How to execute OKRs in steps and unlock your organization's full potential. This comprehensive guide explores the power of OKRs (Objectives and Key Results), a proven goal-setting framework that empowers businesses to define, track, and achieve their most ambitious objectives. Learn the essential strategies and best practices for successful OKR implementation and drive sustainable growth today.
Objectives are high-level, qualitative goals that describe what an organization or individual aims to achieve. They provide a clear direction and focus on desired outcomes.
Key Results are measurable, quantitative indicators that track progress towards the objectives. They define specific targets and milestones that indicate success. Key Results should be ambitious, achievable, and time-bound.
What Are OKRs?
OKRs are a goal-setting framework that involves setting clear objectives and measurable key results. Objectives are what you want to achieve, and key results are specific measures that track progress towards those objectives. It helps organisations and individuals stay focused, aligned, and accountable in achieving their goals.
How do OKRs work?
OKRs are typically set on a quarterly basis and are meant to be challenging yet attainable. They create alignment and transparency within an organisation, helping teams and individuals prioritise their efforts and track progress in a measurable way.
Why should I implement OKRs?
OKRs are intended to foster a culture of continuous improvement, learning, and adaptability. They encourage ambitious goal-setting and provide a framework for regular review and adjustment to keep objectives relevant in a dynamic environment.
The 5 Stages of Executing OKRs From Scratch:
Stage 1 - Define Objectives:
The very first part of an OKR is the Objective. The whole process starts by determining 3-5 key objectives. These are high-level goals at the organisational level and become more specific as they go down toward teams
Start by clearly defining your high-level objectives. Objectives should be aspirational, motivating, and aligned with your organisation's or team's overall mission and strategy. They should answer the question, "What do we want to achieve?"
Take the question above: "How do we define success?" In the first OKR cycle, success may simply look like Teaching your teams about OKRs through practice
Do most key results contain metrics? In The OKRs Field Book, Ben Lamorte shares three types of key results:
An incremental change - Is your change an increment away from the status quo?
A leap - Are you asking your team to think outside the box? Use inspirational language to help them get there.
A discovery - While most key results should be metric-based, if you don't have the data, a milestone key result may also prove useful. Consider how one key result may affect the other.
Stage 2 - Identify Key Results:
Key Results are measurable outcomes that indicate progress toward the objectives. They should be specific, measurable, time-bound, and challenging yet achievable. Key Results should answer the question, "How will we know if we have achieved the objective?"
Optimise Your OKRs for Success: Craft aspirational and challenging OKRs that inspire and push you outside your comfort zone. Ensure your objectives represent a desired future state and convey a sense of anticipation. To develop impactful OKRs, ask yourself the following key questions:
Do your objectives sound like they have already been achieved?
Embrace the three perspectives on objectives, as outlined in 'Measure What Matters:"
By optimizing your OKRs for success, you can drive motivation and focus, leading to improved outcomes and organizational growth.
Matching objectives and key results - It’s important to find key results that are leading indicators of your objective, as opposed to lagging indicators. You want results that can be measured regularly and frequently and lead to the overall objective.
Stage 3 - OKR Prioritisation, Focus & Execution:
Review your objectives and key results and prioritise them based on their importance and impact. Focus on a limited number of objectives and key results to ensure clarity and avoid dilution of efforts. This step helps prevent spreading resources too thin and increases the likelihood of success.
Tools to manage your OKRs
When it comes to managing your OKRs, choosing the right approach is crucial for success. While using a spreadsheet might seem convenient during the brainstorming phase, leveraging OKR software like monday.com can significantly enhance the process. By shifting the responsibility of OKR creation to department/team leaders and managers, and assigning key result definition to project teams or individuals, you ensure a streamlined and effective OKR implementation.
Managing Change for OKRs:
Change management has evolved over time through the contributions of scholars, researchers, and practitioners in fields like psychology and business management. Kurt Lewin's three-step model and John Kotter's eight-step model are notable milestones. Change management is an interdisciplinary field, shaped by insights from psychology, sociology, and organisational development.
Kurt Lewin's 3 Step Model
Unfreeze (melt the ice): Create a perception that a change is needed and get employees ready to change.
Change (mold it into the shape you want): Move towards the new desired behaviour.
Refreeze (solidify the new shape): Freeze that new behaviour as the norm, ensuring change is performing and stabilised.
John Kotter's 8 Step Model
Create a Sense of Urgency: Develop a compelling case for change by highlighting the need and urgency for it. Communicate the reasons behind the change and the potential risks of inaction.
Form a Powerful Coalition: Build a team of influential leaders who are committed to driving the change. This coalition should have the necessary authority and expertise to guide the change process effectively.
