Setting goals is crucial for any business that wants to be successful. Setting clear goals that give you a focus can be the difference between success and failure.
A successful business needs to operate with ruthless focus. In order to beat your competition, there needs to be efficient growth at a sustainable rate. One way to achieve this is to introduce a performance-based culture into your business, like OKRs.
OKRs are focused on growth-based initiatives that minimise the inefficiencies and misalignment in your business. They are used by some of the biggest and best companies in the world and, used correctly, can have a transformational effect on your business’ ability to hit targets.
So, with that in mind, we have created this extensive guide for you to live and breathe OKRs so that you too can supercharge your business’ results…
OKR stands for “Objectives and Key Results” and, since their inception, they have become a popular goal management process that helps companies implement an effective strategy.
So, how are OKRs different to your average goal setting strategy?
OKRs are designed to connect company, team and personal objectives in a hierarchical manner. The idea of OKRs is to measure the results of all employees together to form one, unified direction.
OKRs started life at Intel and have since been developed and utilised by some of the biggest and best organisations on the planet, such as Google and Amazon. They have adopted this technique into each stage of their planning and, from their success, you can see it’s worked!
John Doerr, American Investor and author of ‘Measure What Matters’, has this to say about OKRs:
“When people have conflicting priorities or unclear, meaningless, or arbitrarily shifting goals, they become frustrated, cynical, and demotivated.”
OKRs are a simple process that can engage your team and embrace creativity into your strategy.
You need OKRs to maximise the focus and alignment of your business.
Keeping the vision, goals, and objectives in the headlights of yourself and your employees will help to keep all operations on track. If your employees know what is expected of them, they will be able to align their work with your goals and objectives to achieve further success.
The purpose of OKRs is to create alignment with your company. If everyone in your organisation works towards business, departmental and individual OKRs, each level of your company will be able to work towards a single, unified goal.
Alignment is at the core of OKRs. It can only occur when your team has structured conversations of what to prioritise. Prioritising and documenting the most impactful tasks will help generate success quickly and save time when aligning with the next task.
An Objective is simply WHAT is to be achieved, no more and no less.
By definition, objectives are significant, concrete, action-orientated, and, ideally, they are inspirational. Objectives set a clear direction for a goal to be achieved in the future, it describes where you want to go. Objectives can be long-lived, rolled over a year or even longer.
For an OKR structure, you should start by defining no more than 3-5 key objectives on a company, team, and individual level. Your objectives should not be vague or else they will become immeasurable.
When properly designed and positioned, they’re a vaccine against fuzzy thinking and fuzzy execution. When running a business ‘fuzzy’ is your worst enemy. You need clarity through OKRs to stamp out ‘fuzzy’.
When we talk about objectives, it’s important to note that there are two OKR distinctions. The first is a moonshot objectives and the second is a roofshot objective.
When setting your company objectives, you should decide if what you’re looking to achieve is aspirational or realistic. A moonshot is exactly what it sounds like - it’s shooting for the moon. Whereas, a roofshot is much more achievable and should be considered an objective that needs to be achieved.
If you don’t quite hit your moonshot objective, it shouldn’t be taken as a failure. It might sound counterintuitive to set an objective that you don’t expect to achieve but some of the most forward-thinking companies in the world, like Google, utilise moonshot objectives to go above and beyond what is expected of them.
You don’t become an industry leader by hitting every small target you set yourself, you get there by over stretching yourself in comparison to your competition.
Key results benchmark and monitor HOW we get to our objective. Effective key results are specific and timely, aggressive and, yet, realistic. Most important of all, they need to be measurable and verifiable.
Under each objective, you should define 3-4 measurable results, but no more. Too many and the process to achieve your objective will become clouded.
These key results should be specific, measurable, actionable, relevant and time-based by either the team or person. You either meet a key result’s requirements or you don’t. There is no grey area, no room for doubt. If you don’t achieve your objective, you’ll be able to trace back through your key results to see where you went wrong.
See the OKR Examples section below to get an idea of how to construct your own:
Measuring your OKRs is how you’ll be able to monitor your progress and see if you are on track to achieve your goals. OKRs only work when there are consistent ‘check-ins’ and measurements in place. Once an objective deadline is hit, it is then time to get the team together, analyse and score your objectives.
This constant system of analysis and scoring will mean that your OKR setting process improves consistently and a new culture of targets, results, and analysis is embedded in your organisation.
The simplest, cleanest way to score an objective is to average the percentage completion rates of its associated key results. Google has implemented their own process, which is now widely used, and uses a scale of 0.0 to 1.0.
It’s important to note that these scores are based on Google’s moonshot objectives that they don’t always expect to achieve:
When scoring your OKRs, you can mark what you’ve achieved and address how you might do it differently next time. A low score can force reassessment: Is the objective still worth pursuing? If so, what can we change to achieve it?
Scores can be assigned based on numeric results i.e. if you had to sell 100 units by 1st March and you sold 70, this is a score of 0.7. However, the OKR system is also flexible enough that the person responsible for this objective could score this result 0.9 because whilst only 70 units were sold the average sale price was 40% higher than normal.
