Goals typically fail for several reasons, the main one being they lack purpose or a tangible reason why they have been set in the first place. If you don’t honestly believe in a goal or have an emotional attachment to why it’s been created, you’ll either lose interest or only do the minimum to deliver it.
There are several other reasons goals can fail, including:
- The goal is too ambitious and so far from being achievable that there is no point working on it as you feel you’ll never achieve it.
- The goal completion target is so far off into the future that you just put it off as there is no urgency.
- The goal isn’t specific enough and so vague and hard to plan for as they may sound great, but you’re not sure how you’ll achieve them.
OKRs can provide the structure and direction you need to achieve your goals, whether you’re a company or an individual.
They create the purpose and direction you need to achieve and work towards, as well as offer strategies for how you’ll measure your progress, success, and then ultimately the initiatives to get you there.
Where OKRs work better than a single goal approach as they link everything together.
At the highest level, you have your company vision; below the vision there is the annual OKRs (3-5); then below these come the quarterly OKRs.
Each one is serving the next and is being achieved by all the initiatives (the work) being delivered by the teams and individuals day to day, week to week, and month to month.
Table of Contents
- What Is an OKR?
- What Makes a Good Objective?
- What Makes a Good Key Result?
- How to Create an OKR
- How to Track OKRs
- How to Adopt OKRs
- The Bottom Line
- More Tips on Objectives and Key Results
What Is an OKR?
OKR stand for “Objectives and Key Results” and was initially created by Andy Grove in the 1970s while at Intel. Since then, OKRs have been taken on and used by companies like Google and Netflix.
OKRs are a collaborative way to create goals for a company and individuals as they are not only ambitious and inspiring but also achievable.
OKRs were not only created to set objectives for companies but also to improve collaboration, engagement, and transparency between senior management and its employees. Having shared objectives throughout the company brings the whole workforce together to work towards common goals and then celebrate together when they’ve achieved them.
The objective within an OKR is the outcome you’re looking to achieve, and the key result is how you’re going to measure whether the outcome has been achieved.
Key results are what make OKRs measurable; they tell you if you’ve been successful with the objectives set up front as, without them, the success of an objective can be left open to opinion.
History of OKRs
OKRs were first introduced by Andy Grove in Intel, the co-founder of Intel and former CEO. It was brought up in his book “High Output Management”.
That philosophy was adopted slowly into business over time. It slowly became popular among other Silicon Valley companies, Google included.
Google was the next major one as John Doerr, someone who worked at Intel under Grove’s leadership, suggested using this method. The key difference was setting OKRs every three months.
Eventually companies like Amazon, Twitter, Spotify, and others created those tweaks in OKRs to fit company needs. The concept was adopted overall, but at this point only the core concepts of Grove’s initial concept remain.
What Makes a Good Objective?
Objectives tell you where you need to go and should inspire and set the direction.
When defining the objective for your OCR, it has to be clear, well-written and free of doubt about what the outcome of the objective is.
An objective should always be an outcome that you may not initially know how to achieve, but you understand what the outcome is you’re looking to aim for.
It also needs to be balanced in how achievable it is. If the objective is to achieve 100% market share in your industry, that is not only too ambitious, but it’s very likely to be impossible.
You could also make the opposite mistake and make the outcome of the objective too easy (for example, increase our market share by 1%).
If the objective is too easy, too hard, or impossible, you’re wasting your time creating it as it offers no value, and ultimately the team will pay no attention to it and lose faith in the overall approach.
What Makes a Good Key Result?
If the objective sets the direction you want and defines the outcomes you need to achieve, you can think of the key results as the milestones to get you there.
The key results are how you’ll track progress so you can quantify and measure as you go to make sure you’re on track to achieve your chosen outcome.
If the objectives are well-defined and thought out, the key results are what keeps the team motivated and focused. This is because they’re measurable. Once complete, it can be a tick in the box to show not only progress, but also celebrate the success you’ve achieved.
These small, significant milestones keep the teams and individuals motivated, especially when working with quarterly objectives.
