OKR: what are they, how to use them, why are they important?

OKR: what are they, how to use them, why are they important?

OKRs are a framework and organisational tool that facilitates the alignment and sharing of the strategy at different organisational levels. OKRs not only help to sort out the chaos inside an organisation, but they identify the common purpose from management to team by increasing people involvement.

In this article we answer the questions:

  • OKR: what are they? Definition
  • How to use OKRs?
  • Why use OKRs? Benefits and critical issues

 

What are they? Definition of OKR

OKRs are a framework that works towards measurable goals for organisational strategic alignment, maintenance of autonomy and development of innovation in teams.

What does OKR mean?

Tha acronym OKR stands for Objective Key Results.

An OKR consists of two elements: an Objective and one or more Key Results.

  • The Objective is challenging by nature and it does not always have to be achievable. The Objective is the qualitative goal you want to achieve, the outcome you aspire and it answers the questions: “What?” and “Where do we want to go?”.
  • Key Results are the results of measurable and specific actions that help bring you closer to the Objective. They show you where you are and how long it takes you to achieve your goal, answering the questions: “How?” and “Are we going in the right direction?”. Key Results should be concrete, measurable and valuable with numbers and percentages.

An OKR refers to a specific time interval, usually a quarter.

 

How to use OKRs?

As already explained, an OKR consists of an Objective and Key Results (ideally from 3 to 5).

The process starts by identifying the Objective, that should be difficult to achieve by nature. If the Objective is immediately 100% achieved, it means that it was less challenging.

Once the Objective has been described, you can identify results you need to achieve the goal, that have to be S.M.A.R.T. (Specific, Measurable, Achievable, Realistic and Time-bound). Actually, it is essential that they are concrete and measurable through numbers and percentages, in order to monitor the progress. During follow-ups, you have to be able to measure how close you are to achieving the result.

Key Results can be accompanied by initiatives – activities you could put into practice to achieve the Key Result – and referred people.

Follow-ups are essential in the implementation of OKRs. Once the frequency has been agreed, you should hold meetings to monitor the achievement of Key Results. At the end of the quarter, you should evaluate the OKR progress, proceeding with the definition of new once and/or the revisitation of unachieved ones. These moments are useful also to ask questions on the work that has been done and how to proceed, to reflect on what you are learning and to develop the necessary discipline for the success of the framework.

OKR structure

Example

Let’s make a practical example, even if it is trivial and not real, which can help you to understand.

O: Improve brand awareness.

KR1: Increase the traffic on the corporate website to 10,000 visits per month

  • Initiative 1: Draw up an editorial plan for the corporate blog with 5 months’ visibility
  • Initiative 2: Google Ads plan with xxx budget.

KR2: Increase followers by 15% each 6 weeks on social platforms

  • Initiative 2.1: Increase social posting to 3 posts per week on Linkedin and Facebook
  • Initiative 2.2: Close a contract with 4 influencers on Instagram.

KR3: Increase the number of subscribers to mailing list by 20% within the quarter

  • Initiative 3.1: Create a landing page for newsletter subscription
  • Initiative 3.2: Social Campaign
  • Initiative 3.3: Discount code or gift for newsletter subscribers.

One: set inspiring and measurable goals.
Two: make sure you and your team are always making progress towards that desired end state. No matter how many other things are on your plate.
And three: set a cadence that makes sure the group both remembers what they are trying to accomplish and holds each other accountable.

Measure What Matters, by John Doerr.

 

Why use OKRs?

Agile Reloaded coaches have experimented and implemented the OKR framework both with customers and internally within our company. Thanks to the different experiences, we have highlighted the main benefits and criticalities to answer the question: “Why use OKRs?

 

Benefits of Objective Key Results

One of the main benefits of this methodology is that they are clarifying on several fronts.
The drafting of Objectives and their Key Results help you to identify the direction and the common purpose of your organisation, facilitating communication and alignment between parties involved.

OKRs set goals and actions that have to be achieved together. In fact, they can be defined both at company level and at team and personal level, increasing people’s autonomy and confidence.

The feelings of bewilderment, frustration and confusion are common in work experiences without a clear direction. OKRs put people in the organisation in front of concrete goals and actions, giving them the right direction towards the common goal, according to the company’s vision and mission.

We believe that having a shared purpose is crucial for involvement in activities and, at the same time, for leveraging people’s skills and creative thinking to find the best solutions.

By clearing the line of sight to everyone’s objectives, OKRs expose redundant efforts and save time and money.
Measure What Matters, by John Doerr

 

Critical issues of the framework

If it is used in the right way, the OKR tool can contribute to the improvement of the organisation and the growth of its people. In the adoption of this framework, you could make some mistakes.

This goal setting tool are not to be confused with “to-do-list” and are not a set of tasks imposed from the top down. OKRs are a set of activities that impact the organisation at multiple levels and they are shared; on the other hand, to-do-lists may include, for example, single tasks for achieving Key Results and may be private.

Working with this methodology requires discipline, from the drafting of Key Results to follow-ups; it requires a real management commitment to the framework.

As already analysed, Key Results have to be measurable, but this does not make OKRs a tool for performance appraisals or bonuses of any kind. Objective Key Results are an organisational alignment tool, they are not performance indicators such as KPIs, for example.

OKR

Conclusion

The benefits of the OKR framework culminate in an organisation that is aligned with clear and shared objectives and that allows the teams’ autonomy. Even if it could apparently seem a simple working tool, OKR needs discipline and engagement of the different roles involved to be effective.
If you would like more information or support on these issues for your company, please contact us via the contact form.

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