Since their inception, OKRs have been used to promote transparency and growth in companies. They have many benefits and considerable impact at all levels of the business.
Here is a step-by-step guide about what OKRs are, their characteristics, benefits, how to implement them, mistakes to avoid and every hidden secret you need to know to start or improve your usage of OKRs.
I- What are OKRs?
Objectives and Key Results (OKR) is a methodology to manage the objectives of your business so that you can effectively realize your vision. They are generally established for a quarterly period.
They involve setting ambitious and qualitative goals at all levels, depending on the structure or organization of your business. Key results, quantifiable and measurable data, follow each objective to measure the progress in achieving the objectives set.
Each goal is essential, and all levels of the company must work to achieve the company OKRs. Everyone must function so that their work empower others to do their own. It is therefore crucial that all objectives, at different levels, be aligned to bring together the forces necessary to achieve the specific objectives of the company.
II- Quick OKRs History
The OKRs methodology came to Intel in 1970. Andy Grove, CEO of Intel, specifically developed it. The system that gave birth to OKRs is MBO (Management By Objectives). John Doerr also contributed to the establishment of OKRs. They became a Google investor and presented the methodology to the leaders of Google, who adopted it, having seen its benefits. It was in 1999 when Google was still in its infancy. Google used it to support its growth from fifty employees to thousands today.
However, the methodology got famous in 2013 when Rick Klau, partner at Google Ventures, made a presentation on How Google defines its Objectives: OKRs.
Nowadays, the OKR methodology is popular and used by many startups and companies such as Netflix, Eventbrite, Twitter, Linkedin,…
III- Characteristics of OKRs
Let us note the four (4) main characteristics of OKRs. To have a significant positive impact, OKRs must be:
• Ambitious: Your goals must be ambitious, hard to reach but not impossible, therefore realistic. They must also be precise.
• Measurable: They must be measurable in the sense that, the key results that accompany each objective must be quantifiable, measurable by a number or percentage from 0 to 100%. Google uses a scale of 0 to 1.0 to rate each key Result.
• Public: In the organization or the enterprise, OKRs must be public. They allow knowing the problems encountered but also what everyone is working on.
• Aligned: Companies’ OKRs must be aligned or connected. It will enable everyone to go in the same direction.
• Short cycles: quarterly or annually.
It should be remembered that the “public and aligned” characteristics of OKRs require the use of a dedicated goal management tool such as Happierco. This application with an intuitive and straightforward interface allows you to have the history of your objectives, communicate with your employees on the difficulties, make comments, follow strategically and regularly the progress of your employees through their daily or weekly reports.
IV- Structure of OKRs
OKRs structure is simple. For each objective, there are three to five key results. Individual OKRs, team OKRs, and company OKRs but never forget to align them. This alignment makes sure that you’re on the right track to achieving success at a quarter.
V- Benefits of OKRs
There are many reasons to use the OKR methodology. First, you can’t ignore it, A serious business must set goals unless you don’t know where you’re going and using OKRs offers lots of important benefits.
1- They contribute to the success of world-class companies
The goals are ideal for businesses and, without a doubt, the OKRs methodology, since its inception in 1970, is an essential key for businesses. Several large companies such as Google, Netflix, and Twitter have adopted it to increase their revenues and keep their employees more involved in their various tasks. This methodology has contributed to the success of these large companies.
2- They bring clarity and transparency in business
If the goals and outcomes are clear and precise, everyone knows what to do. Thus, everyone takes care of the priority, more even, with less distraction.
With this methodology, everyone has access to all the objectives of the company, which gives them a better view of individual contributions and collective ambitions. You know what to do clearly and how to measure success.
3- They represent an excellent lever to improve your management
In fact, as a manager, you need to organize and direct employees to the vision of the company. This methodology allows you to get employees to work efficiently and to follow them in their tasks. You should frequently give feedback on their progress. The OKRs methodology helps you become an excellent manager and allows you to be closer to your employees, which is great for your business.
4- They promote good communication
Within groups and the company as employees, it is necessary to work together, set goals, and achieve results individually and collectively. This methodology would promote better communication. It allows them to collaborate easily and work in a pleasant atmosphere.
5- They enable innovation
The ambitious nature of the objectives allows you to go beyond the usual practices. It puts you in a certain pressure that is beneficial for all if you take it with the necessary seriousness.
Besides, when an employee works in a pleasant environment and business executives trust them, allowing them to define their personal goals and those of their team with other members, this is undoubtedly a real factor of innovation. Moreover, they feel useful for the company. So, it makes them work more and better.
