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Please note, Demystifying OKRs has been divided over 5 parts, & you are currently on one of the elemental parts (Part 1 of 5). Across these 5 elements, we demystify Objectives – Key results, from theory (Part 1), it’s application (Part 2), the best practices (Part 3), to it’s deployment (Part 4) & the common mistakes (Part 5). Also see, The Brew’s success stories in aligning human capital to business strategy here.
As a Human Capital Strategist, when I started helping companies adopt Objectives – Key Results methodology, transforming how they set goals (also see, how organizations can fix critical dysfunctions by fixing goal alignment & goal seting). I had a few questions on my mind:
- What is the best approach for implementing Objectives – Key Results technoque, for high impact organizations, especially startups, where things are lot more fluid – characterizing a very high degree of VUCA elements. (also see, what VUCA really means for you ?, HBR, 2014)
- How do you use it at scale?
- How do we connect it with Agile? It is an obvious fit, but how do you do it in practice?
Having deployed this framework at high impact startups, most of them need their time to adopt, adapt, and internalize the entire process.
Deploying OKRs is a journey, not an event. Being a mental model, OKR requires a deliberate shift in cognitive & behavioral space.
This read (divided in to multiple parts), supposedly serves as an implementation guide, guiding the ‘OKR to-be’ organizations in the right direction, along with the pitfalls to avoid.
Some background (& credits) to Objectives – Key Results: First developed by legendary Intel CEO Andy Grove, Objectives and Key Results is a collaborative goal-setting system that has been adopted by many high performance organizations, as an inherent leverage in achieving high growth & impact. OKRs have helped countless organizations not just build products rapidly, but also stay focused, engaged, and aligned with their company goals.
Objectives – Key Results translate your company strategy into a digestible way that allows every team member to know they’re working on the right thing.
Even better, OKRs are dead simple. At least in theory.
In practice, there are a few best practices and pitfalls you need to watch out for if you want to get the most out of bringing OKRs to your business.So, if you’re tired of hitting the finish line only to realize you were working toward the wrong goals, sick of feeling like the work you do each day isn’t moving the needle, and want to get your team more aligned with company goals and strategy, OKRs are for you.
What are OKRs?
Like their name implies, they are made up of two distinct parts:
1) Objectives: What you want to accomplish
2) Key Results: How you’re going to measure the success of your work
Sounds simple, right? On their own, an Objective and Key Results are easy concepts to understand. But it’s when you bring them together that magic happens. To clarify what we’re talking about, let’s tell a little story: Way back in the early days of Google, venture capitalist John Doerr paid a visit to the company’s Mountain View HQ to talk about their future.
Doerr had previously worked under Andy Grove at Intel (the creator of OKRs) and had joined just as Intel was transitioning from a memory company to a microprocessor company. A pivot is no small feat for any company. But one the size of Intel? To keep all of their teams in line as they went through these changes, Grove came up with the idea of OKRs, which he described through a simple formula:
We will accomplish _________ when we achieve _________
That formula was what kept Intel in check as they successfully changed their business model. And it was what Doerr wanted to show the founding team at Google.If you think about it, a proper goal isn’t just a statement of what you want to achieve, but a road map of how you’re going to get there. The “as measured by” in Grove’s formula is what makes a goal a goal (otherwise you just have an aspiration).
This formula is the best way to describe what an OKR really is:
We will accomplish _________ when we achieve _________
In this context, we can expand the definitions of each part of the OKR to something like:
- Objectives: Memorable, qualitative descriptions of what you want to accomplish in a given time-frame (such as quarterly). Objectives should be ambitious and feel somewhat uncomfortable. They should also be short, inspirational, and public so everyone knows what everyone else is working on.
- Key Results: A set of 2–5 metrics that measure your progress towards the Objective. They should describe an outcome, not an activity (i.e. they shouldn’t include words like “help”, “consult”, or “analyze”). Once they are all completed, the objective is necessarily achieved.
Let’s equally have some disclaimers to run by for a balanced perspective, it’s important to note that OKRs are a powerful tool, but they’re not a silver bullet for goal setting.
Every methodology has its upsides and downsides and OKRs are no different. What makes OKRs different is that they’re not simply just a way to set goals.OKRs communicate strategy and priorities from the highest level right down to each individual team member.
They allow team leaders to push groups in the right direction while giving them constraints to make sure work gets done. They’re fantastic tools not just for moving the needle, but for focus, prioritization, and clear communication (some of the biggest issues facing most businesses today!) On top of that, OKRs are special in a number of other ways:
They’re simple: OKRs are pretty simple to understand and make day-to-day tasks easier as everyone knows what they’re working towards. They help you reduce the time spent setting goals so you can work more on achieving them (not analyzing them).
They’re agile: By working in short cycles and with clear goals, OKRs let you measure the work you’re doing, see how it’s stacking up against company-wide goals, and adjust your approach on a regular basis.
They bring a level of transparency: As we just said, OKRs are a form of communication. At Google, all OKRs are public from the CEO down, which means at any time you can see how the people that work around you are helping the company’s cause.
They help people find meaning and purpose: Studies have shown that feeling a connection and purpose in the work you do makes us happier, more productive, and more motivated to work. By showing your team how the work they do is tied into the company’s goals you’re helping give them the purpose they need to push forward.
They’re the link between strategy and tactics: Rather than having a lofty company mission with no way to know if you’re getting there. OKRs let you choose tactical objectives that work towards your overall goal.
However, there are also a few potential downsides you should understand before adopting OKRs:
You need to know where your company is headed: As Andy Grove wrote in High Output Management: “The absolute truth is that if you don’t know what you want, you won’t get it.” OKRs help you move forward quickly and if you’re not pointing people in the right direction, or your teams aren’t aligned, they can do harm rather than good.
You need to commit the time to planning proper OKRs: Just because OKRs can be simple, doesn’t mean they’re easy. Team leaders and founders are busy. You’re hiring, strategizing, and putting out fires. But the success of OKRs depends on putting in the proper time to plan and strategize what they should be.
You need a good understanding of how success IS measured: Again, that “M” word comes up. If you don’t know what success looks like and the right metrics to tell you if you’re reaching it, there’s no point in trying to use OKRs.
What it all comes down to is that OKRs work well when you have a clear strategy and know where your company is headed.Like any goal-setting exercise, the more you know about the final destination, the better chance you’ll actually get there.
Stay with The Brew on Demystifying OKRs for the rest of the parts. Divided over 5 parts, we demystify OKRs, from theory, its application, to it’s deployment, the best practices & the common mistakes.