Why You Need Well-Designed Goals for Your Business
The success of your business will be determined by how clearly you know what it is that you want. A clear goal will provide you with the motivation to set priorities and focus on what needs to be done first. It will keep you from feeling overwhelmed and it will prevent you from getting distracted.
– It gives a sense of direction: When someone has a goal, they know where they are going and this can create an overall sense of direction for the entire company. This also means that they have something to measure their progress against which means that there is no room for excuses or stagnation.
-It provides motivation: Goals give employees the motivation to work together because their work is connected with achieving something meaningful. The same goes for customers because they want to support companies who have clear goals in mind as well.
What are Objectives and Key Results?
Objectives and Key Results (OKRs) is a framework that can be used to set goals and measure progress. It is often used by companies for strategic planning, management, and goal setting.
Objectives: Objectives are goal statements that describe what the company wants to accomplish in the future.
Key Results: Key results are the specific measurable outcomes that need to be achieved to justify the completion of the objectives.
How to write good Objectives in the OKR framework?
Objectives fundamentally help in communicating and executing the company’s strategy and goals. They should be specific and clearly stated so that it’s obvious what actions are needed to achieve the objective. Great objectives have the following qualities
- Ambitious and Inspiring – Great companies invariably have aspirational goals and thats what attracts the workforce. They have the most passionate visions of what they want to accomplish, and they make it happen. Compensating employees with lucrative salaries can only motivate them to an extent, but ambitious challenges serve as motivation drivers and can drive teams to peak performance.
- Measurable – With OKRs in place, companies are able to measure progress against specific goals. This is useful for when you’re assessing whether your company achieved its objective, or if you need to reassess your approach.
- Provide Transparency&Clarity – OKRs are meant to drive peak team performance..All goals are open, and progress can be viewed by any member of the company. Making sure employees have a stake in the company’s objectives and progress, they see that they are all striving towards the same goal.
- Achievable – If a goal is not achievable, it will only lead to disappointment. The best way to ensure success is to create goals that are challenging yet achievable. The idea is to encourage audacious goal setting and follow it up with a reality dose of its viability.
Its easy for Humans and Teams to underestimate their potential. The OKR approach provides a simple and yet effective antidote to dream big and execute methodically.
Check out the following OKR
Objective: Increase Revenue to make the company the market leader.
- Key result: Reduce net revenue churn by 2.75% in 2020
- Key result: Improve average NPS score to 9.6
- Key Result: Obtain a revenue of 17 million in 2020
Let’s see how it fares in terms of its qualities
- Ambitious and Inspiring – For a company that is not a market leader, this is an aspirational goal worth going after.
- Measurable – Here the key results measure whether the objective has been reached.
- Provide Transparency&Clarity – By providing clear metrics that matter, the message is clearly sent out. These goals in turn provide the starting points for sub goals to be defined. For example, the West Coast territory could sign up for a 5 million Revenue goal.
- Achievable – One can only comment if a goal is achievable if she knows the goal. By clearly writing the OKRs, the goals are effectively communicated so that constructive feedback can be accumulated on the goal’s viability.
Steps to write great Objectives and Key Results
Brainstorm your goals.
It starts with the Leadership. Leadership are the people who are responsible for setting the vision of the company and provide directional clarity in terms of what needs to be done. One of the first tasks for Leadership is to discuss and agree on goals. This is an opportunity to capture the big items that the team wants to accomplish over a period of time. Allow for constructive feedback on each of the goals identified so that the team arrives at an agreement on the most important goals to achieve. This also ensures that there are no conflicts between the goals they have set.
Publish draft OKRs and collect bottom up feedback.
One way to get your company talking is to publish a draft of objectives and ask for feedback. This lets everyone know what the company is trying to accomplish, and helps with more focused discussions. This step allows for collecting bottom-up feedback and the entire company gets an opportunity to pitch in.
Solidify your Key Results.
Once consensus is obtained on the Objectives (and the WIP Key Results), take another pass in solidifying the key result metrics. This gives an opportunity to double-check on how the Objectives can be measured.
Tips on setting up your OKRs
- Cover the basics first. Only focus on five things that will make a true difference for your organisation over the course of the next 90 days. Focus on key results that show you are moving towards those objectives, too..
- Team members need autonomy to be able to decide which key results they’ll lead. When this isn’t possible, let them choose which Key Results they are most qualified to handle so that they can remain engaged in the team.
- Encourage your team to deliver bad news as early as possible. This gives an opportunity for the rest of the team members to chip in whatever way to win as a team.
- If you find that your goals are not aligned with what you need to be successful, make the necessary changes as soon as possible. Don’t let one goal drag down any others because each goal is worthwhile in its own right.
- Encourage team members to come up with stretch goals. An example of a stretch goal is one that’s just outside your comfort zone–even if it seems impossible, like doubling annual sales by improving products.
Common mistakes when writing Objectives and Key Results
- Business as Usual Objectives – Ideally, OKRs should focus on changing the Status Quo. Skip creating OKRs such as ‘Continue to provide amazing customer service’.
- Creating many OKRs – When everything is a priority, then nothing is a priority. Identify 3 to 5 objectives to sign up that have the biggest impact.
- Disconnected OKRs – A set of OKRs that are not connected indicates that not everyone is working as a team. Aligned OKR will boost employee engagement because everyone working on the Objective can see how it is connected to the wider picture.
- Capturing Activities as Key Result – One of the most common mistakes that OKR creators make when defining their Key Results is to capture an activity as one of their Key Results. This is a bad idea because it’s possible for the company to do that activity and still not be doing a good job in achieving their business goal. Both Objectives and Key Results capture the Business outcomes that need to be accomplished. The former is directional and the later is clearly measurable.
Irrespective of the type of goals you are trying to accomplish – personal, professional, or organizational, working on them within the perspective of Objectives and Key Results is going to make the process more practical and achievable because OKRs let you focus on what matters the most and pave the path for goal execution. In addition to this, organizational OKRs bring alignment between teams and the organization, laying the foundation for High-performance culture.
To learn more about how OKRs methodology can benefit your organization and how you can transition your team to OKR methodology seamlessly, schedule a call today.