Business growth with OKR
Course Start 4th August 2020
OKR is one of those buzzwords that has gained more and more traction and popularity in the past couple of years. Like Scrum and Agile, companies are looking forward to adopting the OKRs in their management processes and believe they will become more successful. (And hopefully to be more like Google, of course.)
Imagine this – you’re running a business and it is doing great. You know exactly what your team and company goals for the next year are and you feel confident you’re going to achieve them. You are proud as your employees managed to establish a good work-life balance. Many of them made plans with their friends and family to go and do amazing things during the year, like ski in the Alps and visit an awesome island in Greece.
You’re thinking “Life is good, what could go wrong?”.
And suddenly, out of nowhere the Coronavirus hit the world and everything went upside down.
Many, if not all of your company goals became obsolete. Everyone needs to stay at home. Businesses are at huge risk, facing enormous financial loss and lost opportunities.
Companies and their employees need to do extreme changes and re-invent their ways of working to cope with the emergent situation.
“Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them.”
– Andrew Grove, CEO Intel
The Purpose of the OKR – Grow in the VUCA World
Unfortunately, this is the reality all of us are facing. And many businesses are already gone, while others are in a survival mode. But there always have been hard times and you know – it’s not about survival, it’s about growth.
The ultimate challenge for both, companies and individuals, is to grow in this VUCA (Volatile, Uncertain, Complex, and Ambiguous) world we’re all living in.
What is OKR?
OKR is a simple goal-setting system that can give your organization real Superpowers to concur all challenges and achieve things that seem impossible.
It is a proven successful management tool that’s invented by Andy Grove in the early 1970s and first used in his company Intel. Later, OKRs were adopted by many organizations, including Google, Spotify, LinkedIn, Twitter, Disney, BMW, and many others.
OKR stands for Objectives and Key Results.
It is a simple management methodology that helps companies to focus all their efforts and resources on the most important challenges that matter.
What is Objective?
Objective is a clear and short statement that describes what we want to achieve. It is a qualitative goal that gives the organization, department, or team the direction of focus.
Good written Objectives are easy to memorize and they describe a significant achievement. It is important to be concrete, action-oriented, and ideally – inspirational.
Well defined Objectives are a powerful source of intrinsic motivation that enables everyone in the organization to strive for their best and aim for more.
As an Objective by its definition is very vague in terms of how exactly you’re going to achieve it and how much time it will take, it is open for interpretation. And it is ok.
Let’s say you have the following Objective:
“Make our product the best on the market”
- Short and clear
- Concrete and easy to memorize
- Qualitative and gives the direction of focus
- Describes a significant achievement
- Action-oriented and inspirational
People understand it instantly and this is great. However, everyone has a different view of what it means to be “the best on the market”, let alone to measure the progress toward the goal.
And every successful manager knows that if you can’t measure your progress toward targets, they become nothing more but wishful thinking.
We need a mechanism to align departments, teams, and individuals toward synchronized efforts. This mechanism is called “Key Results”.
Every Objective goes hand-in-hand with a set of Key Results.
What are Key Results?
Key Results represent specific and measurable accomplishments that describe what it means for the Objective to be achieved. Every single Key Result represents a specific outcome in terms of value and benefit for the organization. It is a step closer to meeting the overall Objective.
Well-defined Key Results are aggressive and hard to achieve, however – possible. You should deliver them within a specific time-bound, usually, a quarter and you need to be able to verify without a doubt whether a Key Result is met or not. Most important of all, Key Results need to be measurable. It must be easy for you to determine at any given time what’s your progress toward the Key Result in terms of percentage or other means of scale.
“It is not a Key Result unless it has a number.” – Marissa Mayer, former vice president of Google
Objectives and Key Results are the two sides of the same coin and you need both. Best practice suggests that for each Objective, you should have a set of 2 to 5 Key Results.
Example set of Key Results for the Objective above:
Objective: “Make our product the best on the market”
- Our product ranks first on the marketplace in its category
- Our product has 30% better performance, compared to the 3 top competitors
- The user’s satisfaction rates have increased by 60%
- The number of unique users that use our product daily has grown by 80%
- The number of user’s complaints has decreased by 70%
In the next blog posts, we’ll dig deeper into the world of the OKRs. We’ll talk about all the benefits they give the organization. We’ll examine some good and bad practices and will give you practical tips and tricks on how to avoid some of the most common mistakes companies make when adopting the OKR system and more.
Use the comment section below to ask us questions, give us feedback, or just to say “Hi”.
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Course Start 4th August 2020
About the Authors
Nikola is an Agile enthusiast with deep interests in people, team and organizational facilitation and coaching. He has rich experience as Agile coach, Scrum master and Agile leader in big and small organizations.
It’s easy to say, Agile is in his DNA
Bogoy is an experienced Agile Coach, speaker and trainer. He enjoys helping companies, teams and individuals grow continuously and at a sustanable pace. His courses and talks are inspiring to professionals who want to learn from the best.