Hello! Let's have a look at something that has quite literally changed my approach to business strategy and goal setting – OKRs. I'm sure you're thinking, "Great. Corporate word soup." But stay with me; I promise this one is different. I fell in love with it a couple of years ago and am absolutely evangelical about it.
First off, what's an OKR, anyway? The acronym stands for Objectives and Key Results. The idea was brewed up by a chap named Andy Grove, former CEO of Intel, and later brought into the spotlight by the venture capitalist John Doerr, who introduced it to Google in the early days (and they still use them). Setting SMART (specific, measurable, achievable, relevant & timebound) goals isn't new. OKRs are similar but add a twist – they merge aspirational objectives with concrete key results that signal successful delivery.
Suppose your objective is to "Be the number one ice cream seller in all of Brighton" (a noble and worthwhile goal). A key result might be "Increase monthly ice cream sales by 20%." The objective is the vision, and the key result is the quantifiable measurement that shows you're on your way to making that dream a reality. Note; the key result is not an action but a measurable outcome.
This simple yet potent formula is where the beauty of OKRs lies. Each objective requires some good, old-fashioned head-scratching to get right, and the key results that follow aren't just a nod of agreement; they're proof that you're hitting the bullseye. Here's another example;
Objective: Successfully complete a marathon in under 5 hours.
Increase weekly running distance to 40 miles by the end of month 2.
Complete three 20-mile runs at a consistent pace by the end of month 4.
Incorporate two days of strength and flexibility training each week to reduce injury risk.
Improve average pace to 10 minutes per mile in half-marathon distance runs by the end of month 3.
Dedicate one day each week to recovery and cross-training exercises for balanced muscle development.
What I love primarily about OKRs is their ability to focus the mind. In a project, too often, we sit down and talk about tasks, not outcomes. We focus on the doing part right out of the gate, not the results we need. Asking people to contribute to writing iron-clad key results that align with an objective can be invigorating, and you might find that what you thought was robust and well-understood... isn't.
Another of the great features of OKRs is their versatility. They're not picky; you can use them at any level – from an individual contributor to the strategic echelons of a company. What's even better is how they cascade, a bit like a waterfall of strategic planning. A high-level key result for an organisation can trickle down to become a team's objective, sprouting its own set of key results. (In the purest world of OKRs, they are set bottom-up & top-down simultaneously, meeting and adjusting in the middle).
Because OKRs are transparent and should be communicated to everyone, people feel more connected to their work and the broader objectives of the business. It's not just about clocking in and out; it's about contributing to the big picture, and people love to be part of that. So often, I've seen the people on the ground completely disconnected from the strategic direction and challenges of the organisation. This is a great way to deal with that. If I walked into your office or team right now and picked a junior staff member, would they know the objectives for the quarter/year, or would they just know that they have a series of tasks to complete, disconnected from a higher purpose? If the answer is 'no', consider the OKR process seriously.
Now, here's where it gets a bit sticky. Many folks believe they've got their heads around OKRs, but they're dealing with a mutated version. These are often the result of organisations attempting to shoehorn OKRs into existing practices without fully understanding their nature. This usually leaves the magic of OKRs by the wayside.
One of the big misconceptions is that OKRs should be tied to personal performance and bonuses. That's a no-go. Why? Because OKRs are meant to be ambitious, encourage innovative thinking, and prompt us to shoot for the stars. Tying them to bonuses risks people sandbagging and playing it safe, and that's not the spirit of OKRs. Aim high, and fail quickly. Nobody will want to fail if the outcome is tied to their paycheck. If you need more information on that, then check out this article.
I'd suggest, though, especially for strategic planning, which suggests a quarterly OKR cycle, that you set annual objectives and not key results, but for each of the annual objectives, set the key results quarterly. It slickens the process. So, for example, have an annual objective that says, "Rank in the Top 3 results for Google Searches in our niche by the end of the year", and update the key results for that objective quarterly. You keep the vision but break it down by saying, 'Okay, what are we going to do for that and be measured against during the next quarter?' Create other objectives quarterly if you need, but keep that 'north star' objective.
So, how can you learn more about OKRs and ensure you're on the right path? The book "Measure What Matters" by John Doerr is a brilliant, accessible starting point, offering in-depth insights into the world of OKRs. For online resources, the site www.whatmatters.com is a treasure trove of valuable information and a great companion to Doerr's book. Lots of examples and some really great training videos.
There you have it, OKRs in a nutshell - simple, cascading, inclusive, and effective.
So, go forth, explore the world of OKRs, and remember, they're not just about reaching your goals; they're about embarking on a journey of ambition, growth, and success. Ultimately, it's not just about the destination but the wonderful ride that gets you there.