Most businesses are often looking for ways to define the process from ideation to realisation but what’s the most effective method especially for those in the fast-growth space? How do you take a key business goal or aspiration through to final delivery? OKRs can articulate a company mission and offer a way to accomplish that outcome through layered, measurable benchmarks that demonstrate progress and accountability with each step.
Developed in the 1970s by Intel, they have been championed more recently by John Doerr, an American investor and venture capitalist, with his book, ‘Measure What Matters’ as a highly effective goal-setting tool. OKRs are used by many businesses and organisations due to their simplicity, flexibility and ability to track progress.
OKRs help you set measurable objectives that are specific and although often aspirational are still attainable. Objectives are then accompanied by a set of key results which are quantifiable and measure the progress against that objective or goal. Tasks and initiatives set out in the action plan then add depth to the key results.
OKRs are designed to help organisations reach their long-term goals by breaking them down into measurable objectives and key results and put into practice by many fast-growth businesses.
Speaking to Dharmesh Raithatha, Product Coach and Start Up Advisor, he explains,
If you don’t have a vision or strategy, setting OKRs isn’t going to be enough. However, what OKRs are really good at is empowering your teams and having them focused on outcomes rather than outputs.
How do you establish effective, best practice OKRs in your organisation?
- Setting an objective that isn’t just a key performance indicator (KPI) – you’re setting an ambitious, meaningful but attainable goal that you want to achieve in the next 30, 60 or 90 days and it’s ‘the what’ of the OKR.
- The key results, which is ‘the how’ of the OKR, should always be quantifiable and tracked – measuring the progress towards achieving the objective.
- OKRs should stretch the organisation or team, but not be so difficult that they’re impossible to achieve.
- Create tasks and initiatives for your team help maintain focus and empower them to drive the overall goal.
- OKRs should be aligned with the overall vision, mission and strategy of the organisation. They should not be singular and stand in isolation.
- Keep the number of OKRs small and well-defined. This will keep the OKRs focused and actionable.
- Be transparent with your OKRs. They should be shared with the entire organisation or team, so that everyone is aware of what’s being worked on but also fully part of the process by giving them that clear visibility.
- Have a specific time frame for your OKRs. Whether that is 30, 60 or 90 days. It will help focus all that are involved.
- Regularly review and update the OKRs. The OKR framework should be a living process, with OKRs being regularly reviewed and updated to ensure that they remain relevant and achievable.
Dharmesh added this around what best practice looks like, “When planning and setting your OKRs, allow a full week to 10 days to create and align the organisation around them and then establish a cadence for the whole process of achieving the key results, which in general, should be three or maybe four months from start to finish.
Bake in the progress with your OKRs as well, think about all of the touch points, maybe that’s weekly updates with the team for example. Make sure you do a retrospective afterwards on the OKR process. Follow up to capture any learning so you can better predict where to pivot next time.
And, think about how aggressive you should set your OKRs in the first instance too. Some may seem quite high or maybe even unattainable but they all need to seem a little stretchy.
OKRs are relevant to most businesses, except maybe ones that are pre-product fit as they are not yet fully defined. They work on a company-wide level and at team level. I have been at companies where they have taken OKRs to the extreme and been applied at the individual level meaning that person ends up being micro-managed which doesn’t work. OKRs become out-of-date too quickly to be used at that level. However, in general, they are business-neutral, focused on outcomes and lead to more overall empowerment for everyone.“
By following these principles, you can create effective OKRs through best practice that pushes your team to accomplish that which may have previously been thought of as impossible but through setting clear steps to achieving a specific objective, you have made accomplishable.
To learn more on OKR examples, read our OKR metric.
OKRs offer the opportunity to develop and define key objectives within your business and articulate key results that demonstrate layers of measurements and accountability for your team. By implementing OKRs, you are able to detail what success looks like and how to achieve it for your team and organisation.