Andy Grove is often credited as the father of OKR methodology, which has helped transform the likes of Intel, Google, LinkedIn and many others. However there is very little written material available that provides step by step instructions for setting OKRs.
In this light, we have written numerous articles about the history of OKRs, their spread beyond Silicon Valley, mistakes companies commit while setting OKRs and a few others. We now aim to educate our readers about how to formulate OKRs at the team level.
The theory behind it:
OKRs that are set without first understanding the company Vision and its subsequent strategies, won’t be effective at creating an impact. Sure, the team may succeed in achieving their goals but since these are not aligned with the overall objectives, there is little meaning to it.
For example, if Usain Bolt’s dietician prepped his meals to suit a marathon but the head coach wanted him to participate in the 100 metres sprint! We would never have witnessed the stupendous records that he created, and that too with such ease. Of course this is just an example. For all we know, he would probably have won either ways.
The very first step:
The first step that any company takes is to form strategies that help to achieve its Vision. OKR methodology suggests that these strategies should be broken down into 3-4 measurable components (read this to know how this is done), also called as Company Objectives. Since these are more strategic in nature, they need to be further simplified into tactical goals that a team can set to achieve.
ACME Sporting Co. is one of the leading athlete management companies that represents Jamaica. Their objective is clear: Make sure all Jamaican athletes win a gold medal for all the events they participate in. With that out of the way, they break down this objective into smaller more achievable steps.
Vertical alignment of team goals to Company Objective:
There are various teams involved in making these athletes worthy of winning the competition. Each needs to focus on achieving the overall goal by hitting targets in their respective areas of responsibility.
Dieticians need to make sure each athlete is getting nutrition that is suitable for his or her track event. For distance runners, they need to eat foods that can help them sustain energy throughout the race. Athletes who participate in the 100m or 200m sprints need to eat foods that give them a boost as they spend all their energy in that short span of time.
Objectives: Create a customised diet plan according to every athlete’s track event
- 10% increase in stamina for long distance runners
- 5% increase in speed of sprinters
Team Fitness Experts:
Every athlete needs to be at the prime of their fitness when they compete. A team of fitness experts is tasked with creating a separate routine as per every individual’s strengths and find ways to overcome their weaknesses.
Objectives: Create a fitness routine for each athlete
- 10% increase in individual strengths
- 70% reduction of weaknesses
While the athletes train, care should be taken that they do not suffer any injuries. Even a slight injury can mar the participant’s performance and pull them out of any chance of winning. A team of physiotherapists needs to consistently monitor every participant’s overall health. They can recommend preventive measures such as the right warmup and stretching techniques to prevent common injuries.
Objectives: Maintain every athlete to be at their prime health
- 0 injuries in 3 months prior to main event
- 100% adherence to a strict warmup and stretching routine
Acme doesn’t concentrate only on physical fitness but also on mental fitness of all athletes. They understand that to win, it takes an integration of physical prowess plus willpower to push an athlete beyond his or her limits and win the race. Absence of either could decrease the chances of winning to a great extent.
Objectives: Help athletes maintain their mental health and focus on winning
- 80% reduction in stress levels
- Less than 5% deviation in sleeping patterns
Team Sporting apparel and gear:
After all these efforts, would the athletes still win if they aren’t equipped with the right gear? The gear is an extension of the athlete’s body. Without proper gear, they will have a distinct disadvantage.
Objectives: Provide the right gear for every event
- Reduce wind resistance by 50%
- Increased grip of footwear (spikes) by 20%
- 100% sweat absorbent jerseys to reduce irritation
Cross functional alignment of team OKRs
All the teams that are mentioned, cannot work in isolation. Each one needs to collaborate with the rest and combine their efforts so that all the athletes get the highest level of inputs to succeed. If these athletes train really hard but are not getting the right diet or are unable to recuperate, it is certain they won’t be able to take on their competitors. Every team’s goals are interdependent. The success or failure of a single team can affect the entire company’s performance levels.
In the end, Acme is able to create winners out of all the Jamaican athletes thus assuring each one a gold medal in their respective events.
Similarly, this analogy applies to all organisations. The hypothetical teams that are mentioned here (nutritionists, physiotherapy, etc) are akin to Finance, Marketing, Product, Sales and others. Once you understand the methodology, efforts should be taken to align the efforts of all these teams in one direction: Achieving the Company Objectives. Not doing so will only hamper its growth, despite making use of one of the best goal setting frameworks.
For example, the product department may create one of their most inspired products. But if they are not familiar with what the target market desires, the products will not be able to create any impact. The product department needs to collaborate with the sales team as well as the marketing team to understand the pain points of their audience and design their product accordingly.
Important note: The process of setting up OKRs is as much important as achieving them. Making it as inclusive & open as possible will bring you one step closer to success. However, it would be too much to expect 100% adoption & success rates in the first go. Do not be discouraged. No matter how theoretically strong you become, things tend to change in practice. Always keep room for trial and error and try to avoid these common OKR mistakes. Once you get the hang of it, you will automatically get better at setting OKRs.
- The correct sequence of setting goals is Strategy > Company objectives > Team > Individual
- Always make sure team goals are aligned with company goals
- Collaboration between various teams helps to increase chances of creating a better product
- OKRs need a few trial and errors before you get them right