Create a Vision for Change: Develop a clear and inspiring vision that outlines the desired future state after the change. Communicate this vision to all stakeholders, helping them understand the purpose and direction of the change effort.
Communicate the Vision: Consistently and effectively communicate the change vision throughout the organisation. Use various channels and opportunities to reinforce the message and address any concerns or resistance.
Empower Action: Remove obstacles and empower employees to take action towards the change. Provide the necessary resources, support, and training to enable individuals and teams to contribute to the change effort.
Generate Short-Term Wins: Celebrate and communicate the achievements and milestones reached during the change process. By creating and recognising short-term wins, you build momentum and reinforce the belief that the change is making a positive impact.
Consolidate Gains and Produce More Change: Use the momentum from the short-term wins to drive further change. Analyse the lessons learned and adjust strategies accordingly. Build on the successes and address any remaining barriers or resistance.
Anchor the Change in the Culture: Embed the change into the organisations culture by aligning it with the values, norms, and behaviours. Ensure that the change becomes a part of how things are done, providing a solid foundation for future growth and continuous improvement.
Establishing Your OKR Champion for Success
To drive the success of your OKR program, it's important to designate an OKR champion within your organisation. This champion will play a vital role in supporting teams as they integrate OKRs into existing processes. Allowing ample time for this transition is essential, as testing the OKR methodology on a smaller scale provides proof of concept for a larger implementation. Additionally, the OKR Phase 2: Preparing for the OKR cycle champion will facilitate alignment across the OKR hierarchy. Consider selecting a department that is open to embracing change to spearhead the implementation.
Company-Level OKRs for a Strong Launch
For a successful OKR launch, we recommend starting with company-level OKRs. It's crucial to have leadership buy-in to ensure the longevity of the OKR program. The commitment of your leaders is just as important as your own dedication to OKRs."
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Stage 4 - Track Progress:
Regularly track and measure progress towards your key results. Assign owners to each key result who will monitor and update the progress. Use a tracking system or software to visualise progress and keep everyone informed. This step helps you stay on track, identify any bottlenecks, and make necessary adjustments.
Department and team OKRs A single company OKR can dictate the direction of any department/team OKRs. For simplicity, we recommend beginning with one department and one subsequent team. OKRs may work in a leadership echo chamber, but seeing how they operate top-to bottom is a better indicator of where iterations may be needed. Providing plenty of delivery time allows more people to be hands-on with the process, creating more collective buy-in -remember, this is success within itself. Additionally, an extended timeline allows the OKR process to occur without too much stress or pressure.
Stage 5 - Review and Learn:
Conduct regular reviews to assess progress, learn from results, and make necessary adjustments. Evaluate the achievement of key results in comparison to set objectives, identifying successful and unsuccessful aspects. Utilise these insights to enhance the goal-setting process and refine future OKRs.
OKRs are designed to be agile and adaptable, so be proactive in updating them as circumstances change or new opportunities arise.
Empower Autonomy:
Foster a sense of autonomy within your teams, allowing them to define their boundaries while providing guidance and support.
Communicate at Every Stage: Maintain open lines of communication with teams throughout the entire OKR process, from creation to iteration and finalisation.
Trace Back to Goals:
Continuously communicate the underlying "why" behind each stage, enabling teams to determine the most effective "how" for achieving their objectives.
Alignment is an Ongoing Process:
Regularly check in on key results and weekly tasks to ensure alignment. Employing suitable OKR software provides a visual representation of company alignment, showcasing how individual work contributes to organisational success. This enhances motivation, transparency, and buy-in for the entire OKR process.
Most common reasons why OKRs can fail:
Lack of alignment between individual and organisational goals.
Unclear or unrealistic objectives.
Weak or poorly defined key results.
Insufficient commitment and accountability from individuals and teams.
Overemphasis on performance evaluation rather than learning and improvement.
Inadequate communication and engagement during the goal-setting process.
Failure to regularly review and adapt OKRs to changing circumstances.
Examples of organisations that have achieved success using the OKR framework:
Alphabet Inc: OKRs played a significant role in Google's growth and success, enabling them to set ambitious goals and align teams effectively.
Intel: Intel has attributed their success to OKRs, which have helped them set clear objectives, align its workforce, and drive innovation.
Spotify: OKRs have been instrumental in Spotify's agile and innovative culture, allowing teams to align efforts, experiment, and iterate rapidly.
Airbnb: By leveraging OKRs, Airbnb has been able to scale its platform, enter new markets, and improve user experience, leading to significant business growth.
Gates Foundation: The Gates Foundation adopted OKRs to increase its impact in global health and education, setting clear goals and holding themselves accountable for meaningful results.