Culture9 MIN READ2020-03-11

Aligning your employees to company goals using OKR

OKRFramework
OKR Framework

Rome was not built in a day, neither are big companies nor are good habits. It takes lots of patience and perseverance to achieve anything. Wouldn’t it be amazing if there was some framework you could follow to achieve challenging goals (so that they become one of a kind?) and do great things?

Challenges are part of personal and organizational growth. Tackling those challenges one by one is what differentiates achievers from dreamers. Can you become the next Jeff Bezos, Elon Musk, can your organization be the next Amazon, Tesla, or Google?

The answer is yes, yes you can, if you have a goal to be one.

Is Having a Goal Enough for Your Success?

As per U.S. News & World Report, 80% of New Year's resolutions fail by February. As there are most gym subscriptions made in January and barely a few heads are seen from the next month. Having a goal is a great starting point but knowing a technique to achieve a goal is equally important.

That is why big companies like Google, Intel rely on a certain framework called OKR (Objectives and Key Results) to achieve their goals. OKR has proven to be one of the most effective frameworks among small companies and start-ups, helping them to achieve their goals in a shorter period and accurately measure the progress.

What is OKR?

OKR is a popular goal management framework that helps companies implement a solid strategy. OKRs are frequently set, tracked, and re-evaluated, and companies normally do it quarterly.

Two Important Building Blocks of OKR are:

  • Objective (O): An objective is a clear description of a goal that is to be achieved in the future.

    It is a straightforward description of the goal to be achieved. Expressions conveying the endpoints must be used while setting an objective.

    Since research shows more specific goals can result in higher performance and goal attainment, so, tangible and unambiguous terms must be used while setting objectives.

    It is suggested to pick just three to five objectives.

  • Key Results (KR): Key Results are the specific measures used to track your overall progress towards the objectives.

    Since it is easy to measure the progress in number, there is the use of quantitative indicators.

    The defined key results are measured through a specific set of scores or parameters which is between 0 and 1.0.

    3 key results per objectives are suggested.

A score of 60% - 70% is considered the sweet spot of OKR.

Why do Big Companies Love OKR?

The strategic plans and goals of companies should not be discouragingly high-level and abstract. Instead, they should set ambitious and quantifiable goals.

In Google, they often set goals that are just beyond the threshold of what seems possible following the OKR framework, and surprisingly, they accomplish their goals.

OKR helps the companies with an outcome-based approach, also, the employees can track their progress too. Because OKR is transparent, everyone can come together to review their own progress and measure them.

Example

Given below is an easy example of a YouTuber’s objective for a quarter and its measuring technique.

  • Objective: Increase watch hours on youtube channel
  • Key Results:

    • Upload 20 videos
    • Get 1700 subscribers
    • Run a video marketing campaign two times
  • Check the achieved Key Results by the end of the quarter:

    • Uploaded 20 videos
    • Gained 1200 subscribers
    • Did the video marketing campaign once

So, the achievement of this objective is 0.7, which is a good result. If the OKR result is 1.0 constantly for many times, then the objective is not supposed to be challenging.

So, 0.6 - 0.7 is a good mark.

And if in case you get 0.3, it does not necessarily mean failure.

What is so Unique About OKR?

OKR is very flexible to use as there is not a single way to use it. Each company can adapt it with slight modification and use it. But there are some core concepts that must be followed:

Agile Goals: Instead of using annual strategies, OKR must have an agile approach. The agile approach means the process to follow up goals frequently and make changes if needed. If short term goals are used, it is easier for companies to adapt and respond to change.

Simplicity: The objectives must be simple yet concrete. ORK’s themselves are very easy to understand.

Transparency: Since all the employees of a company are aligned to achieve a certain goal, they all must have transparent OKRs. This helps them review their tasks and help each other grow.

Nested cadences: OKR understands that different strategies and tactics have different natural tempos. To solve this, OKR adopts different rhythms:

  • Strategic Cadence: Has high level and long term OKRs and is measured annually. Example: A company can have a strategic cadence of bringing 8 new clients.
  • Tactical Cadence: Has relatively short term OKRs and is measured quarterly. Example: The company has to bring at least 2 clients in the first quarter and bring more of them in further quarters.
  • Operational Cadence: Operates the OKR Tracking Results and initiatives and is measured weekly. Example: Proper documentation of every ongoing project must be kept where the flow of the operations should be present in detail.

Bidirectional goal settings: OKR uses a market-based approach that is simultaneously top-down and bottom-up. As the company sets the strategic OKRs, each team should use their tactical OKRs. Tactical OKRs must align with the company strategy to the other teams. Around 60% of the OKRs are set bottom-up by agreeing with the managers in a normal company.

This model improves engagement and also creates a better understanding of the strategy. It also makes the process very simple and fast as you won’t be spending time “cascading goals up and down.”

Roofshots and moonshots (stretch goals): If the team has already accomplished many tasks 100% repeatedly, then they have been achieving roofshots. Now, they should try for more challenging goals, moonshots or stretch goals. Setting goals that are just beyond the threshold of what seems possible are called stretch goals also known as moonshots. Even achieving 70% of the OKR is a very good result in moonshots.

