O.. K.. R..
Over the last couple of weeks, I had the privilege of participating in Certified Professional OKR workshops by Niroshan Madampitige where I gained more insights into OKRs.
You have probably read about OKRs before in one of my previous posts. But this post specifically dedicated to OKRs dwells down deeper into some of the insights from these workshops.
OKR is a collaborative goal-setting tool that can be used to set challenging and ambitious goals! Now, I know what you are thinking. This is yet another goal-setting tool amongst the many out there. But it is not! In my opinion, this is “the” goal-setting tool to use. The beauty of OKRs is that it can be used in almost any setting. Be it at different organization levels or personal; it is the go-to tool.
First and foremost, as with any goal, the intent and the discipline are key. For us to reach our goals, mindset is paramount. Without the proper mindset and the hunger to achieve your goals, goals are merely just statements. The mindset is important so that day in day out, you have these goals etched on you and you work towards achieving these goals.
So, if you have the mindset and your goals already in mind, why would you need yet another goal-setting tool? Because OKRs help you track progress, create alignment, and encourage engagement around your goals, unlike other goal-setting tools where you would set and forget your goals.
Not convinced yet? How about if I state that OKRs supported Google's growth since its adoption of the tool in 1999; the second year since Google began? And companies such as LinkedIn, Twitter, Dropbox, Spotify, Airbnb and Uber have since followed suit. Have I convinced you yet?
How it all started
The concept of OKR began in the early 1970s. It was created by Andy Grove who was the third employee at Intel and eventual CEO of the company. Andy was also an early investor at Google thus allowing Google to adopt the tool from its early days. OKR stems from the concept of Management by Objectives (MBO). Management by Objectives is a model that aims to improve the performance of an organization by clearly defining objectives that are agreed to by both management and employees. Despite Intel using Management by Objectives for some time, Andy noticed certain drawbacks in this framework and thus, the eventual birth of OKRs.
Let us get to the nitty-gritty!
OKR stands for Objectives and Key Results. As I mentioned previously, OKRs can be used by organizations, teams, and individuals to set objectives and measure the progress towards achieving the objectives.
Objectives
Simply, objectives are what is to be achieved. Nothing more, nothing less. Objectives should be significant, concrete, action-oriented and ideally inspirational. Most importantly, objectives should tie up to the eventual vision of the organization or the personal vision.
Objectives alone are not enough to drive execution. This is where key results come in and plays a pivotal role.
Key results
Key results are measurements that help you understand the progress towards meeting your objectives. Key results are intermediate milestones to be achieved which guarantees focus and alignment in the path of meeting the set objectives. In my opinion, key results are the main component of OKRs that make it rise above all the other goals setting tools. Key results are either met or not. There is no obscurity around it. When key results are reviewed at the end of a time-boxed period, the answer to a key result should be yes or no.
Some of the attributes of key results are –
- Measurable
- Specific
- Time boxed
- Aggressive yet realistic
“It’s not a key result if it doesn’t have a number,”
Marissa Mayer — 20th employee at Google, ex vice president of Google and ex CEO of Yahoo.
Now to an example
To highlight the structure of an OKR, let us use a simple customer service-oriented example.
Objective — Deliver exceptional client service experience.
The above objective is an inspirational, action-oriented statement that defines what is to be achieved.
Key Results —
- Resolve incidents within 48 hours.
- Improve Customer Satisfaction score from 3.5 to 4.
- Improve Net Promoter Score from 7 to 9.
The above set of key results define a set of measurable outcomes that help understand the progress towards achieving the set objective.
Yes, it is simple as that!
OKR cadences
When setting up OKRs it is important that regular cadences are set up as well. This allows to regularly check in on these OKRs and measure the achievement of the key result and make any adjustments as needed.
Cadences start off with annual OKRs. This helps define the objectives for the year which contributes to the eventual vision in the long term.
Thereon, OKRs are broken down into quarterly OKRs. By doing so, we break down the larger objectives into smaller chunks which help us focus on the OKRs better. If required, further breakdown of OKRs can be done to monthly, weekly, and eventually daily tasks which are referred to as initiatives. I.E., all the tasks that will help achieve the key results.
Setting OKRs in a time-boxed manner starting from one year and breaking them down to three months, one month, one week and eventually, daily initiatives resonate with the human mind by breaking down larger goals into smaller chunks which allow optimum focus on what needs to be achieved.
Ideally, the OKRs that have been set should be reviewed periodically to make sure key results are being achieved. The period would depend on the timeboxing that has been set for the key result. For example, one of my key results is to exercise 5 days a week. Hence, I review my OKRs on a weekly basis to make sure I have achieved this key result. And remember, it is a yes or no answer. Have I exercised for 5 days or not? It is as simple as that!
OKR best practices
Less is more
Select a few well-chosen objectives and key results that meet the vision and that are a priority at this moment. The golden number ranges from 3 to 5 objectives with 2 to 4 key results.
Stay flexible
The only constant is change — Heraclitus
With that in mind, as the environment around us changes, we need to adapt. So does our OKRs. This makes sure the objectives and thus the key results are not obsolete. This is yet another important reason to have the correct OKR review cadence set up.
This brings me to regular cadences
As highlighted multiple times, it is important that regular cadences are maintained. This serves as a regular reminder of the objectives and key results and provides room for any changes.
Stretch goals
The objectives that are set need to be challenging enough to step out of the comfort zone. Objectives should not be too easy that they constantly achieve a 100% success rate. Having stretch goals ensures that OKRs contribute to growth. The sweet spot for an OKR success rate would be 60% to 70%.
Long story short
OKR is a simple yet powerful tool to set challenging, ambitious goals and most importantly achieving them with measurable outcomes.
Objectives define what is to be achieved. It answers the question where do I need to go?
Key results help measure the progress towards meeting your objectives. It answers the question how do I know I am getting there?
Initiatives tasks that will help you achieve your Key Results. It answers the question what will I do to get there?
Regular cadences in setting your OKRs and reviewing them helps you understand your overall progression in meeting your key results thus meeting your objectives thus meeting your vision. Period!