What are OKRs
OKRS: A comprehensive overview
The chequered history and the exciting future of Objectives & Key Results
The whats and hows of OKRs
Objectives & Key Results (OKR) is a goal setting framework used by organizations of different sizes – startups, scaleups, established businesses and others. It provides fundamental tenets for organizations to create their own goal structure, without defining processes set in stone. Teams are free to take it up & flavor it to Re-architect work.
Brief history of OKR
Around since 1970s and adopted by various technology giants like Intel, Google, LinkedIn, Oracle and Twitter among others, OKR has been very efficient in defining objectives and breaking them down into easily measurable key results. In the current scenario where work as we know is transforming, changes in talent pool, engagement models, cognitive tools are accelerating shifts in how organizations perform and excel. Work From Anywhere (WFX) is creating the rise of the “augmented workforce” with Gen Z forming a significant part of that workforce. This calls for organizations to Re-architect work to adapt and learn for future growth, and OKRs help in achieving these goals.
While OKRs are essentially a re-branded & tweaked version of traditional goal setting methods (such as MBOs), these tweaks bring the best of traditional goal setting approaches to meet the needs of the contemporary workforce.
Beginner’s Guide to Objectives & Key Results
How can OKRs help
|Reason behind the need||Need of the contemporary Workforce||OKR tweaks that work|
|In the information economy, it is a daunting challenge to put all-encompassing processes in place, unlike the post industrial revolution world where discipline & structure came from optimised processes & assembly lines.|
Disciplined & structured thinking
|Ensuring as much transparency as possible through publicly available organisation goals, OKRs provide a way to always keep the larger picture in sight.|
|With emails, chat applications & umpteen collaboration software running the workplaces, it’s easier than ever to miscommunicate & misinterpret.|
Crystal clear communication
|Concise ways to communicate priorities. OKRs recommend not more than 3-5 top priority items to be focused on at a time. Additionally, alignment brings in the much needed visibility into the bigger picture.|
|Nowadays the shared goal can have 100s of manifestations based on personal inferences, perceptions & preferences, as opposed to the times where the shared goal used to be very tangible – like an automobile, a mechanical engine etc.|
Aligning efforts to reach a shared goal
|Cross functional collaboration managed through transparency & alignment.|
|In the knowledge economy, definition of success & failures become pivotal as these successes/failures are not self-evident to the workforce unless they are at a large scale.|
Remove ambiguity by defining measurable success & failure
|Key results. Make every objective measurable by means of key results. No space left for interpretation.|
|In the ever changing world of technology, if companies do not move at fast pace they will be run over by players disrupting their industry.|
|Aiming for the moon. OKRs promote setting uncomfortable & stretch targets.|
Planning for OKRs
Adopting OKRs in an organization isn’t an easy task, but the upsides of implementing them successfully are many. From resistance to change to lack of resources, many factors can derail OKR adoption – but strategic planning can help in identifying such roadblocks and allow organizations to move ahead smoothly.
While finalising the results an organization wants to see from its OKR practice, it is essential to identify the starting point. Thorough organization-wide research can shed light on shortcomings and issues that need to be addressed before OKRs can be set.
Since OKRs of employees need to be aligned with that of the organization, having a powerful vision and mission statement is a must. If these aren’t adequate, then the corresponding objectives and key results of employees may not have any effect on their performance.
Training the teams
Once the shortcomings and roadblocks are identified, the time is right to implement OKRs – but before that, employees need to understand why they are shifting to OKR-based performance management. Managers and leaders need to understand the need for OKRs first, and then they can help their team members understand the same. A combination of in-person training by managers, and self-paced learning through online courses (or OKR workshops) can bridge the gap.
Developing OKRs strategically
Before setting OKRs that individual employees in the team can adopt in their own way, managers should discuss the possibilities with key stakeholders in the project. These discussions will provide a deep understanding of the task and can allow managers to interpret objectives and key results better. They can also help their team members set their objectives with authority.
Creating strategic implementation plans
Once OKRs are planned strategically for the organization (or teams), implementing them is the next step. For that, organizations need to have a strong strategic implementation plan that is aligned with the objectives of their employees. This involves reinforcing the best practices that suit the organization so that adoption rates go up.
Objectives are measured against their corresponding key results, which have a definitive number attached to them. However, having a Key result and sticking to it may not guarantee the success of OKR: managers (and team members) should constantly keep track of the progress and get feedback on the same.
How to implement OKRs?
Implementing OKRs allows organizations to innovate better and plan their processes efficiently, but making it another tool that employees need to use can nullify the effectiveness. Here are a few ideas to make the implementation process easier for managers and employees alike.
- Starting small and defining clear objectives is essential to get OKRs off the ground – and creating a pilot program can show the readiness of the organization. Instead of forcing a new process on employees who have more than enough on their plates already, this can show how the principles of OKRs gel with the employees.
- Communication is essential for the adoption of OKRs, as employees need to be assured of their psychological safety before making their objectives known. Managers who understand the goals of their employees can help them align those goals with that of the organization’s, and a continuous (2-way) feedback process builds the confidence of employees.
- Understanding the principle behind setting goals allows employees to stop thinking in terms of deliverables and focus on outcomes. Since the objectives set are considered achieved at 70%, employees need to set goals that are just above their current capabilities – so that they can improve while taking the project forward.
- Establishing a culture of feedback allows employees to be honest with their shortcomings and seek help in those areas, while it allows managers to fine-tune their leadership style. Also, it can highlight minor issues that might turn major in the long run.
Objectives set in OKRs are derived from the top corporate objectives of the organization, and then can be adopted by different teams to support them. Here’s an example of an OKR for a SaaS organization:
|Build software that solves customer problem area||Increase the NPS score by 2 points.|
Get X number of subscriptions for the solution.
