Goal Setting Framework – The OKR Approach
Objectives and Key Results, known as OKR, is a recent leadership foundation that helps organisations set, communicate, and measure their goals, this framework is a fantastic goal setting framework. The primary function of OKR is to connect an employee´s personal objectives with the team and the company in a hierarchical way.
How the OKR works in short? Your team will work together in a defined direction which is shaped by measurable factors. As a manager you might think that this is just a lot of work for your busy schedule, however, tracking this goal setting approach is very easy and helpful. There are numerous software tools that help you implement and track your company OKRs.
The OKR Approach
Visibility is a keyword in the OKR concept – employees know and understand what is expected of them at work. This is why in most known companies, such as Google, OKRs are visible to everyone from leadership to team members. It allows everyone to see and understand what each individual is doing as part of the company goals and objectives.
Ideally, an OKR is made up of 3 to 5 high-profile objectives and under these objectives, there are 3-5 key measurable results. The key results are measured through a set of scores (usually between 0 and 1.0). These allow companies to measure progress.
Setting OKRs can be done on a quarterly basis, which could be a start to see the progress. But it can also be done on a monthly or annual basis, it really depends on the needs and goals of your company.
The concept of OKR is not new. It was recognised in the early 1970s when Andy Grove, the former president of Intel, introduced the idea. OKRs are now used by thousands of organisations around the world, including the largest Fortune 500 companies like Zynga, Sears, Twitter, Oracle, and so much more.
As a leader in your company, this mind shift is a total win. Leadership experts believe that OKR is one of the leading team management practices that every company should implement. Why?
Easy and simple – you don´t need many resources to implement and keep a track of OKRs
Preserves the company culture – this greatly benefits the productivity and performance of employees
Measure progress – OKR make it possible for companies to achieve their goals in a shorter period of time and accurately measure progress
OKR Framework: A Simple Model
What leaders and executives like about OKRs is the fact that it has a simple and straightforward structure. There are only three parts: Objectives, Key Results, and Metrics.
The very first part of an OKR is the Objective. The process starts by identifying 3-5 key objectives. These are high-profile goals at the organisational level. They become more specific as they are spread toward teams and individual members.
So as you, manager, this is the part where you can give a great example to make the goals of your organisation flood from your office to your teams´OKRs.
These objectives may be more targeted to the team members´roles and responsibilities but they are and should be always aligned with the overall company objectives.
We shall assign 3-4 measurable results to each objective we identify. This helps you as a leader, to evaluate the performance of your employees to figure out whether they are on track to achieving their goals.
OKR results can have many forms, such as company revenue, employee engagement, growth, and performance. Having a numerical value for each result makes it easy to find out what still needs to be done in terms of your objectives.
- Create the objectives and key results
As mentioned above, the first step in implementing OKR approach is to set a specific set of objectives and the key results. Once these are defined, they are communicated to all stakeholders.
If necessary, the objectives can be rephrased in order to get a common understanding among the employees. The key is that everyone understands what the objectives are and what they should do.
- Make it measurable
Key results should be assessed so that every team member can check their progress. We measure it by using a scoring system; the ideal score is between 70% and 75%. Scoring 100% can look very “suspicious”. This can actually mean that a person has set goals that are too easy to achieve.
- Review OKRs on a regular basis
OKRs are not fixed, they change depending on the circumstances. For example, if the company goals change, you must also adjust the OKRs.
Advantages of Using OKR approach for Your Company
OKRs can play an important role in your company regardless of the industry you´re in.
A big advantage is that it allows all employees to be aware of the vision, mission, and goals of your organisation and most importantly, align their goals to these.
When OKRs are used regularly, they highly benefit the growth of your company. With OKRs, not only your employees understand the company goals, but they also get a clear idea of what is expected from them.
Even if there are various different departments and employees performing specific roles, with OKRs, they are able to align their personal objectives in a way to benefit the rest of your company.
How often you review the OKRs, is totally up to you. Companies mainly review OKRs monthly, quarterly, or annually. Team members can even review their OKRs on a weekly basis.
OKR approach is widely used by various leading companies around the world because of its proven benefits. Managers and leaders like you love this approach because it has a direct impact on every employee´s goals. OKRs focus on important goals, productivity, and results.
OKRs are among the best management tools that can be used by your team. Whatever your ultimate goal is – whether to drive performance, guide your people in the right direction, implement a new process or change, OKRs will surely benefit your company.
There’s no wonder why it is largely practised by many companies, from Google to Twitter, LinkedIn, and more.
OKRs are easy to implement. They should also be flexible to accommodate changes over time. Once properly implemented, it can be one of the most powerful drivers in the continued growth and success of your company.
OKRs are considered one of the best management tools, therefore, a great tool as Goal Setting Framework. Whatever your ultimate goal is – whether it is to drive performance, implement a new process or a change, OKRs will definitely benefit your organisation.
Moreover, OKRs are easy to implement, they should be flexible to receive any changes. When properly implemented, it can be one of the most important drivers of a success in your company.
Do you want to know more about OKRs? We wrote a white paper that summarises everything that you need to know in order to start using OKRs in your company! Do not wait any longer and download your white paper now.Download The White-Paper