The Easy OKR Guide
Learn how to write good OKRs and find out how they’ll boost your results.
What is an OKR(Objectives & Key Results) ?
Objectives and key results are a form of goal setting for teams and businesses that want to set ambitious goals and meticulously track them with metrics. From nonprofits to software startups, teams everywhere are turning to OKR’s to help them meet their goals and grow their organization.
For many teams, the OKR meaning might seem too simplistic. But the simplicity of this system is what gives it the flexibility to adapt to many different types of teams and organizations. To create your own goal using OKRs, fill in this sentence:
I will accomplish (objective) by (date) through attaining and achieving the following metrics (key results).
The objective can be any goal you want to reach such as increase your lead generation by 5% or improve employee morale by fiscal year-end. And the key results are the vital metrics you need to track to ensure that you do reach your goals by the date specified.
What is an Objective?
- Should be Inspirational.
- Should be Directional.
- Should be Time-Bound.
- Should not have High-Impact.
- Should be Understandable.
- Should not be technical.
- Set up a colony on Mars.
- Increase ARR from Asia.
- Optimize the sales process by Q4 2019
- Achieve 100k checkouts
- Improve internal employee engagement.
- Launch a new SaaS product.
What is a Key Result?
A Key Result is a measurable accomplishment required for the Objective to be achieved. It contains a metric with start and target value you want to achieve.
Key Results measure the progress towards achieving that objective.
- Should be measurable.
- Objective should have at least 1 Key Result.
- Objective can have a maximum of 5 Key Results.
- Close 10 deals worth 4M
- Post 25 articles in the Employee Engagement category.
- Decrease churn rate by 5% yearly.
What is an Initiative?
An Initiative is about what you’ll do to achieve your Key Results. It’s like how you’d describe the journey from point A to point B. For example, if one of your Key Results is increasing revenue, a good Initiative might be improving the company’s blog content and social media presence.
- Should be Specific.
- Should be Time-Bound.
- Should be independent of external factors.
- Hire a Sales Manager by Q3 2021.
- Setup and Send out 100k cold emails.
- Publish 30 articles in the next month.Cha
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A Brief History of OKRs
Andrew Grove, Co-Founder and CEO of Intel, developed MBO into OKRs framework.
With the clear intentions of affordable SaaS to everyone, easy.xyz team launches their first SaaS product culture.easy
Benefits of OKRs
Objectives and Key Results (OKRs) is a way to set goals and measure your success. It is important because it provides a framework for clear communication, alignment of effort, and ownership of the desired result.
It’s an effective project management process that can be used by any company or team. There are many ways to use the OKR methodology but they all have one goal in common – aligning the organization around common goals. This alignment of effort leads to higher productivity, better quality outcomes as well as better work-life balance.
“As much as I hate process, good ideas with great execution are how you make magic. And that’s where OKRs come in.” – Larry Page, Google
OKRs are a great management tool that’s been proven to work in a variety of different situations. They help managers and employees get on the same page, just like they say in the song.
We all know people can achieve really great things when they’re focused on achieving a goal – but communicating the bigger picture has been hard for everyone to understand. That changed with OKR.
Organizations who don’t have goal management in place will have the biggest impact from adopting OKR. It will create a culture shift from focus on outputs to outcome-based goals, and it will increase transparency and alignment within the organization.
1. Determine if the Company is a good fit to use Objectives and Key Results (OKRs)
A company should be using Objectives and Key Results (OKRs) when they want to improve their performance by prioritizing tasks that would increase efficiency. They also need to keep track of the progress of the tasks so that goals can be achieved in an efficient time frame. OKRs are great for companies who don’t want to waste any time and just want to work on what will get them closer to their goal. Using OKRs for goal planning and execution monitoring results in the following changes
- Complete Transparency – Companies that use OKRs are super transparent about what they are after. They often share their progress publicly on social media to keep employees engaged and focussed. Complete Transparency might have some disadvantages for certain companies where privacy of work is important. Ex: An R&D firm that only wants a handful of scientists to know the goals of their research.
- Open to Feedback – By virtue of laying out OKRs, companies create an environment to collect feedback on all its goals from everyone. This promotes an open and a meritocratic culture.
- Ongoing Accountability – OKRs provide a great way to monitor real time progress of goals. Every employee gets to see how all the goals are progressing. This makes the entire workforce accountable for what they have signed up for.
- Ambition Friendly – OKR thinking natively works well for teams that are inherently ambitious. This aspect is contagious and encourages the participants to aspire for ambitious goals.
Evaluate if the desired changes in culture caused by OKRs are welcome in your Company or Team.
2. Bring Employees onboard with OKRs
Once the Leadership has taken a call to implement OKRs, focus on educating the various participants (usually the entire workforce) on the fundamentals of OKRs. OKRs are a fairly simple concept to grasp. Its simplicity makes it easy for organizations to adopt and at the same time gives way for oversimplification of its concepts. There are a handful of concepts and topics that need to understand everyone so that the company as a whole is on the same page in the way they are going to define and progress on their goals. Possible ways to get educated on OKRs.
