This submission of ideas creates a deeper buy in to medium/long term strategic objectives and retains positive motivation throughout the organization.
Such a concept may be a harder sale for cultures used to a stricter Top Down organization style or national culture, however there are methods around this scenario (not shared within the scope of this article) that can solve the challenge.
The sense of empowerment and the accountability that comes with such a method of working also has side benefits in a business. Cross departmental collaboration and communication becomes easier as individuals are not presenting or discussing a task handed to them, but a task that they feel they own and helped create.
Concept to implementation success and common pitfalls
Change in life and a business organization provides often unforeseen challenges. The same will apply when implementing OKR’s for yourself or business. It took John Doerr two attempts before Google managed to embrace success through the OKR system.
You will need to ensure your support is gained from your full network. In life this may be your friends and family and in business it will be your full organization. At this point, expect to spend a longer than anticipated time to explain the reasons behind the change and understand that not everyone’s pace and acceptance of change will be the same as your own. This may bring relationships and employees to a new set of challenges and change of directions as they leave.
The structure of OKR’s is to identify the top critical and priority elements to reach your end strategy. In a large organization this becomes even more important as a few clear stretched goals will have a larger impact on results than too many goals and spreading resources too thinly and progress becoming small. So, the important point is to be clear and communicate across the organization that some areas of the business may need more support than others in the first phase. It becomes a discussion and agreement of priority.
The measures of success of OKR’s should not be the firm criteria of employee performance reviews.
A high performer is a high performer, if their rate of success in their OKR’s is low then this may be due to other considerations, Ambition level too high or low when creating OKR’s, insufficient research, change of market conditions.
It will take time for a person to become truly proficient at creating solid OKR’s and it will also take time for the organization to understand its own capabilities at supporting OKR’s.
The OKR Grading system
One of the unique elements of the OKR system that I like is its own self review process. The objectives created when using the OKR should be ambitious and impactful as a priority for the business. The objective will often require special additional resource help and focus through skills, technology, resources, effort and time. Said simply, your objective should be a stretched goal, a goal that seems very challenging yet attainable. (See SMARTER goal setting for a similar structure)
The transparency element of OKR’s can be a challenge for organizations or people used to having more privacy surrounding their personal achievements.
The concept of OKR’s for instance in Google is to have each employee’s OKR as an inter-company public record of what they have done in the past and what they are working on right now. – A benefit of such a system is the collaboration and development opportunities that can be found. A person in finance may have a great track record or need for continued experience and learning in a task so are placed in a task team with the operations department to reach a specific OKR.
The key results are graded on a scale between 0-1 (0% to 100% success shown as 0.8 for an 80% success). The grading should be conducted every 90 days to help identify support and development areas needed and also to clarify the level of ambition and stretched challenge of the goal. If a score of 0.2 is discovered it could highlight an overly ambitious goal that was not attainable, on the opposite side could be a consistent 0.9 or 1 score which may highlight that the challenges in future should be set higher.
Key Message: Depending on the culture of your business scores between 0.6 and 0.8 are in the ideal range. There is an emphasis and acceptance that not all results can be attained within the time line as the key focus on OKR is to gather speed of implementation and not always achieve a perfection level in the results. Low scores and none attainments should not be seen as negative but considered as opportunities to grow, learn, develop and keep a healthy level of motivation. The average of your RESULTS grades becomes your OBJECTIVE grade.
A time for work and a time for review
When working within an OKR environment, outline and dedicate the specific time needed to ensure the process continues. For example you will need to set time to review your results, draft new OKR’s and create the communication plan. For a small company or at a personal level this can be easily done. In a large organization you will need to create stream line communication lines so these reviews and communications take place rapidly so they can be acted upon.
Action and speed is key for OKR’s to succeed so optimal planning time, and productivity through efficient systems is important. The managers roles and participants should not become over burdened with a complex system of measure reporting, but instead allow for maximum results opportunity through time and systems to make the OKR succeed.
OKR’s Redefine Failure
The use of OKR design could be seen in some critical eyes as setting up its participants for experiences in failure. This is where the need for clear communication is important and should be addressed from a personal level through to leadership level in a business. The overall philosophy behind OKR’s is to stretch performance at a high pace towards the correct strategic vision of the business. Every business will undergo changed environments and challenges, to reach success faster there will be the need to create risk approaches that covers personal skills and capabilities and assumptions of time and resources.
To understand that 60-80% of your results will be reached is still a significant improvement and success, this message should be communicated and understood, otherwise you risk stagnation through 100% completion results and demotivation if consistently hitting low results.
The business needs to redefine failure, hitting consistent 0.6 scores is excellent and should be embraced by leaders and the employees alike.
Many goal setting systems have evolved over the years and no doubt new ones will appear in future as we embrace technology through the improved use of analytics and social behavior. In the meantime, I suggest you give serious consideration to the benefits of implementing the Objective and Key Results OKR system.
Take a trial in personal life will offer an insight to its potential for you as a first trial. Be patient with your approach but serious in the endeavor as you just may find that OKR can help systemize your life to levels of improvement you had held back on before.
Let me know in the comments if you have any questions about OKR’s and your own experiences.
I thank you for reading this and would love you to share the article across your social media platforms and to at least one person who you think could benefit or provide additional consideration to.