70% is the new 100%.

There are many automobile companies that have been producing automobiles with different features, and the features are upgrading time and again. Then came Elon Musk who dreamed of building an automobile empire that would operate on batteries. This seemed quite challenging, but he managed to build a self-driving car that would operate on batteries.

This shows the comparison between the goals of Elon’s Tesla and the rest of the automobile companies. This is an on-point example to distinguish between roofshots and moonshots.

Establishing OKR Culture in the Company

Starting an OKR culture is a journey, not an event. As you might know, in any cultural transformation, change doesn’t happen overnight. But practicing it slowly and steadily makes it possible to modify the company’s dynamics in just a few months by aligning and engaging the entire team.

It is very important to know what your company is going to achieve in the next 12 months by applying a combined effort of all the employees there. There are just a few key target things a company has to achieve in the next 12 months.

At first, all the key stakeholders responsible for company strategy are brought together to start an OKR workshop, and later, all the employees are then gathered there to collect the top priorities from them. Then those priorities are discussed to form company strategies. The top agendas are broken down into 3 to 5 OKRs. This can be done using a collaborative document. The objective of the OKR workshop is to come to an agreement and set a company goal that should be achieved by the beginning of next year.

Thinking big, appropriate OKRs must be set for the team members, from the CEO to the employees as OKRs cascades from high-level bodies to low-level bodies. In the cascading process, if small OKRs are set at the top level, team members will end up with a to-do list when it reaches the individual level.

Understanding the Company OKR and the Flow of OKR in the Company

At first, OKR is set for the company, it may either be to get ranked in the top 10 best companies or to raise a revenue of 100 million.

Then the CEO is assigned with his/her own OKRs aligned in such a way that he/she has to contribute to the company OKR. He/she might be assigned with few OKRs like growing the company's reputation, becoming responsible for the formation and change of strategic plans, finding new possibilities to gain revenue, etc.

Then the department heads are assigned with OKRs. They are also aligned with their OKRs in such a way that they contribute to the company OKR. The OKRs of the department heads might be leading the department and other team members very smoothly with absolute proficiency, finding more clients for the company, working out on the CSR techniques, etc.

Likewise, the staffs are assigned with their own OKRs, aligned in such a way that each one of them will contribute to company OKR. The general OKRs for the staff might be completing their everyday tasks on time, maintaining a good relationship with the clients, communicating well with clients and making them happy, etc.

Many companies are always pushing the boundaries. It is okay to set challenging objectives and key results (OKRs), also, pushing everyone to go beyond is not a bad thing either. But, setting over-challenging OKRs tends to be demotivating for many employees as they feel the objectives unattainable.

Striking the right balance while setting OKR is the most important part, you should make sure that the right benchmark is set.

One must consider various parameters like manpower, resources, market situation, etc. before setting challenging OKRs.

Examples of Company Objectives and Key Results

Financial Direction

  • Objective: Make a net profit of 85M this annum.
  • Key Results:

    • Make product sales of 7M per month.
    • Increase membership subscription by 18%.
    • List the products in 25 e-commerce websites.

People and Culture

  • Objective: Establish your company rated as the #1 workplace in the whole country.
  • Key Results:

    • Improve the Employee Net Promoter Score (eNPS) to 95+.
    • Offer the best salary to the employees as compared to any companies across the country.
    • Perform at least 10 country-level activities to reinforce the company image.

Impact on Society

  • Objectives: Have the best CSR reputation.
  • Key Results:

    • Donate 7% of the total revenue for charity.
    • Fund for 100 country-level projects for sustainable development.
    • Procure 60% energy from renewable energy sources.

Features of Company/Group OKRs

  • High Impact: If you achieve the company/group OKR well, it will show a huge positive impact on the entire organization. If the majority achieve the best score in the OKR result, the ones struggling to score well might be pushed forward later by the synergy effect, as it brings synergy in the entire team while working on company OKRs.
  • Aligned: First comes the company OKRs and then comes individual OKRs. Individual OKRs are set only after setting the company OKRs. So, there should be a well-balanced alignment between the company OKRs and individual OKRs so that every individual in a company gives ultimate priority to the company OKRs to be fulfilled.
  • Time-Bound: Keeping OKRs in a short and strict time frame helps you accomplish them quickly and review them in cycle maintaining the focus level high. Keeping it time-bound helps you to adapt to any change in plans, either it is a personal plan or a team plan.

You can see small success time and again and those glances of successes keep you motivated again and again.

We, at True mark technology, are highly inspired by the OKR framework and have experienced a huge boost in productivity after applying this framework in our company and employees’ goals.

You, as an individual or as an organization can initiate a habit of following this framework to measure your productivity. And hence, you can achieve success by setting your own roadmap.

If you have any suggestions regarding the article or want to work with us, please feel free to contact us.

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Arogya Rijal

Arogya Rijal

Digital Marketing Associate

I love building amazing content

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