Our guide will help you craft efficient goals to put you far ahead of your competitors.
Let's get started or introductory part
Every year, businessmen and employees around the world seek to find the perfect system for simplifying their everyday working life and automating their processes. In fact, we can't judge them because it yields results and we regularly find useful tools for our operational work.
Everyone knows that following routine is usually quite time-consuming and distracts from your overall goals for the sake of completing minor tasks that will lead to success. So all these tools, frameworks, etc. are made to save your time and allow you to concentrate on the important things in your work, which can bring your organization to an absolutely new level.
We live in a world where much time and effort is spent on goal achievement. For us, it is a kind of measure of success and a rating of the fact that we are going forward step-by-step. That's where the OKR framework can help.
Objectives and Key Results is a methodology that gained popularity in the modern management system. It allows to align team and individual goals, and to provide an effective control on the realization of set tasks. This framework really stands out among others owing to the ambitiousness of set goals. It will allow you to swing the fences in order to gain them.
Why I wrote this article? Using it in our company, we have been absolutely satisfied with its effectiveness and, of course, in terms of our company's marketing strategy. I've answered dozens of questions about OKR on Quora and it got me thinking that people don't have enough information or are just idle about searching for it on the web. That's why this guide is supposed to be an OKR handbook for all aspiring specialists. You'll get as much info as possible towards implementing this framework and I bet you'll love it the way I do.
That's how it all began
Initially, it was Peter Drucker who kickstarted the process of goal achievement methodology development. It was called Management by Objectives ideology that was simplified and slightly transformed by Andy Groove into the modern version of OKRs.
So that's why he, a former CEO of Intel, is considered the "father" of OKR. Thus, he was the first who put it into practice after implemented it in his own company.
However, OKR has attained international fame as a result of the work of John Doerr, who joined Intel, mastered the basics of OKR, and became an advisor at Google. He presented OKR to the founders who implemented and deployed OKRs and are now publicly sharing their experience with other companies.
OKR basics
Some people consider it very difficult to implement, hence the hesitation. According to my experience in this field, I can say that it is not so laborious as you might think. The only advice I can give you is to take it seriously and you'll notice great changes both in the results and processes.
OKR is an abbreviation of Objectives and Key Results. Objectives are the goals which are created, set, and tracked within this OKR system and their success is measured by Key Results.
At the end of each year, a company creates a set of goals which are to be achieved in the next year. But there are some cases when some of your goals become unimportant. There is no need to panic because this methodology is intended to make focus your processes so you can move forward.
There are three types of OKRs:
- Organization goals
- Team goals (department)
- Individual goals
All of the company's goals have to be aligned. Their overall success depends on the goals at all levels.
- Timeframe. There is no ideal time for setting goals, it all depends on your business. If you are a startup with a constantly shifting strategy and rapid growth, it is better to set goals in the shorter term (top-level OKRs for 1 year, terms and individual quarterly) although enterprises can implement for the longer term (5-10 years for ultimate goals, 1 year for company goals and team quarterly).
- Quantity. Your OKRs should be restricted in quantity. Otherwise, you are risking losing overall focus and employee engagement. Moreover, usually a significant number of goals in the long run turn out to be blurry. The perfect number of OKRs is from 3 to 5 at each level.
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In fact, most business people consider this framework extremely efficient and use it in their work. What makes it so good? Why have most companies gained success using it?
Objectives
Your Objective should be ambitious enough to be achieved with great effort, however realistic they are. This challenge helps you expend little to no effort on goal achievement. Don't be afraid if you fail to complete it 100%. 60-70% of completion is already a great result, which can have an impact on overall company success. By the way, sometimes total completion of the goal may be an indicator that your goal wasn't ambitious enough and you have to review your goal setting strategy.
Your goal shouldn't contain any routine tasks, but only important steps for company development and prosperity. Define several crucial matters you are aspiring to in the next year or couple of years. On the basis of that, compose the right objectives, the completion of which can lead your company to a new level.
To reach total engagement among employees, set Objectives formulation which is clear to everyone in the company. Besides, no one can think the same way as you do, so try picking words that are understood by your employees the right way, so as to avoid awkward situations.
