Published by Andrew Constable MBA in Forbes magazine
You may have heard about objectives, goals and such, but what are OKRs? OKRs stand for “objectives and key results” and were first introduced at Intel Corporation by Andy Grove, the legendary CEO. OKRs evolved from other management methods, such as management by objectives, and have been applied across businesses ranging from early-stage startups to global enterprises.
OKRs become famous when Google started using them in the late 1990s; this has been credited as one of the main reasons behind their explosive growth; of course, having a killer product helps, as well. The use of OKRs expanded across Silicon Valley and into various industries across the world. OKRs are a great way for businesses to practice focus and align both individuals and teams behind goals and help stop businesses from drifting off objectives by chasing the next shiny object. This helps organizations develop a culture of a shared purpose, and they have other prominent benefits:
1. The alignment of the objective is vital in ensuring that everyone is moving in the same direction. Taking the example of a rowing boat, everyone must be rowing in the same approach to stop from standing still.
2. Focus ensures that the individuals, teams and the broader organization are doing the work that is important to the overall aims.
3. There has to be transparency in the approach. Therefore, we need to know what others are working on within the organization. There are multiple software platforms that can help in this regard.
4. Lastly, for OKRs to succeed, we need to ensure that the organization is engaged and motivated. This ensures we give OKRs the best chance of succeeding in the organization.
The structure of an OKR (registration required) is as follows, with an example goal for reference:
Objective: Save time wasted in update meetings.
Key result 1: Reduce the number of meetings by 25%.
Key result 2: Reduce average meeting time from 60 minutes to 30 minutes.
Key result 3: Reduce the average number of meeting attendees from 7 to 3.
The key to OKRs is to have an objective that is ambitious and qualitative in nature. Personally, I also suggest to teams that they should start with one objective per quarter and then expand to a maximum of three with corresponding key results aligned to each objective. The key results have to be measurable and quantitive in approach; otherwise, it becomes impossible to determine if you have achieved the desired objectives.
So we now know where OKRs came from and what they are, but what are the main mistakes I see when implementing these?
Mistake 1: Your OKRs turn into a huge list of tasks.
The companies that have successfully implemented OKRs understand that the purpose of the method is to focus on aspects that matter to the overall objectives of the individual, team and organization. Failure to focus is the leading killer of these initiatives, as teams will continue to chase the shiny new objectives presented to them every day. Although OKRs are easy to understand, implementing them is hard, and each organization needs to make some tough choices about where to focus its efforts; otherwise, your OKRs will turn into a massive list of tasks, which means you focus on nothing.
Mistake 2: Your OKRs don’t challenge.
This is a common mistake when teams are new to implementing OKRs. The key to being successful with this method is finding that sweet spot between being realistic and being a stretch for the team. An easy OKR would mean that the team would find this not challenging and therefore not meaningful, whereas a stretch OKR may lead to failure, which could demotivate the team. In many coaching engagements, I expect teams to achieve around 70%–80% per objective in a period. If you find that your success is higher or lower than this, you may not be setting your OKRs correctly.
Mistake 3: You fail to monitor your OKRs.
As discussed, OKRs need to be measurable, with the key results being quantitative. In a dynamic organization, it’s easy to lose track of these objectives, and monitoring these is crucial. The organization needs to complete weekly check-ins and evaluations to complete and track these. With software packages available, this process has become a lot easier and cost-effective, and I cannot state more the importance of this and the development of a management cadence for the organization.
OKRs are a great methodology to drive growth within an organization and, when implemented correctly, allow for razor-sharp focus to be applied. But although they are easy to understand, the management and cadence of review can’t be underestimated.
Looking for an OKR coach to help get your business?
If you would like to understand more about developing and growing products using OKRs, you can obtain more information here.
Note: All images have been taken from Canva.com and are not subject to copyright.