OKR Introduction- What are OKRs?
Setting OKRs propels your team to achieve seemingly impossible goals whilst continuously learning.
Organizations are faced with the unique challenge of being amidst times when the pace of change has become exponential. Leaders are faced with the challenge of keeping teams aligned to ever-changing goal posts. Read on to learn how leaders can leverage OKRs (or objectives and key results) to create alignment, Prioritization, Accountability, Transparency and Empowerment in order to be truly agile.
What are OKRs?
Objective & Key Results is a goal setting and execution framework that focuses on no more than 3 to 5 Objectives (per cycle) and no more than 3 to 5 Key Results per objective. It’s a methodology that helps align the company strategy to its goals and people. OKRs ensure the whole organisation is focused on achieving the same goals.
OKRs are best suited as a goal setting & execution framework. It encourages no more that 3 to 5 Objectives and no more than 3 to 5 Key Results for every Objective. OKRs are being used irrespective of industry, function, or nature of teams. You can also use OKRs to achieve success in your personal life.
So, let’s be clear! OKR is an open-source framework. No two organisations tend to implement OKRs the same way. There are no rules, rather guidelines when working with OKRs. One must avoid being dogmatic about it. Due to its flexible nature, OKRs can be used in more ways than one. We have seen some companies set OKRs once a quarter, while others have chosen shorter frequencies.
In some cases, companies have altered the way its implemented. And yet some others have flexed the way they are reviewed. However, in order to maintain the integrity of the OKR framework, there are some essentials that must not be compromised.
OKRs’ history is pegged way back to 1954 when Peter Drucker introduced MBO or Management by Objectives. In 1968, Andrew Grove co-founded Intel and later adapted the MBO to create the OKR framework as we know it today. In 1974, John Doerr joined Intel and learned OKR during his time there. When John Doerr became one of the first major investors and advisor in Google — he suggested the use of OKRs to Larry Page and Sergey Brin, who then implemented OKR at Google (which still uses it today). Over the years many companies globally have started using OKRs as their goal setting and execution framework. Some of the organisations that have used OKRs include names like Amazon, Netflix, Spotify, Atlassian, Microsoft, Facebook, Colgate, SWIFT, etc.
OKRs enable organisations to stay relevant, responsive and agile. They enable companies to achieve exponential growth through 6 super-powers.
More Focus on Priority: OKRs provide you with a solid framework to focus on what matters most – your priorities. This enables organisations to execute those priorities with nimble footedness and agility. Clearly, leadership readiness and buy-in continues to be the key to success. The ultimate goal of OKRs is to help companies and/or teams prioritise goals and make decisions on how to use various organisational resources – especially their people, time, and money – towards achieving those common goals.
Greater alignment of Goals and Efforts: OKRs and its very framework enhances systemic thinking. It encourages leaders to convert their strategy in annuals goals and then further break those goals into quarterly ones. In doing so, it becomes critical for teams and sub-teams to align themselves to the overall goals and purpose of the organisation. One also gets to see true alignment when there is a healthy amalgamation of top-down, bottom-up and cross alignment between teams or members. All working towards the same goals. The result? A well-oiled engine generating great value for the organisation.
Value Creation: OKRs, especially the Key Results, get defined in ways that help create more autonomy and empowerment. Well-crafted Key Results are outcome (value) based and not effort (activity) based. The right Key Results (outcome based) support the achievement of an Objective, thereby empowering employees, and teams to work out how best they should be achieving them.
More Interdependencies / Collaboration: Within its framework, OKRs require top-down, bottom-up and cross team alignment before implementation begins. This ensures everyone in the system is pooling in their resources toward those common big hairy audacious goals. And since OKRs are meant to be transparent, members also get to see real time changes in one place and how they affect other teams, thus allowing everyone to constantly align and re-align on a regular basis.
Rapid Innovation: OKR thus becomes the ‘go-to’ framework that ignites a truly agile system whilst acting as the conduit for cultural transformation within any team or organisation. Rapid experimentation of initiatives within the realm of OKRs, a ‘fail-fast’ mindset, psychological safety to take calculated risks, collaboration, learning and continual sprints in the product, services and operational segments all add up to creating an environment where innovation thrives.
Accountability & Ownership: By sheer virtue of its inherent design, OKRs are meant to create a culture of top-down and bottom-up communication. While the top-down design enables the strategic intent, the bottom-up approach brings grounded experience, executional intelligence, and clear contribution from people in teams. Through transparent alignment and involvement of employees across the board, higher levels of engagement and ownership is created.