Objectives: Objectives define specific end results that are to be achieved after taking a set of steps, within a specific time duration. Simply said objectives answer ‘what, where, when and by whom’ – questions essential for reaching the pre-planned targets. Objectives are at company level as well as individual and team level. Of course, if the team size is small enough companies can skip the team level altogether.
Key results: Key results are the measurable and actionable ends achieved in order to successfully complete an Objective. The intent here is to set key results that are difficult to attain yet not impossible. There are various takes on whether stretch goals are effective or counter-effective but companies can certainly decide this for themselves. An expected achievement percentage is 70 whereas if 100% key results are achieved then it is deemed they weren’t ambitious enough. Key results vary from employee to employee across all the departments but in the end, they are designed to collectively achieve their respective team’s goals & consequently company goals.
Let us continue with the example we started in the first section. ‘Increase profitability’ is a company objective. In the image above, this objective is accompanied with 4 key results. Do observe that all the key results are measurable (either some sort of numbers or complete/incomplete type) as well as actionable.
Depending on the team size relationship amongst OKRs varies. e.g. For a small team, ‘Grow revenue by 40% month on month’ can be a team objective whereas for a mid-sized or large team it can be a key result for a company level objective and this key result is receiving contribution from multiple related team objectives. Thus it is not necessary, especially for the small teams, to have key results defined for all the company & team level objectives.
Key takeaway from the illustration above is that Objectives & Key results in many a cases can be used interchangeably, as long as the fundamental philosophy of pursuing measurable targets is followed.
Alignment (or Cascading):Goal alignment is a key aspect of OKR philosophy. Top priority for the management is to set goals at Company level and align them further with team goals and individual goals. Contrary to popular perception, at least 40% OKRs are recommended to be set from bottom to top. Meaning, rather than dictating to the team members what they should do – goals are set after collaborating with them & taking into account their own thought process behind how they can help the company achieve its goals. This is in line with ‘Transparency’ & ‘Collaboration’, pivotal values of the OKR goal setting method. If one employee fails to achieve his, the team will not be able to achieve their target. So while everyone may have a different goal, they are all interdependent.
Looking at the example above, this alignment can happen directly between any two levels of objectives or through key results of the corresponding objectives. e.g. in case of small-sized company, team objective is directly aligned with the company objective whereas individual objective is aligned with team objective through its key result.
UpRaise treats a Key Result as unit building block. If a KR needs to be further distributed & aligned with different objectives downstream, convert that KR into an objective. To rephrase it, if it needs to be further distributed it is an objective.
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