How to Fully Maximise the OKR Benefits for Your Company
Maybe you’ve heard about OKR in an executives-only grapevine. You heard other guys saying they’re having lesser headaches with their teams. Maybe you heard that everyone in Company A is breaking their performance score after many years of stalling the company’s growth. The culprit behind, OKRs. Of course, as the leader of your company, you want the same results.
So would your company benefit from adopting OKR? Below are some of its major advantages. The best thing about it is you don’t have to be in a specific industry for your company to reap these OKR benefits. It works for everyone.
- It is an agile system.
Unlike traditional goal setting methods, OKRs are preferably reviewed in short-term basis. The short cycles allow for faster adjustments and enable your company to adapt to change. Having an agile system gives room for innovation, and reduces risk and waste.
- OKRs promote collaboration
One key characteristic of OKRs is it ensures alignment among your teams and employees. Having shared OKRs promotes collaboration which leads the way to better problem-solving. At the same time, it solves problems with interdependencies and unites competing initiatives. Imagine how it will put everyone in your company in sync? 🙂
- Less time is spent on goal-setting.
Setting goals can be a tedious, time-consuming process. But not with OKRs. The simplicity of this tool makes the process fast and easy, dramatically reducing the time and resources needed to set goals, from your key leadership teams down to the smaller teams of your company.
- There’s better communication.
Communication is important to the success of any company. OKR is a goal-setting system that promotes transparency (with everyone having access to what others are doing). This transparency, along with the simplicity of the system, will enable your employees to understand the goals of your company and how they can contribute towards reaching it.
- OKRs drive engagement.
The bidirectional approach of goal-setting, as observed in OKRs, connects your employees with your company’s objectives, thus, driving engagement.
- There are autonomy and accountability.
As everyone knows what their goals are, everyone has a sense of responsibility over their actions. Employees have a clear direction of how to achieve their OKRs. This creates a sense of ‘mutual obligation’ and promotes autonomy.
- There are focus and discipline.
One of the best OKR benefits is that having fewer goals in a shorter time frame lets your employees focus on their GSDs. This also boosts their discipline and effort over the company initiatives.
- The company can set bolder goals.
OKRs are meat for making challenging or ambitious goals. It decouples rewards from compensation and involves using stretch goals to help your employees set higher goals and achieve them.
Strategic vs Tactical OKRs
Many people think that OKRs only works best when done on a quarterly basis. This was the model used by Google when they started until 2011. However, when Larry Page retook the role of CEO in Google, he decided to adopt OKRs both annually and quarterly.
For what reason? Using OKRs only for a shorter term might cause teams to miss the big picture – the ultimate goals of the company – and just focus on the things they can accomplish in three months. This drove the idea of having an annual goal-setting. You might want to adopt this setup or you can experiment and see what works best for your team and company.
Companies that have implemented OKRs for so long understand that different goals can have a different cadence. For instance, tactical goals tend to change faster than strategic goals. Thus, OKRs decouples strategy and tactics by adopting a nested model.
Strategic goals are high-level goals that are set for the long-term. But it doesn’t mean it cannot be changed. Your company has to maintain open communication about their strategy and review them as necessary. Tactical cadence, on the other hand, is used more on short-term goal setting. It is adopted primarily by teams and involves constant check-ins for tracking progress along the way.
What makes a successful OKR approach?
A successful implementation of OKR would most likely include the following:
- Annual strategic OKRs (to be used by the entire company, departments, and business units)
- Quarterly tactical goals for teams, coupled with a mid-quarter review.
- Weekly check-ins for tracking results.
What OKR Cadence Suits Your Company More?
As mentioned above, OKR is an agile system. Thus, you can also tailor the cadence to meet your company needs. For example, while most companies set OKRs every three months, Spotify does it every 6 months. It’s an interesting story because they quit using OKR for some time to try their own approach, but went back to it.
Other companies adopt shorter cadences, from monthly to weekly. Others use it as a to-do list. Regardless of the frequency of your OKRs, it should meet your needs. In most cases, however, the quarterly cadence makes more sense because it provides just the right amount of time for employees and managers to develop initiatives, and measure their impact on the company.
Generally, the shorter the cadence, the smaller the overhead needs to be. And the longer the cadence, the lower the business uncertainty is. If you wish to adopt a shorter cadence, you have to create a streamlined approach to develop OKRs. Otherwise, you will spend more time setting goals. Furthermore, if your company faces uncertainty or your market changes too quickly, having long cycles of OKR is not going to help you.
How to Implement OKR in Your Company
If you’re just starting with OKR, it is recommended that you begin with a quarterly tactical cadence coupled with a mid-quarter review. This will allow your team to learn and adapt to the new model. You can also have unified cadences for different teams or functions, depending on the need. For instance, you can set an annual OKR for your sales team and use quarterly OKRs for your product or engineering teams.
Eventually, you can experiment with your own cadences, but your goal should be to try to maximise the synchronisation opportunities. This gives a chance for all teams or departments within your company to sync, at least once a year, to ensure alignment.
Cascading is another thing. The best approach would be to have an incremental rollout, beginning with a simple model and evolving it over time. The cascading approach for OKR is top-down or “waterfall”. It involves no feedback cycles.
This cascading model is based on a “command and control” mindset wherein decisions simply flow from the management to the team-member level. The words and images are great cascading tools that help shape the culture of a company.
The rule of thumb in implementing OKRs is that 60% of it should be defined by team members from the bottom to the top. This means the executive and leaders like you also have a say on what the OKRs should be about.
As an executive and a leader in your company, you have a great vantage point to see what cadence and rhythm best fit for your company. Don’t be afraid to experiment. Feedback from your team is also invaluable.
Keep an open mind. Remember that you’re adopting OKR to put everyone in your company in sync. You can’t achieve it without feedback from the lower ranks.
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