Do you know what Google, Intel, Netflix, Twitter, Dell, and Dropbox have in common? To achieve resounding global success in the tech industry, they all employ the same goal-setting methodology inside their organisation: the Objectives and Key Results (OKR) framework.
What is OKR?
All organisations, no matter their size or niche, need to have a clear strategy for uniting their teams to reach a common goal. Your team members need to understand what you require of them, and they must feel empowered to make their own decisions to achieve what you want. The OKR framework gives you all of this and more.
In the 1970s, Andy Grove at Intel initiated the first OKR method. Today, it is used by hundreds of successful businesses and organisations worldwide, most famously by Google. Out of the many goal-setting methodologies out there, more and more outcome-focused leaders use OKR to drive success.
OKR is made up of two key components: Objectives and Key Results. Your Objective is a qualitative goal that defines what you want to achieve. Your Key Results are quantitative metrics that describe how you will measure your progress as you work toward your objective.
For example, your Objective is to increase profitability. This is an easy enough goal to set, typical for any business owner. You then have to outline your Key Results for the next quarter to help you reach your objective.
Key results may include:
- Reducing manufacturing costs by 5%
- Reducing operating costs by 10%
- Leveraging digital marketing to increase online revenue
OKR nurtures teams so they can perform to the best of their ability and drive business success. It’s a team-based approach to set measurable goals at every level of your organisation and track everyone’s performance level.
Designing an Effective OKR
You can break down your OKR design in three simple steps:
1. Plan Your OKR
The foundation of your OKR is your goal setting. You want to set up objectives with 3 to 4 key results for each level of your organisation: individual, team, department, and the overall company.
Your goals should follow the SMART principle of goal-setting:
Depending on your business structure, you can set your OKRs quarterly or on a project basis. At the beginning of any team project, all the members should create their individual OKRs and have them approved by upper management.
2. Regular Check-Ins
Of course, an effective OKR doesn’t stop at goal setting. You need to track progress and make sure that everyone is on track to meet their goals. Weekly check-ins will help your team members keep their focus and allow you to adjust your priorities or plans if needed.
3. Final Grade
As your team project comes to a close or your business quarter ends, you need to gather and score your individual, team, and company OKRs. Delivering constructive feedback to your organisation will inform them of your future expectations and empower them to perform well in the future. Honest, open communication is necessary for teams to keep performing well and for your business to keep growing.
The Objectives and Key Results (OKR) framework is an effective method to set team goals and encourage all team members to meet them. Many companies have employed this method to great success, and it’s worth a try if your organisation isn’t already using it. All you have to do at the beginning of your project or your business quarter is to set clear, measurable objectives and the key results to reach them.
This is only part one of two in our blog series discussing the OKR framework and how you can leverage it for your organisation’s success. Stay tuned and check our blog for OKR best practices and other information included in part two!
Are you looking to grow your business?
We offer an 8-Week OKR Quick Start Program that will help connect your teams and drive radical value for your customers and accelerate your business growth. You can check out our FREE training as well to get you started on your OKR journey!
If you would like to learn more, you can reach out to us and we’ll get back to you soon.