Setting ambitious goals is the first step in achieving them, but without a proper plan and strategy – the road to the goal will be challenging. OKRs have been a go-to method of goal setting and planning across software organizations over the last few years. For a good reason: Bigwigs like Google and Adobe have adopted them and reported the model’s success, and companies set up ambitious objectives to be achieved by teams, team members, departments, and the organization. Not all of them succeed, though- ineffective processes, lack of adoption, vague goals – the reasons can be many; this stands to show that even when using OKRs, business objectives can backfire. Instead of looking for another silver bullet, organizations can analyze their goal-setting process and identify areas for improvement. Starting from aligning the entire organization to ensure every employee is heading the same way, the strategies that must be adopted must set clear priorities at every possible step. A Harvard Business Review report from 2015 shows that only one-third of senior executives surveyed took time to communicate the organization’s goals with their teams. While the number is bound to have come down in light of newer working conditions, the lack of coordination across departments still ensures more than enough confusion.
The Objectives and Key Results (OKRs) framework creates alignment among individuals and their managers and helps establish and track measurable goals. They can be categorized into different types – and organizations can choose the ones that suit their working style and culture.
These are the ones that most people who have heard about ‘OKRs’ refer to – also known as ‘moonshots’ or stretch goals. These goals are not set to be achieved and propel teams to find innovative ways to approach them. A 70% completion or success rate is considered excellent in Aspirational OKRs. Having at least one aspirational OKR for teams, individuals, and organizations is good as they challenge the entities to get better. These OKRs are typically kept long-term, so no one feels pressured to finish them in a few weeks.
These OKRs keep teams up to date with the latest technologies by the end of the cycle. These are when organizations need to develop expertise in the previously unchartered territory so that teams can set up relevant vital results that help them learn. These results can create aspirational OKRs in the next cycle, where teams are encouraged to utilize their newfound knowledge on existing or new projects. Learning OKRs can be used to report findings that simplify identifying the future course of teams and organizations.
Tactical and strategic OKRs are similar, but tactical OKRs focus more on low-level tasks, where teams work on individual projects without dependency on other teams. These are usually added to identify and execute features that need to be added to keep up with changing requirements.
Committed OKRs are handled by teams and are fixed. They must be achieved by the end of the OKR duration and feature only those key results that can be achieved.
Strategic OKRs help teams interact and collaborate while maintaining their working frequency. They focus on the bigger picture and allow teams to set their objective in association with other stakeholders involved.
No matter what type of OKR is used, it is imperative that they are kept simple – Each objective should have only three to five key results supporting them. Here are a few practices that help managers, employees, and leaders write effective OKRs.
Having easy-to-understand values (and objectives)
Having a vision and values is essential for any organization, and it should derive the work done by different teams at a high level. Individual objectives at various levels (team, department, employee) should connect to the organization’s values and goals. Leaders of the organization should seek feedback from all the teams and individual employees while developing high-level objectives, as it develops a sense of participation, and employees will be more invested in the success of the process.
Collaborating on team objectives
Team objectives are derived from the organizational and departmental ones, focusing on developing a product or solution, or providing service on a particular issue. Since different team members handle various aspects of the project, their problems and points are bound to differ. Asking for their opinion on team objectives and then democratically setting critical results for each shortlisted object can help managers accelerate collaboration and productivity. When team members see that their ideas are being evaluated relatively by everyone, they will contribute more keenly and with intent in the future. Also, honesty can help them overcome the fear of failure and ask for help from their team members or managers.
Ensuring Key Results measure relevant data
Key results in OKRs should have a time-bound, specific, realistic, and measurable value. But tracking any corresponding value might not reveal if the objective is achieved: achieving a 3% lift in site visits can be an excellent key result for the marketing team, but it offers no use under the objective ‘improve existing customer experience.’ The objective states the problem that has to be solved; key results indicate if the problem is successfully dealt with. The number of critical results under every objective should be at most five, as they are not activities to be finished but outcomes that need to be worked towards.
Doing OKRs work
The simplicity of OKRs can be a bane in disguise – it makes even the most seasoned manager drop guard and starts the process without clearly understanding the nuances. Here are some tips by John Doerr, the evangelist responsible for many technology leaders adopting OKRs in their organizations.
Setting goals bottom-up
An organization that involves all the employees in the goal-setting process allows them to be invested in the process and gives them the freedom to understand and set their own goals. Managers’ role becomes crucial for this, as they have to help their team members understand the values of the organization and the product/service they’re working on. With their help, individuals and teams should develop some goals and key results – which can then be iterated until they meet the approval of both manager and employee.
Keeping the OKRs short
Commonly accepted practices involving OKRs usually have 3 to 5 critical results for one objective and 2-4 goals for individual employees and teams. Having more than five key results affects the focus and clarity of employees in executing their OKRs.
Inclusive and Collaborative Process
Suppose an organization has a top-down process in place. The focus of the process should be on the objective and what methods to use to achieve critical results. In that case, it should make the OKR creation process more inclusive and collaborative, where even employees at lower levels have a say and stake in creating OKRs that matter to their job functions.
By involving employees in deciding what their teams should achieve, leaders can have them invested in the company and team goals.
Embracing the flexibility of OKRs
OKRs create an agile solution adaptable to different environments, allowing for modification of key results in the middle of the project if initial parameters change. Unlike traditional models, where the project or product is completed first and then evaluated, OKRs demand constant supervision, interaction, collaboration, and updates. Without flexibility, OKRs lose their impact and become redundant over time.
Keeping OKRs and financial remunerations separate.
As OKRs are used to manage the goals of employees and teams, it might seem logical to use the goal completion statistics to decide remuneration. But that can 9and moistly will) have detrimental effects, as employees might keep even their aspirational OKRs achievable, thereby reducing innovation (in favor of a steady paycheck). Instead, they can be used as ‘Stopwatches,’ according to the formal Intel chairman and the unofficial ‘Father of OKRs,’ Andy Grove. He says employees (and teams) can use them to gauge their performance against OKR duration and then focus on improving their methods.
Setting stretch goals
Aspirational OKRs, according to John Doerr, should have a 70% success rate. 100% means that the objectives and key results were too easy, or the one putting them is playing it safe. The ‘test of butterflies,’ where OKRs make individuals and teams uncomfortable yet excited, can give a non-scientific indication if the process is on the right track. That’s why managers should ensure that the OKRs they agree on should stretch the individuals, teams, and organizations to achieve a little more.
Setting OKRs for an entire organization is challenging and is bound to feature a lot of trial and error. While there are plenty of tools and frameworks to set goals (or even adopt OKRs), leaders should remember that what worked for some (say, Google, Netflix, or Adobe) will only work for some. Flexibility and trying different types of OKRs can be best for teams and organizations. The constant cycle of re-evaluation and adjustment refines the process for everyone involved.