Evidence of Google’s penchant for using moonshot objectives, Rick Klau, a former manager at Google, says,
“Objectives are ambitious and should feel somewhat uncomfortable.
The 'sweet spot' for an OKR grade is 0.6-0.7; if someone consistently gets 1.0, their OKRs aren’t ambitious enough.
If you get 1’s, you’re not crushing it, you’re sandbagging.”
The idea is not to think 70% is the new 100%, it is to keep trying to stretch to 100%, even though you might not reach it in the end. This can be monitored by tracking weekly.
Accommodating the flexible scoring system ensures that your team communicates the reasons behind the score and the results, reinforcing the analysis and self-improvement that OKRs can deliver.
The simplest way to implement OKRs is through bespoke OKR software. This is generally quite affordable and allows you to consign the dreaded spreadsheet to the trash.
Using software can help you build a strong internal structure for your OKRs. You are able to add your objectives and key results, seeing the progression over time.
The software can also help you find clarity for your OKRs and can give you and your employees a 360 overview of your organisations priorities and progress, leaving no one out of the loop.
So, how do I stay on track of my OKRs?
Embrace your OKRs and work them into your routine with weekly check-ins. These check-ins are short meetings for tracking results.
Tracking your results weekly gives you an idea of the success of your key results and if there needs to be any adjustments.
The idea is to make the most of existing meetings that are in place and to make them more productive. Making your meetings laser-focused on key results can improve the engagement and motivation of your employees.
Keep them short - these meetings should be limited to an hour maximum. Weekly check-ins are the most powerful tool for OKR success, making sure each part of the business is on track.
Alongside reviewing them weekly, reviewing them quarterly will help you to see if you have reached your objective. This might seem like it may be time consuming but it is worth it to analyse your results and improve your next set of OKRs.
Make sure you are focused on improving results and not just making excuses for why results aren’t going to progress.
To understand OKRs more clearly, we have provided you with examples to think about. We have categorised them to show you how OKRs can get more specific as they go into personal tasks.
We have provided Marketing, Operations, and Finance examples to help you on your way.
Company
Objective:
Key results:
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Objective 1:
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Objective 2:
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Individual
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Company
Objective:
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Team
Objective 1:
Key results:
Objective 2:
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Objective 3:
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Individual
Objective 1:
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Objective 2:
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Company
Objective:
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Team
Objective 1:
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Individual
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Key results
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Key results:
We hope these examples have helped with the construction of your OKRs. Remember to be as specific as possible as this will mean your goals are more measurable.
When it comes to planning OKRs, you should set your company shorter goal cycles so that you can respond and adapt to any change.
Simplicity is key when planning your objectives as otherwise, they will become muddled and unrealistic. Make sure your objectives are one clear line so they look conclusive and measurable.
Personal or company objectives should be planned thoroughly to determine where the weaknesses are and where you can improve. If your objectives are not planned, they will either be unrealistic or immeasurable.
Here is an OKR Template from us at to help you on your way to achieving your goals!
When OKRs are set up, they are really simple to use. They don’t take a lot of time to set up or follow. Reviewing your key results each week is a great way to stay on track with your goals, check-in your progress and see how far you have come.
Don’t be set and forget. Don’t treat your OKRs like a New Year's Resolution!
Once you have begun to implement the OKR system into your organisation, the next step is to aim higher!
OKRs can also include stretch goals to help you push even further. As mentioned, Google often set stretch goals that are ambitious but reachable. Stretch goals are just beyond the threshold of what seems possible to you or your business. Hitting a score between 0.6 to 0.8 on these would be a great result.
Setting stretch goals should be ambitious. They will feel uncomfortable at first but don’t worry, this is part of the process. These goals will take you out of your comfort zone, but this is exciting. The idea is to push you and your team further than you’ve gone before to reach results you weren’t sure were possible.
When aiming high, even failing some goals can achieve substantial advances for your business.
Google has said,
“We set ourselves goals we know we can’t reach yet, because we know by stretching to meet them we can get further than expected.”
Maybe you have been thinking of goals for your company, but think they are too ambitious? Well, think again. Your ambitious goals are already taking you out of your comfort zone. The only issue happens if your team is not stretching.
Don’t fall behind, be a leader.
Many business leaders may end each quarter with the same concerns. What motivates employees? What makes employees feel included and brings out their best work?
The answer is OKRs.
Asking questions is one of the most powerful tools a leader can do. Andy Grove developed OKRs to answer two simple questions: Where do I want to go? How will I know I’m getting there?
These two questions look at how employees focus their time at work. Each objective set is aligned with the company's mission, vision, and values. So, as you approach the end of 2018 and the start of 2019, think about the leadership of your teams and how you can develop them using OKRs.
By utilising these steps, you’ll be an OKR wizard and will be able to communicate with your teams in a deeper and horizontal way.
Say “no” to the vertical way of working and choose OKRs to help direct your business.
OKRs are something you should definitely be implemented into your business to achieve further success. So, go on, get constructing!