- Work with an OKR coach, who can also be consultative in helping teams define their OKRs.
- Read the book ‘Measure What Matters’, which succinctly illustrates the theory behind OKRs with some mini case studies.
- Read up on online resources.
However you plan for training your workforce, make sure the following OKR concepts are well understood
3. Brainstorm on Goals
Armed with a proven methodology to execute audacious goals, the next step is to apply the theory to your practical situation. The first order of business is to determine the time period over which you want to define and execute goals. Companies typically plan their goals for a quarter-time period. Larger companies do it for an entire year and it’s not uncommon to see startups just plan for a month.
A common way to get started is for the Leadership to lay down the Organisation’s goals. These are the goals that need to be achieved as a company in its entirety. In general, these goals would be achieved by cross-department/team collaboration. Therefore these Organisation Goals lead the way to define Team Goals for the relevant teams. This tree of Organisation and Team goals is a good deliverable to arrive at. Socialize this tree of goals with the Department heads to get their buy-in. The department heads will highlight their Team goals within their sub-organizations to collect feedback and get the buy-in from the entire workforce.
4. Break down the Goals and collect Bottom-Up Feedback
Once the Organisation and Team goals are agreed upon, the various Department Heads can do a similar exercise to further break down the Team goals into Individual goals. The prescribed approach is predominantly a top-down approach. But organizations with OKR usage experience will find ways to also incorporate feedback bottom-up that result in a hybrid approach of top-down and bottom-up OKR goal setting.
5. Solidify Key Results
When OKRs are initially composed, they will be a bit vague and that’s fine. The most important thing is to get clarity and buy-in in terms of what needs to be achieved. The details and specifics are secondary. For example, choosing to “Be recognized as a top customer-centric company” is an exciting and challenging goal that first needs to be prioritized. Key Results which help measure the Objective in multiple dimensions will emerge later as a result of thought, discussion, and feedback incorporation. Once the Key Results are figured out for each Objective, the goals become very categorical.
6. Add Initiatives to OKRs
With the desired end state nicely captured by the OKRs, it’s time for methodical execution. Teams can capture the tasks that need to be performed to achieve the measurable outcomes captured in the Key Results. These tasks are also called as Initiatives in the OKR framework. Owners of the OKRs can augment their OKRs with Initiatives. This can also be done collectively within teams so that each team member can pitch in the various Initiatives that can result in the Key Result progress. Detailing the Initiatives capture the ‘How’ part of execution on a Key Result and by extension the Objective.
7. Monitor progress with weekly CheckIns
A major appealing factor of OKRs is that it captures the realtime progress and makes it transparent for everyone to identify where efforts need to be prioritized. This helps teams to be aware of their strengths and gaps at every moment of execution. This is only possible when individuals check in their progress frequently. A popular cadence that is followed is a minimum of one check-in every week. Teams get together every week and provide an update on their OKRs and update the system accordingly. This helps in collecting ideas and organizing the next steps to execute the OKRs.
What are Initiatives?
Initiatives are like potential tasks/projects that may help you to achieve an Objective. Initiatives are different from Key results because they’re based on assumptions about what will work best.
To avoid slowing down your Objective, Initiatives can be created without affecting progress. Check-in with your Key Results regularly to ensure that any Initiatives you undertake are delivering the desired outcome.
The benefit of setting OKRs and Initiatives is that it’s easier to differentiate between what was achieved (result) and what was done (outputs). In addition, you can be committed to the same objective without being inflexible on an operational level.
More OKR examples
We’ve put time into compiling a list of how you can use OKR in different departments inside our company. If you’re just starting with it, these examples show a range of places to try out your own OKR implementations.
These guides can be used to introduce OKR for teams, departments and entire organizations. You can find them here.
OKRs have been used successfully in both individual and team settings. One of the most popular scenarios for using OKRs is to set company-wide goals, such as revenue, employee retention rates, and customer satisfaction. The OKR system is most effective when it’s the organization’s top management defining the goals.
Key Performance Indicators (KPIs) are measurements that can help monitor the progress of a business or an organization. They are useful for measuring how well a company is performing in relation to how it should be performing.
For more information, please this article.
Every thing can be measured. Make sure to choose key results that will show whether or not your objectives are being met. There should be both output-based and outcome-based measures of the objective, with the outcome measure being more important.
The SMART goals and OKRs are two different forms of goal setting and objectives. The SMART goals is a measurable, attainable, relevant, time-bound goal. The OKRs is an objective with key results.
- We should go for the SMART goals if we want to set smaller-scale goals as it gives us more control over our work and enables us to keep track of our progress.
- The OKRs should be used when we have a larger project with multiple deliverables or specific objectives that need to be met at the same time.
This depends on whether your company has stretch goals or not. 70% progress is the sweet spot for companies with stretch goals, and 100% progress is excellent if these are OKRs that can be reached consistently.
We don’t recommend tying bonuses to OKRs. Not achieving them shouldn’t be taboo; instead, we should see this as an opportunity to discuss a change in direction and how you can help our employees succeed.
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