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Using OKR Methods To Lift Business Performance

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As 2022 draws to a close, most organizations are deeply involved in planning, budgeting and forecasting for the coming year. To complete this rigorous process, leaders often invest significant time, attention and energy for weeks or even months. Yet research says more than 90% of those strategies will never be executed. How can you develop an operational plan you’ll actually use?

Today’s uncertain economic environment is prompting leaders to seek out more flexible, reliable planning tools. But there’s no need to reinvent the wheel. For decades, some organizations have relied on highly effective, affordable practices and tools based on Objectives and Key Results (OKRs).

Understanding OKRs

The OKR framework is favored by fast-growing tech giants like Google, LinkedIn, and Spotify, as well as start-ups that hope to follow in their footsteps.

OKRs are a way of setting strategic goals, first at the company level. Then departments, teams and individuals align their goals with the organization in a systematic way. But this framework is much more than a simple goal format. It comes with multiple step-by-step execution best practices.

For example, consider the “check-in” step, which is usually conducted on a weekly basis. This lightweight update process keeps everyone on your team focused, informed and on-track throughout an OKR cycle. Regular check-ins also help leaders avoid becoming consumed in reactive firefighting, which is often why strategies never see daylight.

Specialized software can help make steps like check-ins faster and easier to manage. For example, with OKR tools like ZOKRI, the check-in process takes only minutes to complete.

Unlocking The Full Benefits of OKR

OKR Snakes and Ladders - Best Practices and Mistakes to AvoidThe OKR process seems simple enough. However, making the most of OKRs requires nuance. Understanding how to navigate these nuances can help you quickly move from an OKR novice to a highly skilled OKR-driven organization.

Some important nuances are outlined below and are illustrated in this OKR “Snakes and Ladders” infographic:

7 OKR Ladders (Top Tips)

To help you succeed at OKRs, here are 7 top tips from organizations that have relied on them for years to drive performance and growth:

  • Use OKR as a focal point for debating issues and opportunities that, if solved, can move the needle. You could also consider them a blueprint for team “therapy” that creates engagement and excitement.
  • Identify meaningful, measurable outcomes (“key results”) to be sure you define success effectively. Discourage vanity metrics and “to-do list” outcomes.
  • Use KPIs to measure business-as-usual performance. Reserve OKRs for more valuable performance metrics, focused on strategic initiatives.
  • Establish aspirational goals selectively to improve focus and unlock innovative ways of thinking. OKRs let you set stretch goals without creating unnecessary stress among stakeholders.
  • Keep in mind that OKRs do not have to follow your organization chart. For example, they can be used effectively with cross-functional team initiatives.
  • Use operational processes built into OKRs to ensure that information is flowing as needed and your organization develops an executional rhythm.
  • Leverage retrospectives at the end of OKR cycles by creating positive shared learning experiences that inform future plans.

7 OKR Snakes (Pitfalls)

Perhaps the greatest strength of the OKR framework is its popularity. The biggest obstacles and mistakes have already been solved many times before, so common issues like these are easy to spot and avoid:

  • Sometimes, executive teams are not prepared to lead by example. Instead, they expect others to set and update goals, but they don’t manage their own. You don’t want to be one of these leaders.
  • Goals assigned to you aren’t as effective as goals you help create. To unlock stronger performance gains, get more people involved in the process. Discover together what needs improvement and support others in achieving their goals.
  • Similarly, avoid developing team OKRs in a silo. Team OKRs are much more powerful when they’re the product of cross-team discussions.
  • Too many team or individual OKRs dilute your focus. Instead, set fewer goals, each with high potential business impact.
  • Don’t treat OKR steps as optional actions. Without mandatory check-ins, you lose a single point-of-truth and people stop taking reports and updates seriously.
  • When the risks and consequences of not achieving OKRs are perceived as high you might be tempted to low-ball, but that can undermine the process. Grading OKRs and retrospectives helps you avoid this issue.
  • Setting and forgetting OKRs opens the door for business-as-usual firefighting to take over your agenda. Clearly, this jeopardizes overall performance outcomes. It’s important to commit to the OKR cycle and not skip updates or OKR meetings.