Increase customer satisfaction rate by Y%
(OR achieve Y% reduction in support calls)
Reaching the Objective depends on achieving the key results, and the important factors for the achievement to happen are Initiative, score, and ownership.
Initiatives are projects or activities that result in achieving one (or more) of the Key Results. Tasks that form the part of employees’ everyday work can be considered as initiatives when they’re aiding in the achievement of key results. If that isn’t the case, the onus is on the employee and their manager to modify them.
Frequency is the interval at which the progress of OKRs is reviewed. This can be a formal or an informal process, where the employee (or team) and the manager focus on the output and check if it is in line with the overall objective. Changes can be made to the key results if the current ones are not reflecting the required values.
Scores for OKRs are between 0.0 to 1.0, where 1.0 represents a completion of the objective. This should not be the end goal of the OKR process, as a score of 0.6-0.7 is considered ideal. Scores that consistently fall below or above this indicate unclear objectives (lower spectrum) or unambitious ones (higher scale).
Ownership of every key result among team members ensures there is more accountability, alignment and transparency. Having an owner for every OKR simplifies collaboration.
Here are some examples that include organizational level, team level, and individual OKRs.
OKR tools: What is the best OKR software?
Organizations trying to adopt OKRs can choose from a variety of solutions available in the market. Some of the resources are free, some are paid, and some have free and paid tiers that cater to different levels of organizations.
The important factor to consider while adopting an OKR tool is the ease with which it can be adopted by employees. A standalone tool, be it free or paid, is bound to add an extra layer of learning to the workday of employees, and puts the onus on managers or team leads to ensure compliance. Having an add-on app like Upraise for Employee Success can alleviate this, as the app works as an add-on to Jira and can be accessed from a platform that is used every day by almost all teams in the organization. Other apps from UpRaise Suite of Apps can complement it and allow employees to access information easily so that they can make informed decisions. They help employees achieve the level of autonomy necessitated by OKR adoption, and help them track records from within Jira.
Why do OKRs fail
Because of the hype and the profile of organizations using OKRs, sometimes OKR adoption is treated as an answer to a multitude of issues that need to be fixed in the organizations that are looking to adopt the framework. Nothing can be farther from the truth. OKRs can help good organizations move towards greatness, but the basics should be in place first-hand.
But even the organizations that have all the necessities in place, can falter while adopting OKRs. Here are a few major reasons.
Making OKRs truly unachievable
OKRs are designed to be not achievable – but the difficult setting matters here. The goals should be just out of reach so that employees trying to achieve them should put in extra effort in learning and developing their skills. If the allure of ‘almost there’ is missing, it is easy for even the most dedicated employees to get disheartened and give up on their set goals.
Not defining OKRs clearly
Objectives and Key Results need to be specific and quantifiable – so that they can be tracked easily. Objectives can have a degree of vagueness in them, like ‘improve performance of the team’ – but corresponding key results should clearly mention what defines the improvement in performance.
Not following up regularly
The frequency of feedback and review of OKRs is essential for the success of the process. This also means that the environment should be conducive to positive feedback. Keeping a set frequency for follow ups also helps employees to plan and pace their work, and be honest about the issues or successes they have experienced. Managers can weigh in the struggles and successes of their employees and provide them with the necessary coaching (or recognition) to help them perform better.
Having too many goals
OKRs should be achievable, clear, and followed up on regularly – but none of this matters if there are too many of them for the employee to stay ahead of. A good rule of thumb is to have 3-5 objectives (at most), and the corresponding Key Results should be 5 to 6. Anything more than that, and employees (along with their managers) will get overwhelmed.
Preparing for OKRs
The OKR framework necessitates practising organizations to have a few prerequisites in place so that the objectives for different teams can be derived in the most effective way. The first prerequisite is a concrete vision and mission, from which the OKRs can be derived. This allows teams and individual employees to align their goals and targets to that of the organization.
Transparency to a large degree also helps employees set their individuals or team-level OKRs efficiently. Managers can help their team members in understanding how their daily tasks translate into the bigger picture and set OKRs to reflect the same. Some organizations like Spotify limit their OKRs to team levels – while some others insist on Individual OKRs. The flexible nature of the framework enables both methods to function based on the conditions set (or derived) from the organizational OKRs.
FAQ on OKRs
1. Are OKRs useful?
OKRs help teams and organizations set objectives and find the best way to achieve them. The effectiveness of Objectives is measured using Key Results – and reaching 70% of objectives is considered a good performance. Due to their flexible nature, OKRs nudge employees to get more out of their skills and innovate.
2. How is OKR measured?
The Objective part of OKRs is set with the help of employees, who are responsible for achieving Key Results associated with the said objectives. The effectiveness of OKRs is measured based on their completion rates – but these rates are not expected to be above 70%, to ensure the goals set are challenging. Also, OKRs require continuous feedback to be refined and adjusted, so that employees responsible for them have room to experiment and achieve success.
3. Is OKR part of Agile?
The basic principles behind OKRs are similar to the values of the Agile Manifesto. When used properly, OKRs can help organizations function in a more agile way, be responsive to changes in the market, and embrace a growth-oriented mindset.
4. How many OKRs should we set?
In order for OKRs to be effective, they should be precise – and limited in number. Typically, 3 to 5 Objectives are good enough, and each objective can have 5-7 key results associated with it (at most).
5. How is OKR different from KPI?
OKR is a goal-setting framework that helps in managing performance, while KPIs are measurement tools that tell us more about the result. The ‘Key Results’ part of OKRs can be compared to KPIs, as both of them can be used to evaluate outcomes.
Drive Your Company Forward With OKRs
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