What are OKRs?
As organizations seek to improve their performance and achieve their goals, it is important to have a structured approach to goal-setting. One framework that has gained popularity is OKRs, which stands for Objectives and Key Results. OKRs provide a systematic method for aligning individual, team, and organizational goals with measurable outcomes that are critical to success. In this article, we will explore what OKRs are, their benefits, how to set them up, and some best practices to follow.
OKR Overview: Objectives and Key Results
At its core, an OKR is a way to articulate desired outcomes that reflect the company’s priorities as well as measurable results that indicate the achievement of the objective. Objectives represent the desired outcome, while Key Results are measurable indicators for progress and success. In other words, Objectives are what and why you want to achieve it, while Key Results are how you measure progress towards that achievement.
Objective Statements
Objective statements are the broad, aspirational goals that you want to achieve. These should be directional and inspiring, providing a clear focus for your team’s efforts. Objectives should be qualitative and high-level, avoiding specific numbers or strategies, as these details will be covered in the Key Results and action plans.
Objectives are typically set for a specific period, such as a quarter or a year. They should be ambitious, but also achievable. It is important to ensure that your Objectives are aligned with your organizational goals, and that they are specific enough to give direction.
Key Results
Key Results are the measurable outcomes that indicate progress towards achieving the Objective. They must be specific and measurable, with a clear timeframe for completion. Key Results should be aligned with the Objective and be focused on the near-term results that contribute to the overall Objective.
It is important to set ambitious but attainable Key Results that are achievable within the timeframe of the Objective (usually a quarter).
Connecting OKRs to Strategy and Daily Actions
OKRs provide a powerful way to connect high-level strategy with daily actions. The process begins with setting the Objective, followed by identifying the Key Results that would serve as evidence of progress towards the Objective. Once the Objective and Key Results are established, the team identifies the initiatives needed to achieve the desired results. These initiatives can then be broken down into tasks, projects, and actions that should be completed on a daily or weekly basis. Key results are meant to each reflect one important aspect of the objective. This means you can create one action plan or initiative for each key result. If the key results were set properly, the action plans should be collectively exhaustive and result in the achievement of the objective.. That being said, the power of Key Results stems from their nature of measuring the outcome. They don’t measure the progress of the project itself.
This starts to make sense when you think of Projects as Hypothesis. A project is a sum of tasks designed to achieve something. Yet, projects are only measured on time, on budget, and on scope. They’re not measured if they achieve anything. That’s the missing variable in how we manage projects, and that’s precisely what a Key Results captures in it’s outcome. A Key Result validates the project. If a project leads to a Key Result being achieved, then it was worth it. If a Key Result hasn’t been achieved even though we did all the project work, then we need to re-iterate on the project and change things up.
The ultimate goal of OKRs is to align daily actions with the overall strategy of the organization. This helps to ensure that everyone is working towards the same goals, and that progress is being made towards achieving those goals.
Developing an Outcome Mindset
One of the key benefits of adopting an OKR framework is that it helps to develop an outcome-oriented mindset. This means shifting from a focus on outputs and daily tasks to a broader, more strategic perspective. Instead of simply completing tasks, teams are focused on achieving measurable outcomes that contribute to the overall success of the organization.
Adopting an outcome-oriented mindset requires a change in the way that people think about their work. It requires a focus on the big picture, followed by the results, and then the actions needed to achieve those results.
Challenges and Persistence
Implementing an OKR framework can be challenging, as it requires a significant change in thinking and approach. Initially, it may feel difficult to shift from a focus on immediate, controllable tasks to a broader, more strategic perspective. However, with practice, best practices and help from the leading OKR implementation team, it’s a rewarding journey.
Some common challenges when implementing OKRs include:
- Lack of buy-in: If team members don’t understand the benefits of OKRs or don’t see how they relate to their work, they may be resistant to the new framework.
- Setting unrealistic goals: If Objectives are too ambitious or Key Results are unrealistic, it can be demotivating and lead to a lack of progress.
- Lack of alignment: If Objectives and Key Results are not aligned with the organization’s overall goals, it can lead to confusion.
- Inadequate tracking and monitoring: Without a system in place to track progress, it can be difficult to make data-driven decisions at the right time and identifying risks
To overcome these challenges, it is important to ensure that everyone is on board with the new framework and understands how it will benefit them and the organization as a whole. Objectives and Key Results should be set in a workshop setting with input from all relevant stakeholders, and progress should be regularly tracked and communicated to ensure everyone is aligned and making progress towards the same goals.