6- They prevent crises.
In a company with many employees, some crises or frustrations can undoubtedly occur. Thanks to a dedicated application that allows you to visualize, follow and help, you can manage your OKRs to know the progress of your employees, to get their feedback. So, you can anticipate and prevent issues.
7- They promote the commitment and performance of your employees
OKRs are an essential asset to stimulate and make your employees work better. Because they know what they need to do and know what they want to achieve. They will be more determined and focused.
“The general purpose of OKRs is to allow all levels of the company to go in the same direction, to allow everyone to focus on what matters, to perform the objectives of the company and to follow-up effectively.”
VI- How to write OKRs
An issue prevents many companies to successfully implement OKRs and reap rewards like all the big successful companies (Google, Intel, Netflix…). The fact is that defining good OKRs is very difficult. Sometimes we write Key Results as objectives, tasks as Key Results.
We don’t know what to put in each part. However, writing OKRs should not be as complicated as a Rubik’s cube. With the right guidance, you can easily set efficient OKRs. If you want tips on how to successfully write OKRs and avoid common mistakes, continue reading.
1- What do you have to accomplish?
The answer to this question is the objective. It must be definite and time-bound.
For example, if we take this objective:” Make our web application better,” This objective is not definite. To make it valid, you should be specific. Another example: “Improve marketers’ ability to write a blog post” not “Improve marketing team.”
Your objective needs to be measurable. A bad objective is “Make much money” while you can say “Grow revenue by 15%“.
2- How are you going to get that done?
The answer to this question is the Key Results. The Key Results need to be quantifiable and measurable by a specific metric.
Your Key Result can be an activity like: “Launch X feature.”
This type of Key Results usually starts with” create, develop, deliver, build, make, implement, define, release, test, prepare, and plan.”
Most time, your Key Results are a specific metric and a value to reach. For example:
• Get 50 new paying users
• Increase user retention from 40% to 75%
• Reduce churn rate by 2%
3- Examples of OKRs
Objective: Increase company revenue by 10%
- Interest 70 clients
- Get 50 new customers by the end of Q2
- Reduce churn rate to 5%
- Launch two new products that will impact our brand in Q3
- Interview 20 customers and get feedback
- Increase customer retention to 90%
Objective: Improve prospects acquisition
- Write 30 good articles to promote
- Generate 75% of website traffic through organic search
- Appear on the first page for each keyword
- Exchange 10 links each month
Objective: Make the product ideal for the customer
- Achieve Net Promoter Score (NPS) of 9
- 25% pre-registrations come from existing customers
- Get 1 referral for 3 clients (viral coefficient)
Human Resources team OKRs
Objective 1: Improve the Performance Management Process n
- Organize training sessions on the implementation of the OKR methodology allowing at least 80% of employees to better understand their goal-setting processes
- Promote the continuous feedback initiative allowing 75% of employees to participate in a regular feedback exchange
- Increase 90% of positive feedback with anonymous surveys
Objective 2: Make the office a very attractive place to work
- Collect feedback from 10 employees on ideas for improvement
- Organizer 3 monthly office events
- Find 01 food and beverage supplier in the office.
Objective: Have a better onboarding system
- Implement a new onboarding system before ending the 2nd month
- Reduce the number of configuration steps from 15 to 6
- Reduce to 2 minutes at most the registration of customers
These were some examples of good OKRs. Now go make your own.
VII- How to implement OKRs in your business
How are OKRs implemented in a company? What are the steps?
1- Communicating on OKR
It is crucial for your staff to know what OKRs are. So, before you even want to put it into practice in your business or company, you could organize meetings or workshops to explain it to the entire company. It is essential if you want your agents to understand the importance and commit to it.
2- Choosing an OKR tool
After the communication step, you need to choose a tool to manage your OKRs. For example, you might prefer dedicated software like Happierco or a simple spreadsheet. The choice of specialized software is more recommended. Indeed, dedicated software allows you to view, track, and manage your OKRs easily. You have the history of your previous OKRs, information to improve with time. Since the OKRs are public, everyone can have access to the software, which promotes and facilitates communication.
3- Organizing your OKRs
For each period, the OKRs must be defined for each level: company, team, and individual.
The objectives of the company are the first ones to be noted. The leader or leaders of the company write them. Then, at the level of the teams, we observe two movements. The leaders of the company establish a list with the team leaders. They (team leaders) then return to their collaborators to modify and adapt the list according to the capacities and report to the leaders of the company. Finally, the individual level or the agent establishes their OKRs with their service manager. Note, the goals instead of coming from the top down should go from the bottom to the top.
