March 12, 2019
What you need to know about OKRs–an overview of best practices
OKRs (objectives and key results) are becoming the go-to goal-setting system for many modern companies. In this article, we’ll provide an overview of the components of OKRs and review best practices. Our objective is to introduce the methodology and help you understand how an OKR execution might work.
In his book, “Measure What Matters,” John Doerr tells us that OKRs are a collaborative goal-setting protocol for companies, teams, and individuals; a management methodology to ensure everyone in the organization focuses their efforts on the same important issues.
A definition of OKRs
Simply what is to be achieved
Significant, concrete, and action-oriented
Key Results (KRs)
Benchmark and monitor how we get to the objective
Succinct, specific, and measurable
Include hard numbers
As with any major corporate initiative, a well-defined plan is crucial
First, secure executive endorsement and commitment
Determine at what level you will introduce the program, executive-only, team-level, or company-level
Finalize an implementation plan
OKRs should be translated from your mission, vision, and strategies. The development phase is the perfect time to reinforce these values. Based on your key strategic initiatives, create your first set of OKRs. Once OKRs are determined, they need to be communicated throughout the organization.
Quantifiable (use numbers)
An objective is a qualitative goal designed to propel the organization in the desired direction. A key result has the same attributes as SMART goals (specific, measurable, attainable, relevant, and time-bound).
Typically, the objective part of an OKR is expressed in words, not numbers. Key results delve into the numbers and metrics, much like a KPI (key performance indicator).
Cadence: how often should you set OKRS?
The default answer for “How Often” is quarterly. We think it is better to set a quarterly OKR toR, ensure that everyone follows the rhythm of checking in, and that about 10% achievement is occurring during each of the 13 weeks. However, companies have a great deal of latitude in how they adapt the program to their culture and unique business situations. Frequency in setting OKRs is one of those areas of flexibility.
Limit OKRs to 3-5 objectives (per department, team, or individual) and 1-3 KRs per objective
Any more and your people could lose focus or become disengaged. No one should have more than 3-5 objectives per quarter, with 1-3 key results per objective.
Bottom-up should be 70% of the process
Goals can be thoroughly cascaded, driven from the top, but with input from below. Giving your people the responsibility to come up with 70% of their OKRs ensures commitment and buy-in.
A recent survey of CEOs indicated that 40% considered connecting their workforce with the company’s strategic initiatives their number one priority.
By connecting, we mean creating sets of OKRs throughout the company that align with your highest-level priorities. These OKRs detail the contributions required from teams and individuals throughout the enterprise.
OKRs define who’s doing what, allowing you to monitor progress without micromanaging.
Make both long-term goals and quarterly objectives visible.
An enterprise work management platform provides visibility to everyone’s OKRs. In that way, everyone knows how his or her current priorities factor into the larger overarching goals of the organization, creating alignment and focus.
The number one must do is frequent check-ins. We strongly recommend you conduct regular check-ins with teams and contributors, assessing their progress throughout the quarter.
Scoring OKRs allows you to learn more about your business. Your objective is to learn from the KRs at the end of each quarter and to create better KRs for subsequent quarters.
Keep it positive
Avoid turning OKRs into a performance review. Not achieving 100% of an OKR should provide learnings, data, and indicators about how to improve the process in subsequent quarters.
This subject matter could fill a book. In fact, it has filled several books, like “Measure What Matters” and “Objectives and Key Results.”