Restrictions in time helps your employees perform effectively. Focus is also encouraged. Moreover, a time frame gives you an opportunity to review your goals in cycles, so that you can understand what is actually working and what is to be reviewed and reformulated for further achievement.
Examples of Objectives: Objective 1: Provide a successful product launch by Q3 Objective 2: Increase overall profitability by 38% by Q4 Objective 3: Build a financial strategy for 2 years
Key Results serve as an identifier of your progress and helps to get your ducks in a row to accomplish goals. It is a call-to-action formulation which contains metrics and has to be quantifiable.
Examples of Key Results: Key Result 1: 20 leads conversions daily Key Result 2: Increased employee engagement by 30% Key Result 3: Hire 6 new specialists by Q2
Initiatives
It is a common mistake to confuse Initiatives and Key Results, so now I'm going to explain what Initiatives are how they differ from Key Results.
First of all, Initiatives answers the following questions: what are we going to do to reach your goal, what actions do you need to take, and what tasks do you need to accomplish. Key Results only measures the level of goal completion progress.
Regular check-ups of your Key Results will help you understand whether your Initiatives are composed correctly. If your metrics are at the same level and have not increased, then think of changing your Initiatives. Because they should yield results for Key Results and consequently benefit the Objectives they relate to.
OKR cycle or how does it actually look?
As any other undertaking, OKR demands sticking to step-by-step rules for performance. Surely, you can do everything according to the method of trials and errors, but why not make this shorter and begin your path to goal completion from the start.
So, here is the wise sequence of actions which guarantee total success if everything is done properly:
- Usually at the end of the previous year or at the beginning of the current year, your organization defines and composes a row of top-level OKRs with contribution from part of your employees.
- Then, it's time for composing company-level OKRs. They are created by executive team taking into account the team's feedback.
- Teams OKRs and initiatives created and aligned with top-level OKRs.
- Teams and departments have weekly check-ups to check their progress, correct problems, and track results.
- If your company uses quarterly OKRs, then it's better to review your OKRs in the middle of the quarter.
- At the very end of the cycle, you will have a clear image of what was done right and what needs correction.
- Renewal of the cycle.
As you can see, all steps are pretty clear and simple. The only thing you need to reach all the desired goals is to follow all of them when implementing OKRs in your company.
Taming the OKR beast (implementation)
At the beginning of the implementation process, decide which principle of defining OKRs to choose. They are both right, you just need to pick one that fits your business needs:
- Bottom-up
- Top-down
Bottom-up principle presupposes creating individual OKRs first and then proceeding to the upper levels of OKRs. This method provides employees engagement in the further process of goals achievement.
Top-down method is a cascading of OKRs from top-level individual goals. So Top Management sets one ultimate goal and each team and individual should set their OKRs the way they are totally aligned with this overall goal. This method is considered effective from the point of great alignment between the goals of all levels.
So, let's proceed to the next step after you have picked the method of OKRs creation and have defined them. There are several ways to implement OKR methodology in your company. We prefer the first one, but it's up to you to decide
The overall implementation process should be followed by training all employees of one level after another. This training is provided by so-called OKR masters who help you form OKRs and measure your KRs. They also monitor the process and hold regular check-ins. Usually, it takes about a year to overcome all difficulties, try this methodology in action, and complete the whole cycle. So, be patient and you'll see that it really delivers great results.
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OKR as the crucial process
Once you've tied all the company's processes around the OKR, you have to build a regular review process. The key to its success is to use and engage with it on a regular basis. OKR is designed the way that Objectives are set quarterly and the KRs are updated weekly. All this makes the work on your OKRs an indispensable process in terms of your everyday routine.
There are 5 stages of checking the progress of OKRs:
There is no need to write extensive reports, which are really hated by everyone. Weekly reports presuppose answers to such questions: "What is planned for the next week?," "What has been done this week?," "Were there any issues you faced?" Each employee should list around 3 to 5 goals, accomplishments, and challenges. Thus, the Manager will have a clear image of what is actually going on with his team and can review some goals and detect their importance for the defined period of time.