Summary

OKR is a proven goal setting framework. It can help you structure, share and execute organizational strategy, while making it easy for individuals and teams to support those goals.

Businesses that rely on OKRs typically are high-performers with traditional organization charts and cross-functional teams. But as everyone works toward aligned goals, people are more likely to identify and solve problems. And they learn from each other faster than those without OKRs.

Adopting OKRs is more than adopting a new goal format. It means you’re embracing a new way of talking about challenges and opportunities, and tracking progress towards goals and learning from experience. The know-how and tools to implement OKRs are within reach – even for organizations with a limited budget and management resources.

Use OKRs To Achieve Bold Goals

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Objectives and Key Results or OKRs have helped hyper-growth Internet companies like Google achieve phenomenal success. They combine ambitious, qualitative goals and quantitative success measures with weekly execution and accountability cadence. When teams institutionalize OKRs, they enjoy clarity of purpose, fast-paced progress, and can achieve game-changing results. Use OKRs to embolden your goals, define how success is measured and achieve execution excellence:

1.  Define Ambitious and Inspiring Objectives
Create qualitative objectives.  The objective is your team’s mission – it becomes personal, inspires people and provides shared purpose.  Objectives should be for a set period of time and achievable by your team (not dependent on others).  To increase engagement, use words the team itself would use rather than corporate speak.  “Launch 2.0 product customers LOVE” is more inspiring than “release v2.0” and puts the emphasis on the impact of the product; the former invites the team on a mission to greatness, while the latter tells them the mechanical process is all you’re after.  Re-think how your goals are expressed: can you frame them to inspire the people on your team?

2.  Quantify Key Results
Key results are the target metrics that prove you’ve achieved the objective and how the team will know IT has succeeded.  What’s unique about the OKR approach is that it focuses on achieving great rather than predictable results.   KRs should be a reach, not a slam dunk.  KRs are quantitative results from your efforts, and there are typically several such as revenue, performance, engagement, quality or growth.  How will “customer love” be measured?  When 25% of customers refer their friends, 40% use the product more than 6x a day, and 30% expand use to adjacent products within 30 days are results that might signal customers love the new product.  How would you define key results for ambitious objectives that feel just out of reach but with real effort, the team just might make it happen?

3.  Execute Like Crazy
Make OKRs part of a weekly execution cadence and give everyone transparency to OKR achievement.  Each week, identify the priority deliverables and who is responsible for them; don’t get lost (or procrastinate) in the minutiae!  Focus on the major outcomes, and constrain the week’s plan to the real priorities.  Use weekly status reports to track and communicate status of these deliverables and confidence ratings on hitting the KRs.  In status reports include the prior week’s outcomes, the priority deliverables for the current week, blocker items, and the priorities you need to address the following week.  If you’re managing the team, use reports to ensure the team is executing high priorities rather than the infinite distractions that tempt us all.

Finally, don’t lower or abandon the metrics when it looks like you may fail; get as close as you can and learn from the stretch.  You’ll find out what the team is capable of when it goes for gold…  And you may even get the gold!

4.  Inspired Culture
Going for gold takes tremendous passion and tenacity.  But it also takes a lot of experience notwinning the gold, missing the podium or just getting the bronze.  Create an environment that inspires people to pursue the gold medal but celebrates the bronze and silver.  Foster and reward champion effort, continuous learning, and the drive to miss the medal but continue to compete.   Setting bold, ambitious goals with stretch metrics means you’ll surprise yourself with greatness but you’ll also miss the mark – so celebrate striving.

Inspired teams with ambitious goals who feel accountable to each other can achieve tremendous results.  Getting the objectives and key results right takes iteration and self awareness from the team, but the effort pays off when the team is full engaged in the mission and striving for greatness.  Try OKRs with your team for Q1 and Q2 and see what you can do!