Objectives are modified or improved as needed. Each agent or employee must understand and believe that OKRs at various levels are achievable.
4- Evaluating your OKR
At the end of the quarter or the period you have adopted, you must evaluate your OKRs to measure your success. Between 60 and 70% achievement of the Objectives, you can have a feeling of success. If you realize less than that, it may not be a failure; maybe the goal was too high. If you reach 100% all the time, also review the ambitious nature of your goals.
If a goal has not been achieved, you can continue to work on it in the next period only if it is still important.
5- Motivating employees and celebrating after the achievement of the OKRs
After real achievement and after great victories, do not forget to celebrate with your employees. It will motivate them or encourage them to persevere and improve.
VIII- OKR mistakes to avoid
The objectives are, indeed, like the steps of a staircase leading you to the floor, to the realization of the vision of your company.
Defining good and smart OKRs is, therefore, a significant asset. However, some errors in their application, for lack of information, jeopardize the goodwill you have to move your business forward. Let’s discuss some of them.
A- During the OKR development phase
1- Listing too many goals
It’s not by listing many goals that you make your business grow, but by actually reaching the ones you set for yourself.
2- Setting incomprehensible and imprecise objectives
If you set up incomprehensible and inaccurate OKRs, your employees will not be able to progress.
3- Setting goals that are not ambitious
One of the specificities of the OKRs methodology is the ambitious nature of the Objectives. You have to aim high so that in the end you end up with a pretty glowing record.
4- Setting unrealizable objectives
It’s true that you have to be ambitious and aim high, but that should not make you unrealistic. You can not set unrealistic goals and hope to achieve them.
5- Defining non-measurable key results
Not incorporating measurement into your Key Results would be one of the most severe mistakes in OKRs. Key Results must be scales for your goals. For this purpose, it is important for your Key Results to include numbers to help you achieve your goals.
6- Objectives not being aligned with the vision of the company.
How to go upstairs without taking the stairs or the elevator? Indeed, the goals are the stairs leading you to your vision. It would be a mistake to define goals that do not fit your vision.
7- Confusing OKRs with tasks
Goals are not tasks; Key Results are not tasks either. To consider a task as an objective is a false track. You must be able to tell the difference between a goal, a KR, and a task. An objective is what you want to achieve, the Key Result is the measurement, but the task is what you do to achieve the Key Result and therefore, the goal. If” satisfying customers on your blog” is the goal, the task would be to ‘write good articles.’
8- Setting only downward goals
Focusing on goal alignment can often lead you always to take goals from the top. It is an error. You have to trust your employees, give them a margin of autonomy about OKRs.
9- Attributing poor allocation of the resources to complete OKRs
Please, do not make the mistake of assigning goals to your employees without the resources to achieve them.
There is no point in defining goals that are unfortunately good to forget for lack of resources.
B- During the OKR achievement phase
10- Keeping hidden OKRs
One of the characteristics of the OKRs methodology is its public character. It can be seen in some companies that OKRs are hidden throughout the organization which is obviously a bad practice.
11- Not following progress every week
It is clear that after the establishment of the OKRs, some employees are waiting for the end of the quarter to summarize and see the level of success. To do so is to ignore the importance and attention of the OKRs methodology.
12- Not appointing a person responsible for monitoring OKRs
Everyone’s duty is rarely realized because everyone thinks someone would do it, but in the end, nobody does it. In the case of OKRs, it would be a mistake not to appoint a person responsible for monitoring progress.
C- At the end of the OKRs methodology
13- Determining the compensation and performance of employees from OKRs
It may happen that certain obstacles beyond their control, such as a misallocation of the resources needed to implement the OKRs, force them to be unable to reach them. So, if you determine their remuneration from the OKRs, you will create frustration and disengagement from your employees.
14-Not evaluating the achievement of OKRs at the end of the period
It’s a mistake to begin another period without an evaluation of the last one. At the end of the period, you must evaluate your OKR to measure your accomplishment.
What you should never do is define your OKRs and forget them.
In short, the OKRs methodology is a process that allows you to increase productivity, growth, promote better communication and transparency in the daily tasks of your company. It is structured in two parts: ambitious and qualitative objectives and quantitative or measurable Key Results for a quarterly period. Some inconvenient practices hinder their good implementation. However, OKRs remain unavoidable today in the business world and all the companies that use them testify to its importance. Want to set your OKR? Use Happierco to start following your goals.