Such meetings are conducted to provide an effective process for working on OKRs by each team member and their joint efforts towards achieving goals. As all OKRs across the organization are totally transparent, everyone is aware of what their colleagues are working on at the moment. Although with small companies and startups, weekly meetings can be held for all employees.
At the end of the month, managers and teams review the progress of company OKRs and track how employees are moving forward. Also, these check-ins allow the team to fix and rethink some of the OKRs before quarterly grading. There are two levels of reporting: (1) between top-management and team leaders and (2) direct reports of team leaders.
During quarterly grading, it is necessary to measure and grade your KRs, but not the Objectives, which is what most people mistakenly do. This can be done through several ways: with the help of done/undone approach and giving a percentage value to each KR. As mentioned below, OKRs are so difficult to manage so it is rare to achieve 100% of them. Usually the success rate ranges from 60-70%. Further, your Objective is measured by the completion of KRs. If you have accomplished none of your KRs, then your Objective remains unchanged and equals 0. Don't give up if your quarter will be finished with 0 progress. It's ok if the overall process will take some time It usually takes 3-4 quarters to get into the process.
There are company level OKRs which are reviewed annually. It is quite a simple process, as all the lower-level OKRs are aligned and already checked several times. Sometimes company-level OKRs can fail, but there is no need to panic because we all know that these types of Objectives are quite ambitious. In terms of company success, you have made great progress in comparison with the previous year, when the OKR system wasn't implemented yet.
Key Results:
1. Make all website updates by the end of Q1
2. Provide partners and potential clients with an exclusive pre-launch option in Q2
3. Finish product data sheets by Q3
Key Results:
1. Contact 500 potential customers
2. Hold 200 demo-call
3. Provide 100 customers with free trial access
Key Results:
1. Get 100 new e-mail leads from marketin
2. Get 70 organic leads
3. Get 50 Google Adwords leads
Key Results:
1. Increase website visitors number by 5% a month
2. Launch a new ad campaign in Q1
3. Grow the Landing Page conversion rate by 7% by Q2
Key Results:
1. Compose and publish 25 new articles by the end of Q1
2. Hold and publish 3 interviews with industry influencers
3. Grow blog subscribers by 1000 by Q3
Key Results:
1. Hold 10 calls or meetings with industry experts
2. Conduct 20 media meetings or calls by Q3
Key Results:
1. Increase employee satisfaction and engagement level by 30% by Q2
2. Make a regular surveys on the company's atmosphere improvement
3. Conduct research on the paid salaries and benefits, in comparison with other companies on the market
Key Results:
1. Contribute 11 story points by Q2
2. Conduct 3 tests with QA specialists
3. Update database by Q2
4. Make the data migration completed by Q2
Key Results:
1. Grow the paid trials rate from 27% to 47
2. Increase trial sign-up rate from 10% to 25%
3. Grow the referral revenue from $10,500 to $30,500
Key Results:
1. Implement a new CS platform by Q2
2. Release an updated version with 20 additional "how-tos"
Key Results:
1. Bring all VP engineers up to date on the new processes in the company by the end of Q1
2. Review budget proposals by mid Q2
3. Compose final budget by the end of Q2
Key Results:
1. New backup system implementation by the end of Q1
2. Reduce service downtime by 20% by Q2
3. Improve internal response time and overall IT satisfaction
Wrapping it up
New year - new beginnings! Open yourself to significant changes in 2020 implementing the OKR framework.
Are you a person who goes around in circles and comes back to the beginning without gaining results? Are you making painstaking efforts? Stop being a hamster in the wheel! Start your OKR implementation process now and enjoy the results.
If you are still hesitating, pay attention to the experience of such great companies like Google, Linkedin, and Amazon, which are great examples of successful implementation of OKRs. You can yield great results from proper goal achievement.
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Self-isolation is one of the means of fighting against the spread of the coronavirus pandemic. That’s why companies around the globe require that employees work remotely.
In this article, I'm going to share 7 insights that I've discovered during the course of my research.
Today we are happy to present the Interview with Peter Bjellerup who has developed a merge between OKR and Goal Setting Theory.
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