OKR (Objectives and Key Results) is one of the most impactful ways to approach goal setting. Here's the OKR definition! It is a simple, yet incredibly powerful goal system which creates alignment and focuses the effort around measurable goals. Moreover, OKR framework has been widely used by many major companies, such as Google. You may read our blogpost on How Google Uses OKRs on our Corvisio blog.
Let's take a brief glance at the History of OKR.
OKRs were first developed and implemented in 1980s by Andy Grove during his tenure as CEO at Intel. After that, OKRs were debated and systemized in the academic world. Thanks to this, two specific questions rose to promote OKR more fertilely by the end of the 90s. The former is, “Where do I want to go”, and the latter is, “How will I know I‘m getting there?”. Objectives and key results became based on these 2 questions. This development ensured a new paradigm shift for OKR implementing, which helped spread OKR methodology all around the world.
Last but not least, there has been another event in the history of OKR at the turn of the 21st century. Google decided to take advantage of OKR’s benefits. Nowadays, many large companies use OKR, such as Intel, Google, Twitter, LinkedIn, Zynga, Oracle and many others.
Characteristics of OKR
OKR implementation has two main beginning stages. The former is setting the Objectives, and the latter is determining the Key Results. In order to choose impactful Objectives and Key Results, their characteristics should be known well.
-short and memorable
-feels a tad uncomfortable
-definitive and measurable
When you set up an objective, define the goal you are trying to achieve in a sentence. For instance, if the goal is "make my website prettier", convert it to numerical and measurable parameters. "Make my website 30% faster", or, "Increase engagement by 20%" may become your useful Objectives.
However, there are some common OKR mistakes. Read this article about Most Common OKR Mistakes.
When it comes to setting the Key Results, there are also some crucial points which should be taken into consideration. Truly, Key Results are what makes OKR so effective. The reason is that the Key Results break down the Objectives into smaller, measurable steps.
Key Results are brief statements that are clearly defined, specific, and measurable. Therefore, they make it easier for employees and their leads to monitor progress. For best results, Key Results must have the following characteristics.
KRs are specific. Organizations that have successfully used OKRs see to it that they use specific language that is common to all their employees when drafting their key results and objectives.
Supposing, you set spot-on Objectives. A successful OKR does not stop there. You still have one question to answer – in what way will you be able to accomplish this goal?
That’s where Key Results come in. OKRs should always be measured. For example, if your objective is to increase your profits by 50%, what will be the indicators that you have achieved this goal? One indicator might be a reduction in your operational cost and distribution cost. Another would be doubling your production. Third indicator could be completing 10 more projects than what you usually do. From these indicators (also called ‘milestones’), you can break down your key results into more specific tasks and strategies.
You may begin to use Free OKR Software to implement these steps for your company and employees.
Why OKRs are a powerful and impactful way to approach goal setting for a company?
The answer is simple: OKRs ensure alignment of goals. As your company grows and the organizational structure becomes more complex, the more challenging it is for leaders like you to ensure alignment.
With OKRs, keeping everyone aligned is not a problem. Another challenge that growing companies encounter is the high possibility of individual goals and priorities overlapping.
Everyone in your company can have their own set of priorities and sometimes, they don’t match that of their leads, management, or the organization. OKRs solve this problem through cascading alignment.
In what way?
An important process involved in OKRs is reviewing company goals prior to the beginning of each quarter. During this phase, executives gather to discuss the organizational objectives. In most instances, a maximum of 3-5 objectives are determined, which will then have to be cascaded to departments, teams, and individual employees.
The cascading process is very important because it ensures that everyone is on the same page. Each employee or team is going to work on their individual OKRs while bearing in mind the high-level OKRs set by the management and key stakeholders of the company.
All of these features make OKR impactful and powerful. Hence, OKR has been widely used around the World.
Golden Rule of OKR: Full Success=Big Mistake
Here's why the OKR methodology is a meaningful and impactful way of tracking objectives and their outcomes. It's not desired to achieve 100% success for your OKRs. That is because OKRs should be ideal, and almost impossible to reach during the given timeframe. That means your success is based on how you define your Key Results. The rule of thumb is: if you have achieved 70% of a key result, you have been successful.
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