What are OKRs?
OKR stands for Objectives and Key Results and is a goal-setting method which lets each person in a company add goals and/or initiatives in their work. Each person sets up OKRs, often described as a ”future desired state” (objective) and then lists a set of effects that are needed to achieve that desired state (key results).
OKRs are set quarterly and are often made transparent by making them public to the whole company. Updates are made continuous during the quarter, both by the individual holding the OKR (”check-in”) but also by other colleagues and boss (as feedback). OKRs should be set aspirational and is well suited for driving change and engagement in an organisation.
OKRs have gained a lot of traction since it is the goal setting method used by Google which described it as ”imperative to our success”. OKR is as much a leadership method as it is a goal setting method, where the responsibility of setting, describing, reflecting and feedback around current objective is as much the individual’s responsibility as it is the manager’s. Managers are often better suited in taking a coaching approach than a strict command/control approach when working within the OKRs system.
Hence, OKRs is often used as a simplified approach when you want to go from annual performance reviews to a more agile/continuous process where a dialogue around the individual’s development and contribution to the company vision is an ongoing thing. The leadership perspective is often tied to similar perspectives, e.g. Servant Leadership.
An OKR consists of one Objective and several Key Results.
OKRs has two components, a qualitative part; The Objective, and a quantitative part; The Key Results. The Objective has one or several Key Results connected to it. The Objective could be best explained as the desired future state to which one wants to take something. The Key Results are the results that needs to happen to reach that future state.
Benefits of OKRs
OKRs are a light-weight approach and at the cutting edge of modern goal setting. OKRs can be used to execute a company’s vision by visualizing and engaging an entire workforce to create clear initiatives towards the company’s plan.
Implemented in the right way, OKRs can create strong routines around prioritising and focus in the company. It disciplines thinking of what, on an ongoing basis, is the most important objectives to focus on.
OKRs is different from other goal setting frameworks like BSCs, KPIs, OGSM and SMART goals whereas those goals are often set and then you go back to work, while with OKRs the work starts once you have set them. It could be defined as a critical thinking framework in the sense that you constantly asking questions like ”how do we know that this is our right objective” or ”if we do this task x, what is the intended effect it will have towards the business, and why is that important?”
Above all - OKRs gives each employee a clear place to express, get feedback and develop initiatives which gives them the power of making a difference.
OKRs for the individual, team or company level?
In its strict construction, OKRs is basically a way to set puplic, very ambitious, goals with an Objective and a couple of Key Results. They create a clear image of where you want to go and which results that needs to happen in order to get there. Hence, it can be tempting to set OKRs not only on the individual level, but also use it for the overall company goal setting by setting team- and company OKRs as well.
Our recommendation is however that this is something to avoid. OKRs are great for company wide goals, it is also great for individual goals. Mixing the two together, not so great.
With more thant six years experience implementing OKRs in various team and companies we have found primarily two challenges with including team OKRs and company OKRs in an individual OKRs goal setting:
1. It slows down the speed in the organisation.
Setting company OKRs, then from these set team OKRs and finally letting individuals set OKRs from these team OKRs is a widespread adoption of OKRs, but as most top-down approaches this becomes a very teedious exercise, where each level must wait for the previous level to finish. The intent is to create a clear alignment between different teams within a business area och between different functional departments within a company, but the precision that is anticipated from the approach is seldom reached, and it comes at the cost of employee’s engagement. Often times it becomes a mathematical exercise at best and a energy draining control-for-report-tick-the-list exercise whether the underlying OKR is a fit towards the overlying OKRs. This is not the value of OKRs.
2. Team-OKRs eats individual OKRs for breakfast
The true value of OKRs is to get all employees engaged in the work of developing their contribution towards the organisation, and this effort is hard, and needs investment in time for each individual to test and expand their OKRs from time to time. With our experience, having a team OKR is in this context a dampening factor towards this development. People can still align their OKRs upwards (eg. to their boss’ OKRs) but the delicate freedom and responsibility of letting each individual expand their OKR shouldn’t be undervalued.
OKRs - getting started
Begin by asking yourself why you want to work with OKRs. Is it to get everyone in the company pulling in the same direction? Is it to handle the Planning, Development and Development (PDR) of your staff? Or is it simply that way you are doing it today just isn’t working today and you want to find a better way.
Regardless of the reason why, it could always be a good idea to describe to yourself what the hypothesis of implementing OKRs is and then test this hypothesis by rolling it out to a pilot group in the organisation. Node, along with consultant partners of Node, has helped companies getting going with Pilots like this - contact us if you want to learn more.
Don’t get caught in too much preparations
Important questions like the company long term vision and plan is common when you start to look into OKRs and how you should set them in your company. Be careful avoiding these discussion taking over and delaying your roll out of OKRs. OKRs is at first and in all simplicity just a way for each individual to set their most important initiative (objective) and then describe which effects that needs to happen in order to reach this objective (key results). The critical milestone to reach in this is to get a majority of people in the organisation or team to set OKRs and then reflect and keep an ongoing dialouge around them.
In our experience, it will take an average of 6 iterations of reflections and discussion for each person before the OKRs starts to make sense for them. It is hence not the ”setting” of OKRs that makes it valuable, but rather how you reflect and connect them in to your everday-work-life.
Objectives should be scary aspirational.
"Shoot for the moon" is common OKRs-lingo, and comes from the fact that OKRs should be set highly aspirational. The thought behind this is that OKRs is not your standard KPI metric, but rather something that is intended to bring new growth and innovation to the company, and to achieve this - you must push the envelope. With the right leadeship, this aspiration can lead to a much higher level of engagement as well, since we humans are all driven by aspiration.
Don’t be too hard on yourself when setting key results in the beginning.
Key Results are not the same as tasks and setting activities. A key result is instead the underlying reason to why you should do certain tasks, the measurabel effect if your work that is of value to your business. But what happen if you can’t come up with a single key results at first? Here’s where most OKRs implementations get stuck in the beginning, and our recommendation is that if you have a hard time finding out your key results, then set key results that are aimed to figure out what metrics really matter in your line of business. You can even set tasks, and then check in on what actual effect these tasks are having and then in the next quarter translate these tasks into true key results instead.
Final note - OKRs isn’t a silver bullet. As with most things it needs a good portion of dedication and leaderhsip in order to create real change in your company. It needs investment in letting each employee work with OKRs. So remember to invest in time for check ins and 1on1s between people. If you do, and do so for at least 6 months, we are certain that OKRs can take your company and your people’s engagment to whole new levels.