A Quick Guide to Effective OKRs

OKR's can be great to align the team on strategic, critical work. They allow a more focused and team-based approach towards goal setting where everyone is on the same page to achieve maximum, high-impact results.

OKR
Objectives and Key Results

OKR’s may seem like ordinary office jargon (OKR is literally an acronym), but actually, OKR or “Objectives and Key Results” is a goal-setting technique that sets challenging goals-against measurable actions. It is used by companies- operations, software, product, marketing, etc. to implement strategy and execute it. OKR allows setting goals, track their progress, and alignment against to achieve measurable results.

Where did OKR’s come from? Who is using it now?

Before I go on and on about OKR’s, a background would be essential to understand OKR’s better. This story involves 3 people- 1. Peter Drucker founded MBO’s, 2. Andy Groove, who gave OKR’s (at Intel) and taught them to John Doerr. 3. Jon Doerr- who gave the acronym ‘OKR’ and introduced it to Google’s founders.

Now, the plot: The framework of what would eventually become Objectives and Key Results came from Intel, where Andy Grove implemented Peter Drucker’s Management by Objective system (MBO’s). OKR’s foundation is based on MBO’s. A critical difference between OKR’s and MBO’s is that OKR’s are quarterly, and OKR’s are not tied to compensation.

John Doerr, who learned this from Andy Grove, named this entire concept ‘OKR’ and introduced this philosophy to Google’s founding team in 1999. Google adopted this to set their company’s strategy, and if you’ve googled this, you know the rest is history!

Additionally, many big names have adopted OKR’s- LinkedIn, Netflix, Amazon, Spotify, etc. They have used OKRs to manage their company’s goals, and the alignment has allowed them not merely to survive but thrive at their goals.

Let’s go back to the basics.

What is an OKR?

OKR’s are a goal-setting methodology that helps employees prioritize, align, and measure the outcome of their efforts. OKR helps companies bridge the gap between strategy and execution and move from an output (short term, direct result) – to an outcome-based approach to work (effectiveness).

OKR INVOLVES- OBJECTIVES, KEY RESULTS, AND INITIATIVES.

In this, we will discuss the 3 main aspects of OKR’s and how to write effective objectives, key results, and initiatives. 

1. Objectives: An Objective is a description of something that you’d/ the company would like to achieve in the future. An Objective sets the direction. Objectives shouldn’t be technical and shouldn’t contain a metric so that everyone understands where to go- thus, qualitative. The best-written objectives are ones that the team understands. The objective is the goal set which is usually time-bound (quarterly)

Best practices on setting Objectives:

a. Speak the Team– CEOs and Managers may get ticked with words like 5% traction or conversion, but we mere mortals speak in terms of progress and growth. Thus, objectives should be set in the ‘team’s language’- everyone should be on the same page, to begin with. If the team believes in ‘kill it,’ ‘awesome,’ then use it. If they want ‘transform’ or ‘growth- do that. The objective should speak for the team.

b. Time– Objectives should be team bound- mostly quarterly. The objective should have a precise time and should be set to be doable in that time frame.

c. It should be for YOUR team– Objectives should be set such that it doesn’t find its way to blame other teams/departments in case of failure. It shouldn’t read as ‘Marketing team failed to capture market’ or Sales failed to sell. The objective should be doable- in a time frame by the team who have set it.

Examples of a good objective:

  1. Launch an MVP that Product Managers will like.
  2. Be a top place to work in India.
  3. Empower our support team to be more self-sufficient.

Examples of Bad Objectives:

  1. Employee Engagement increase by15%.
  2. 5 million revenue
  3. 3x customer outreach.

Why are they wrong? Mainly because they look like Key results rather than Objectives.

Objectives are NOT a commitment- they are just giving a direction, so everyone is on the same page

2. Key Results– Key results are measurable outcome which is required to measure the objective. It usually contains a target value, and it is quantitative. It is a way to measure progress towards the objective. The critical results show much close you are towards achieving your objective.

