Do you even OKR?
Objectives and Key Results (OKR) are a tool for measuring individual and organizational progress. They help people with goal setting and motivation. Many large companies have reported great benefits from implementing OKR. Google, LinkedIn and Intel to mention a few, have all been active advocates for OKR in a business context.
Objectives are memorable, qualitative descriptions of what you want to achieve. They should be short, inspirational, engaging and challenge the team or individual. Examples: Create an awesome customer experience. Become a LinkedIn influencer.
Key Results are a set of metrics that measure your progress towards the Objective. They are targets which help you advance your goals, whether you reach them or not. Key Results are numeric targets to give a direction to which we work for. Examples: Increase net promoter score from 50 to 80. Reach 10 000 LinkedIn followers.
Simplified to ground rules: Pick 3-5 Objectives for the team and for each Objective, create 2-5 Key Results. If it does not have a number, it is not a Key Result.
Why implement OKR?
Then how are all these companies benefiting from OKR? The main benefits are in higher individual level motivation and performance. This in turn results in lower costs and higher returns. Large corporations have a huge potential in OKR, because individual level impact and alignment are hard to measure.
Setting the bar high in regard of goals not only motivates people to do their best, but to exceed their perceived capabilities. Having organization wide OKR gives a clear direction of what we want to achieve in the short term. Individual OKR helps focus on the most important tasks and activities. Setting up their own targets improves self-efficacy and motivation in employees.
Best practices of implementation
There are several conditions proven to be vital for a successful OKR system:
- The goal cycles should be short, so organizations can adapt and respond to change
- Goal setting happens in days rather than months
- Goals are transparent and everybody has access to them
- People set their own goals in a bottom-up manner according to the high level objectives
- Setting the goals well beyond their expected results. Achieving 60-70% of the goal should be the average result
- No performance bonuses linked to OKR
Agile goal cycles
Our business environment is in constant turbulence, which is why goals should have short follow-up periods. An organization is able to react to the goals being too easy, too hard or not relevant when the status is evaluated often enough. Building a regular cadence of checking in on individual and team-level Key Results sets a team up for success.
Fast goal setting
You want to be swift in setting your objectives. This way you can be sure you spend your resources in achieving the objectives rather than setting them. OKR should be set in days rather than months, to focus our efforts in the important activities.
Everybody should have access to organization-wide and everyone’s individual OKR. This makes them a central part of organizational transparency. The primary purpose of OKR is to create alignment in the organization and having them open for all makes sure strategy is followed on all levels.
Individual objectives and key results are formulated by the goal owners. They are influenced by organization-wide alignments and their personal pursuits. This allows people to articulate themselves, how they can help the organization achieve its goals. As a by-product this increases the motivation and self-efficacy of employees as well.
It might sound counter-intuitive to set goals we don’t expect to achieve. Data shows, however, that setting difficult targets has a positive effect on effort and performance on the individual. Set the targets beyond what you presume to be capable of and watch how your people rise to the challenge. Often people will also be content in reaching the goal. Setting the bar to achievable levels ensures you will not surpass them.
OKR separated from rewarding system
Don’t link performance bonuses to OKR. Why? You might ask. There are a few simple answers. If achieving the targets is rewarded, people won’t set their OKR targets on levels they can’t reach. This effectively des the previous point. This would also motivate people to fabricate results to look better than reality. On the other hand, not reaching the targets that affect your compensation can be stressful and depressing.
OKR in Fingertip
Fingertip is an all-in-one business leadership platform, with robust built-in OKR features. The Plan object allows you to set different goal cycles for teams and individuals. Create your own process for OKR and reap the benefits. The RACI-model for individual roles empowers people to be accountable in their activities. It also promotes privacy and reduces information overload. Reporting and evaluation are fully digitized, working both on mobile and desktop.
Follow your progress in real-time with Objectives and Dashboards. Give feedback and collaborate in the highly sophisticated Salesforce® application. Link your OKR to decision making, planning and activities and let the individuals shine using Fingertip.