In the words of Silicon Valley’s John Doerr, “Ideas are precious, but they’re relatively easy. It’s execution that’s everything”.
In a very short amount of words, John manages to point out the gap between simply coining a great idea and actually making it happen through practical measures. We can observe the value in his statement when we apply it to the business world: successful businesses are often the ones which transform core visions into practical actions. So, what’s the best strategy to turn your own business vision into something achievable? What’s the secret to delivering upon key missions and values?
When pondering such questions, the value in having an engaged team becomes apparent. After all, these are the very people who will be helping you turn a vision into a reality. The question now becomes, how can you make the whole team believe in your vision, and ultimately, make it a reality?
The key here is making each individual employee feel they have a connection to the big picture, which is where the concept of goals setting comes in. Goal setting is paramount for a business, as it outlines the practical and everyday ways each team member can contribute to something meaningful. Goals are the fuel behind actions; the everyday ways employees strive for a certain outcome and care about the business’ mission in relation to their own careers.
“Effective goals are the Swiss army knife of the business world.”
At large, effective goals are the Swiss army knife of the business world: they form a tool which serves multiple functions. Goals have the potential to create sense of purpose, enhance staff engagement, clarify the business’s vision, unite teams, promote transparency and boost morale. Evidently, choosing the right goal system for your business couldn’t be more important… but this can be a feat in its self.
With a simple Google search returning nearly 14 million results for “goal setting”, selecting the best system is perplexing to say the least. Fortunately, using Objective Key Results (OKR) combines so many benefits across a number of goal-setting methodologies. The beauty of using OKRs is that they provide a fully-fledged system of creating, monitoring and reevaluating goals. Most importantly, this system inspires both individuals and whole teams to dedicate practical efforts to achieving a shared vision. Wondering how OKRs can generate such incredible results? Here’s everything you need to know.
So, what are OKRs?
The birth of Objective Key Results can be partially attributed to the co-founder of Intel, Andy Grove, as he introduced the idea of OKRs in his 1983 publication, High Output Management. From here, the methodology was embraced by Google, which brought OKRs to the limelight. Now, companies such as Spotify, GoPro, LinkedIn and Eventbrite have also gotten on board the OKR train.
Objective Key Results are effective as they are based on the company’s vision, strategic and tactical functions. Using OKRs, a business takes the big picture, such as the organisation’s overall vision, and makes this relative and important to each individual employee. As a result, every team member feels directly involved in contributing to this collaborative mission in practical ways.
This aspect of OKRs may sound similar to other goal systems, but the difference lies in OKR’s functionality, execution and follow-up, making it a holistic system. Essentially, the Objective Key Results responds to 3 fundamental concerns, these being:
1. Where do you need to go? (What’s your direction?)
2. How will you know you’re getting there? (What’s your feedback?)
3. What will you do to get there? (What are your actions?)
OKRs answer these questions through its 3-part structure, that being the:
1. Key Objectives
2. Key Results
3. Key Actions
Let’s make the functionality of OKRs clearer by elaborating on this structure.
How are OKRs structured?
As mentioned previously, OKRs always start with the business vision, as the vision is really the heart of the whole system. As you are probably already aware, the business vision is the big picture, the idea or the purpose which inspires you. As this concept is large and implies extensive work, it gives rise to your long-term goals, known here as your key objectives. To coin such key objectives, you may ask yourself questions such as “where do I want to go with my business?”, “where do I hope to see my business in ten years from now?”, or “What’s my primary and unsubsiding business goal?”.
Ultimately, your key objectives should be made to last for approximately 5 years (before being reviewed). The key objectives should be inspirational and provide some direction to achieving your most ambitious aspirations. Perhaps one of the most important aspects of key objectives is that they should always speak to the whole entire organisation, and apply to every single employee. As the key objectives are large-scale goals, aim to create no more than 3 key objectives per time frame in order to promote focus on these top ambitions.
Key results are the next tier in OKR’s structure, as they form a direct response to the key objectives. Indeed, the key results are an excellent way to gauge the progress in regard to your long-term objectives.
The strategic key results are annual in structure and operate on a company-level. Like key objectives, they should not change throughout their duration, as they are created to inform employees of their yearly mission, and how this will contribute towards the vision. Overall, key results are measurements of success.
