OKR stands for Objectives and Key Results, which is a goal setting framework widely used by many companies.
The goal of OKR is to define how to achieve objectives through concrete, specific and measurable actions.
Each member of the team will know what is expected of them. Also, they will know which objectives they need to accomplish towards reaching the company goals.
Most of the time companies apply OKR with software programs as Corvisio OKR Software
Not only many digital giants as Google, Twitter, LinkedIn, and Airbnb use OKR, also other companies as Walmart, Target, The Guardian and ING Bank use this goal setting framework.
Components of OKR
Objectives should be Specific, Measurable, Achievable and Time-bound. You should define 2-5 objectives. Otherwise, it will not be possible for people to keep all the objectives in mind.
Under each objective, again, there should be 2-5 key result metrics. A key result is a sign of how much progress you have made to achieve the objective.
It is often measured with percentage 0 – 100%, however, it can also be measured with binary system 0 – 1.
Key results should be challenging and inspiring to the team. But also, they should be measurable and qualitative. Remember that “if it does not have a number, it is not a key result” as Google’s Vice President Marissa Mayer said.
You might find useful to consider a goal is completed and you have achieved success if the metrics are around 70%.
100% complete key results may not be the best fit. You may want to adopt them because they might not be challenging enough.
Example of OKR
Increase profits in the first quarter
Increase sales by 10%
Reduce churn rate by 3%
Increase online subscription 8% monthly
For instance, in this example, you can measure your Objective with your Key Results, as they are qualitative, measurable and specific metrics to assess where you are reaching the goal.
How to use OKR?
OKR objectives are regularly set, tracked, and adapted usually quarterly.
After you have set your objectives and key results, each team member, preferably, should update their progress on key results. This way, you can track your OKRs and change them accordingly if need be.
Remember that you can be flexible while using OKR. You do not have to wait for yearly static objectives. Do not hesitate to change your objectives and key results if your priorities have changed. Then, set your key results accordingly.
Benefits of OKR
Transparency – OKR’s should be visible to everyone so that the people are aware of what others are working on.
Alignment – Similarly, OKR makes sure that every employee in the company align their work, move in the same direction and reach a common goal.
Focus – OKR helps the employees focus on the tasks that have the most impact on the business. There needs to be high impact on company goals after you get the objectives done, otherwise, the objectives are too easy to achieve.
OKR helps the employees to focus their attention on the most important tasks for the time, letting them prioritize them to bring the highest positive impact on the company.
Engagement – People strive to achieve outstanding results when they engage in the process with a purpose. Use a wording that everyone will understand. As a result, you can communicate your goals to everyone in the company and receive deeper engagement.
You can give it a go with Corvisio OKR Software for free!