Key results can measure growth, performance, revenue, performance, quality, or NPS.

Best practices on setting Key Results:

  1. Specific- Specificity works in Key results because it’s a measure of how close you are towards achieving your objective. The more defined and focused the Key Result, the better it would be to set initiatives.
  2. High Impact– Key results are better when it reflects significant changes. Key results which are challenging to achieve + high impact= better. Instead of 10 blogs, make it 1000 views on each blog. This makes the Key result high impact, challenging and influential. But it is important to note that the key result should be challenging but not impossible. Stretch, but not as far as you feel pain. Setting goals too hard, and the team may burn out and quit. Set them too easy, and the company may become weak and die.
  3. Initiative- Initiatives are all the projects and tasks that will help you achieve a Key Result. Initiatives are descriptions of what you’d do to achieve the key result. The initiative is – what can be done to get there. Regularly checking in with your Key Results will help you decide whether your Initiatives have delivered the desired results or not. If they haven’t, you should think about changing your Initiatives.

Best practices on setting Initiatives:

  1. Specific– Initiatives should be specific, clearly defined with ownership that is established. It should contain crisp verbs (the plan of action).
  2. Controllable– Complete control over initiatives is the key. This means there should be no dependencies on something or someone else. It also means that you can be held accountable for not completing your initiatives.

How to set good OKR’s with Examples:

Eg1: ->Objective– Make the customer support team more self-sufficient.

->Key Result– Reduce tickets by 10%

->Initiatives– Create a guide on the 20 most frequently asked questions.

Eg2: ->Objective- Be a top place to work in India

->Key result– Reach top 10 in ABC magazine’s Best startup to Work at in India.

->Initiative– Hire a People & Culture Manager.

WHEN TO BUILD OKR’S?

OKR’s are not for everything. They are not for people management or control. Nobody likes micromanagement. OKR’s exist to make sure the team is on the same pa

They are just for making sure that critical strategic work is done. (software management). OKR’s work best when COMMUNICATING strategic questions or measuring hypotheses which you’ve derived (read: In the Eisenhower’s matrix on Important- Not Urgent) part and set an OKR around it. Do OKR’s around things you want to do but often don’t, or they seem non-urgent. An OKR around something you’d manage anyway is pointless.

For example: why build an OKR around electricity bills? You’d pay that anyway. Instead, creating an OKR around writing a draft would be more actionable, which you tend to procrastinate.

Additionally, In a team, Everybody decides the OKR’s. You should learn to trust people with OKR’s. Empowering people is how you keep your A players. If (incase) things go sideways -> you coach, OKR’s cannot be the metric to judge the entire team. Hire good people, and trusting them is the key. OKRs just exist to make sure things are aligned.

Further, OKR is not a ‘commitment.’ If you’re committed to a project, you’re stuck with a project. But if you commit to a result, you have the flexibility to adjust as you get new information. OKR’s allow that flexibility, and that is one of its key advantages.

If you cannot choose between what is critical strategic efforts, try sequencing. Are there things you could do first that would make another effort more effective? Should you improve the customer experience before spending a bundle on advertising? And if that doesn’t work, try to narrow them down to as few as possible and rank them by importance.

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  2. OKR’s: OKR’s can be great to align the team on strategic, critical work. Further, they allow a more focused and team-based approach towards goal setting where everyone is on the same page to achieve maximum, high-impact results.
  3. 360 Performance review– 360 Performance review can be highly beneficial as it is holistic, compares your perception vs. other’s perception, and reduces bias in performance reviews.

Making your team feel a-OK with OKRs can be game-changing. As managers, we must make sure the team is aligned but not micromanaged. OKR’s help you achieve just that. Trust your team and trust their OKR’s.

Anushka Vaishampayan

Yes, I study Psychology. No, I cannot read minds.

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