Have you ever had a feeling that you’re doing a great job, giving a real effort, but in the end, your work isn’t appreciated or, even worse, feels like a total waste? If it seems familiar, there is a great chance that your company is missing a business objective management system.
Studies have shown that committing to a goal can help improve employee performance. But more specifically, research reveals that setting challenging and specific goals can further enhance employee engagement in attaining those goals. Business objective management system “Objectives and Key Results” (OKRs) can help you set ambitious goals and track progress.
“Never tell people how to do things. Tell them what to do, and they will surprise you with their ingenuity.” - George Patton
In practice, using OKRs is different from other goal-setting techniques because of the aim to set very ambitious goals. When used this way, OKRs can enable teams to focus on the big bets and accomplish more than the team thought was possible, even if they don’t fully attain the stated goal. OKRs can help teams and individuals get outside of their comfort zones, prioritize work, and learn from both success and failure.
OKRs is an easy but very effective technique. By the start of the year, there should be announced 3-5 company-wide OKRs to communicate company strategy to employees in an actionable, measurable way. At the beginning of each quarter, teams define their OKRs that should help to reach company-wide OKRs by the end of the year. Every team must track their active progress weekly against their Objectives.
An OKRs consists of an Objective, which defines a goal to be achieved, and up to 5 Key Results, which measure progress towards the Objective. Objectives should be quantitative but Key Results need to be quantitative/measurable. Here you can see an OKRs example:
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Objective: Launch a New Product
- Key Result: Achieve 1 000 000 EUR income
- Key Result: Reach 7% weekly growth rate
- Key Result: Reach 50 000 active users
After the quarter every team should grade their OKRs assigning grades (in scale 0.0-1.0) to each Key Result. E.g., if the goal was to reach 50 000 active users but in reality, there are only 30 000 that means the Key Result is completed by 60%. The sweet spot for OKRs grade is somewhere in the 60-70% range. Scoring lower may mean the organization is not achieving enough of what it could be. Scoring higher may mean the aspirational goals are not being set high enough.
Before you start using OKRs it’s important to have a clear understanding of the challenge you want to solve or to put it another way, the Business Objective you’re hoping OKRs will help you achieve. For most organizations, OKRs solves the challenge of executing business strategy in a way that’s clear to all employees, transparent and measurable. You will be amazed, how common goals and vision can result in great achievements.
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