To coin these key results, you may ask yourself “what can be done this year to contribute to my overall mission?” or “what are the specific ways employees can improve my business compared to last year?”.
These goals should speak to whole teams, as individuals are not solely accountable for their success. However, individuals should see how they can contribute to the team effort in meaningful ways (the next section will explore this in greater detail).
In creating and monitoring such key results, the team’s progress will become apparent, and the key results will also highlight how this collaborate result is fundamental to the overall mission. Depending on your business, you may choose to just have one annual key result as this will stimulate engagement on that primary goal. As too many annual goals can be overwhelming and counter-productive, you should abstain from having more than 4 key results.
The final aspect in OKRs are the key actions. These quarterly goals are intended to create useful short-term stepping stones. Basically, these are the everyday actions which will outline a practical path to achieving the annual goal. They should be quite specific in order to highlight this pathway. Some businesses choose to omit the option of implementing these key results, although key actions are usually helpful. After all, without key actions, key results would never be achieved.
Key results are also valuable, as they speak to employees on an individual level. This means employees are solely responsible for achieving these actions, which outlines their own personal pathway to contributing to meaningful achievements. As these goals are short-term, they are more subjective to change. At the end of each quarter, these key actions should be reviewed, and effective changes should be implemented for the next quarter.
What are the benefits of OKRs?
What will they offer my business?
You may be reading this blog post for any number of reasons. Perhaps you’re looking to increase employee engagement, or to promote a greater sense of employee involvement. Maybe it’s improved communication that you’re looking for, or perhaps you want to effectively communicate your business mission in meaningful ways.
None of these wishes would come as a surprise, as such a large number of businesses are lacking in these areas. Studies show that less than a quarter of employees are engaged – a figure which has not changed in the past decade. A whopping 58% of employees say their employer does not effectively communicate goals, with only 14% understanding the company’s direction. The great thing about OKRs is that they are designed to help in all of these areas. Here’s how.
A Clear Vision & Shared Purpose
As the business vision is at the heart of OKRs, this vision is linked to each and every goal in some way. Whether it be an annual key result, or a short-term key action, the OKR structure will show how this goal contributes to the bigger picture. This means all employees, regardless of their position or department, are highly aware of this overall business vision, and their relation to it. This then gives rise to a whole range of other benefits, including an increased sense of meaning, as employees are able to conceptualise how their work is important to the ‘big picture’. You can thereby expect increased employee engagement, as meaningful work is a key factor in motivating your team.
As the whole team is united under this vision, collaboration is also supported. Annual key results play a big part here, as they outline a goal which speaks to whole departments (any thereby requires a collaborative effort).
As mentioned previously, every employee’s set of OKRs can be accessed by every other staff member, irrespective of their position. What results is increased transparency, as individuals are able to see how others are working towards the mission. Not only does this foster trust, but also creates an easy way for departments to gain a better understanding of what other departments are doing. Other results include increased sense of loyalty and personal responsibility.
In the words of Eze Vidra (Chief Innovation Officer at Antidote), OKRs make business management “like a driverless car”. When implemented, an understanding of what needs to be done and why is incredibly clear. Having a sense of direction and working towards goals becomes habitual within the workplace culture. The structure also gives rise to a measurement culture, as employees can track individual, team and organisation-wide achievements. The result is a culture of personal accountability, responsibility and disciplined thinking.
“The result is a culture of personal accountability, responsibility and disciplined thinking.”
How to get started with OKRs?
Although setting-up OKRs may initially appear intimidating, there is a multitude of resources which can help you to set functional and effective business goals.
To get started on creating your own OKRs, you can get some inspiration from Rick Klau’s video on how Google implements OKRs. In case you prefer a concise article, here’s a summary of the 15 great insights from the Google OKR Goals Video.
Once you’ve collected your thoughts and ambitions, you may choose to make yourself a list by downloading Atiim’s checklist for setting OKRs the smart way.
The importance of review and follow-up is one of the key values in OKRs, so it makes sense to apply the same methodology to the goals themselves. Once you have implemented your OKRs, don’t forget to review their effectiveness. Here’s a helpful free eBook explaining 10 tips to getting the most out of OKRs.