Getting Started with Objectives and Key Results (OKRs)
Today’s most successful, fastest growing companies all practice management by objectives (MBOs) for goal-focused, company alignment. Inc. 500 companies (and even some Fortune 100 companies) all use a variety of slightly different models, including Objectives and Key Results (OKRs). With this business practice, company leaders create objectives every quarter, implement metrics to measure them, communicate along the way, and then discuss success and missed opportunities.
Below, we explain what are OKRs and how to implement this methodology with 15Five. Managers can uncover employee challenges so that they can offer support, and even find out what’s going on in an employee’s personal life that might be affecting work performance. With these two tools together in one platform, it offers managers an elegant solution for receiving employee feedback and responding in a way that re-aligns employees with their objectives.
What Are Objectives and Key Results (OKRs)?
Objectives are what the organization or individual wants to accomplish, and are typically qualitative or subjective. Examples can include the following:
- Launch new SMB product
- Delight our current customers
- Build an engaged and dynamic workplace culture
- Increase qualified leads
Key Results are concrete, specific and measurable. They should describe how you will accomplish the objective and measure whether you are on track, behind, or at risk of accomplishing an objective. Using the same same Objectives (O) above, examples of Key Results (KR) can include:
Objective: Launch new SMB product
- KR: Product design completed by January 15
- KR: 15 beta customer case studies by March 1
- KR: Sales deck, training materials, and all product assets by March 20
O: Delight our current customers
- KR: Net Promoter Score of 50 or better
- KR: Customer churn rate less than 2%
- KR: 50 new online customer reviews
O: Build an engaged and dynamic workplace culture
- KR: Monthly employee happy hour activity, suggested by employees
- KR: Company Pulse Check score of 4 or higher in 15Five
O: Increase qualified leads
- KR: 5,000 new leads this quarter
- KR: 40,000 blog subscribers
- KR: Attend 6 industry trade shows
How To Setup OKRs
1. The company establishes 3-5 top priorities for the year and every quarter.
2. Each department and individual employee creates objectives that are in-line with the company-wide priorities
3. Employees work with managers to set 3-5 objectives and corresponding key results that are aligned with team and company objectives.
4. Every employee has measurable results that are tracked and updated each week. This could be a percentage rise in certain KPIs or completing a project by a set date.
5. Employees regularly update their performance statistics so that management can see the performance of individuals, teams, and the entire organization at a glance.
6. Implement a rhythm of feedback and meetings that maintain alignment and accountability.
Make OKRs transparent throughout the company so that everyone sees the bigger picture and can hold each other accountable. Employees evaluate their key results (score them) at the end of each quarter.
One thing to note, is that the targets set by your company should typically be between 60-70% completion (Google Method). These goals are meant to be aspirational and while quarterly objectives will likely not be reached, everyone gains valuable insights from failed OKRs. They in essence become learning lessons for the company to improve future performance.
OKRs are not a to-do list. Allow people to fail at them since OKR performance is not tied to annual reviews, compensation, or bonuses. At the end of the quarter everyone debriefs and learns from the failures. Managers and employees all learn how to set better objectives for the upcoming quarter.
Note: Some organizations use OKRs as a method for goal tracking, rather than the “Google Method” of setting overly-ambitious priorities. Those companies can use a different strategy by having teams and employees set more attainable objectives. Success will then be benchmarked by 90-100% completion, rather than 60-70%.
Tips For Rolling Out OKRs
Tip #1: Don’t create too many key results. 6 is the absolute maximum so as not to risk overextending the team.
Tip #2: Never set any business goal and simply walk away. Managers should check in frequently to ensure that employees stay on track.
Tip #3: Go beyond the metrics and ask qualitative questions. “How are you doing? What challenges are you facing? How can I help?”
Tip #4: Break down quarterly objectives into weekly and monthly goals. Taking small bites feels more manageable and provides a roadmap to completing the larger goal.
Tip #5: OKRs can become flexible if necessary. For example, a new competitor may arise or the company’s financial outlook may collapse or improve. While the OKRs for the quarter stay the same, leaders can react by providing new goals for teams and employees to do what’s best for the business.
Tip #6: Employees can be intimidated because they are afraid of repercussions for not accomplishing their objectives. Management can assuage their concerns by explaining that key results are independent of criteria for performance reviews or raises.
15Five, is a lightweight employee engagement and performance platform that delivers a full suite of integrated tools via a weekly check-in, including continuous feedback, pulse surveys, objectives, and peer recognition. With the addition of Objectives (our version of OKRs), we have automated easy goal management and tracking.
15Five Objectives (OKRs)
15Five and Objectives perfectly complement each other to provide context around objective-focused management. By asking the right questions every week, managers obtain deeper insight into the motivations, distractions and other issues that influence or hinder results.
Managers can quickly and easily discover misalignments and make weekly course corrections. They can see where employees are challenged and offer just enough support to allow them to grow into their roles and achieve their objectives. Employees also have the opportunity to share triumphs and be acknowledged by management. Acknowledgements help motivate employees to perform and they boost morale.
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For a more in-depth review of OKRs, download The Ultimate Guide for Making OKRs Work at Your Company.