The vital part of creating key results is that they’re measurable. There should be no doubt if you’ve achieved a key result or not. For example, if you have an objective of “Increase revenue this quarter by 5%,” one of your key results could be:
“Sell 100 of our new training courses.”
If you’ve only sold 80 training courses, then you only achieved 80% of that key result.
How to Create an OKR
An OKR consists of an Objective, which defines what you’re trying to achieve, and up to five key results. The key results are how you measure if you’ve achieved the objective.
Under the key results, you also have a set of initiatives, which are the activities or the work required to achieve the key results.
You create OKRs to set the overall direction for a company and create the alignment needed, so every employee is working with the same shared purpose.
While we will be discussing OKRs mostly at the company level, keep in mind that individuals can also use them for life planning.
A company typically has a single vision or a mission for the company, and this direction you want to move towards could be set for the next decade or even longer. This is the ultimate purpose that aligns your company’s employees and, in some cases, your customers on why you do what you do.
This vision sets your direction, which then allows the creation of the company OKRs, which are set annually. These 3-5 OKRs are the objectives that will move your company closer to that overall vision and are specific to what outcomes you need to achieve in the next 12 months.
Each company OKR has clear key results (up to five) that are measurable, so you can track progress and measure success. These company objectives encompass all parts of the business and can overlap over multiple departments.
The departments within the company then set group OKRs, which are set quarterly using the company OCR’s as the direction. Again, like the company OCR’s, they all have key results defined and agreed on so the departments can measure progress.
Tips On How to Write OKRs
- Writing OKRs is simple if your familiar with SMART goals. The formula goes like this: Objectives are your goals and intentions, while the key results are the time-bound and measurable milestones under those objectives.
- Stick with one objective and three key results if you need specifics.
- Objectives should be ambitious and inspirational, concrete, action-oriented, and not fuzzy.
- Describe the outcomes and not the activities themselves.
Examples of Different Types of OKRs
Seeing OKRs as a unit – something that can’t be separated from one another – it starts to become easier to see various types of OKRs. Below are some examples of different types of OKRs
- Committed OKRs – This is where the goals that everyone agrees needs to be achieved. Without them, there is no success. Prioritizing them means that the company will grow.
- Aspirational OKRs – Consider these as audacious goals. They require teams to stretch past what they typically do. It’s tougher, but they serve as a tool to push teams to think and act differently and get out from beyond their comfort zones. The concept argues even if you don’t complete the goal, the fact the team and individuals made an effort means they pushed much farther than setting a mediocre goal.
- Learning OKRs – These focus around explorations, experiments, and trying to prove hypotheses. It’s about reporting findings or proving or disprove certain notions or beliefs or theories. These are ideal in the early stages where inputs and outputs aren’t clear.
Common OKR Mistakes
Like with any goals, people do make common mistakes when setting these up. Some mistakes you want to avoid are:
- Forcing people to be setting OKRs, or heavily influence their own objectives.
- Starting from the bottom and working up rather than setting from the top down.
- Setting too many objectives or key results.
- Mistaking tasks as key results.
- Using OKR as a compensation program or a performance review system.
- Setting an OKR and forgetting about it.
How to Track OKRs
OKRs must be tracked and reviewed regularly.
The direction of the company, although this is an ongoing activity, is typically reviewed annually, but the company OKRs need to be reviewed quarterly.
A quarterly review would entail looking at the progress of the key results defined at the start of the quarter. These key results tell you if you’re going in the right direction through measurement and progress tracking.
A quarterly review also gives the teams a chance to review the OKRs when it comes to the value they’ll provide the company, the staff, and its end users.
What you created three months ago may not hold the same value today. Discuss the value of the OKR. Is it still pushing you towards the overall company vision, or do you need to change or potentially create a new one?
To review OKRs at the team level and the initiatives in place to deliver them, you need to meet at least every two weeks or even weekly in some cases.
Meeting regularly follows the same principle as the quarterly and yearly review as you look at how are you progressing. What is working and what isn’t?
How to Adopt OKRs
There is no specific method to implement this in a business aside from the core concepts. As such, follow these steps to implement it:
- First, communicate. You want to ensure everyone knows about it and is willing to use it. Ways to communicate this concept shouldn’t just be restricted to an email. Conduct workshops, bring it up in meetings with the entire company. You want engagement so talk about it.
- Second, have a tool to adopt it. There are various tools to help you manage your OKR. In some cases it can be a spreadsheet that you’ve put together or you can find specific software devoted to managing it. Happierco is one.
- Third, organize. OKR is set during a specific time frame much like any goals. For many businesses, they set it quarterly, but you’re not restricted to that. It can be monthly or even yearly. Whatever works best for your business. To help with organizing as well, ask yourself these questions: What I have to accomplish? ; How am I going to get this done? By asking those questions, you’re setting your objective and key results respectively.
- Fourth, set company OKR. Company OKR is important to do first and should be done by the CEO or someone in upper management. Essentially someone who knows what’s most important for the company and has access to the bigger picture.
- Fifth, set team OKR. With company OKR in mind, you’re able to set team OKRs after. They can be boiled down to team priorities and can be found by first having a meeting with team managers and then having those team managers go back to their respective teams to define said priorities.
- Six, set individual OKR. With all the knowledge in mind for the company, individuals will be adequately prepared to set their own individual OKR. This will be based on the team priorities and will specify what each team member will be working on.
- Seven, review. Before work even starts, it’s helpful to review everything and ensure individual OKRs fit together with everyone else’s. This is essential as every single OKR has to be aligned and connected in some fashion.
Advantages and Disadvantages of OKRs
- OKRs encourage people to set ambitious goals. It’s not always about what’s obtainable but how close you can get to completing the objective.
- OKRs are more likely to be reviewed often in business environments. You typically set them every 3 months.
- OKRs are quantitative in nature. Several goal-setting methods focus on the goal itself rather than how you get there.
- OKR allows more freedom for people to design their own objectives and results. This is due to the inherent nature of adopting OKRs.
- OKR is separate from any kind of compensation. It’s somewhat of a performance metric but allows people the reduced pressure of it being a performance metric if that makes sense.
- OKRs relationships aren’t always obvious. It can be difficult to see how one person’s objective connects to others’ objectives.
- OKRs can get lost in translation easily. It’s easy for team managers to design OKRs and have them not align with the organizational priorities. Even in cases where they are clearly communicated.
- Key results can be too prescriptive for some people and lead to them being demotivated. Even in cases where they were previously engaged in the objective.
- It’s easy to set too many OKRs and get overwhelmed.
What Is the Difference Between OKRs and KPIs?
The key difference between these two is the intention behind the setting of the goal itself. KPI goals are usually pretty obtainable and represent an output of a process or project that’s already set. OKR goals are usually more aggressive and ambitious.
List of OKR Tools
There are several tools to consider that help with setting OKRs. Here are some:
- CultureAmp – helps with identifying goals.
- Koan – helps with making OKRs transparent.
- Weekdone – simplifies OKRs altogether and keeps everything in sync.
- Perdoo – sets OKRs, bringing you through the step-by-step process.
- Engagedly – provides inspiration to create and track objectives.
- SimpleOKR – provides feedback and reviews of OKRs
- Peoplegoal – scores OKRs which helps in the evaluation process.
- ClickUp – helps with managing all OKRs efficiently.
The Bottom Line
OKRs are a great way to adapt your goals into a more structured and trackable format that will keep your goals on track.
The OKR approach gives you the ability to separate your long term and shorter momentum goals so you can stay focused and interested throughout the year.
Making them measurable by creating key results allows you to track progress through to completion, which is a great way to stay motivated and push to complete more.
Like standard goal-setting, if you don’t invest the time up front to create them correctly, you’ll either lose interest, or they wont deliver the value you had hoped for.
To be successful when implementing the OKR approach within your company, don’t have too many, make them transparent, make sure your teams are aligned, and check progress regularly.
If you do all of this, you’ll give yourself the best chance to reach your goals.
More Tips on Objectives and Key Results
- What Are Smart Objectives? (And How to Use Them)
- 10 Questions That Will Improve Results in Any Area
- 11 Reasons Why You Aren’t Getting Results
Featured photo credit: Kaleidico via unsplash.com
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