Goal systems can be rather like diets. It’s rarely a black-and-white choice of which ones are ‘good’ or ‘bad’, but more a question of which ones work best for which people and circumstances.
In the corporate world, it’s no surprise that systems of the acronym variety are favoured – and especially those with an empirical slant.
So, say hello to OKRs – used by huge companies such as Google, Twitter, LinkedIn, Sears and Oracle. Created within global US technology corporation Intel in the 1970s, the main purpose of using the OKR system is to connect the aims of individual people, teams and organisations.
OKRs can often be found in monthly or quarterly business planning reports, providing a clear indication of what is expected of staff at every level – and how well they’re progressing. The details are shared with all parties, to create universal understanding and transparency.
What is the OKR process?
‘OKRs’ stands for objectives and key results. Ah,‘key’ – another of those popular corporate themes. In this case, it usually refers to identifying the most vital goals within an organisation.
To break it down,OKRs consist of:
- A list of objectives – ideally three to five, at personal, team and company levels
- A list measurable key results for each objective– ideally three or four
- A progress indicator for each key result, such as a percentage score or numeric scale
An objective is what you want to accomplish (put a man on the moon by the end of the decade); key results are how you will accomplish the objective (build a lunar module weighing under 40,000 pounds by December 1965).
Objectives should be ambitious, qualitative, time-bound and actionable – rather like SMART goals.
Key results should be challenging, yet achievable; and quantifiable – usually based on growth, performance, revenue or engagement.
The progress indicator is updated on a regular basis (weekly or fortnightly). Once 75% of an objective’s results have been achieved, the objective is usually considered complete. If 100% of the results are achieved, the objective may be considered insufficiently ambitious.
Applying OKRs to your situation
You might think:‘ But my life and work goals aren’t numerical – so how can I use OKRs?’ However,OKRs are adaptable to different circumstances. You just need to figure out away to indicate progress.
For example, if your objective was to make a serious effort to get a book published, your key results might be:
- Determine the genre of your book and angle for pitching
(which you could rate on a scale of 1 to10, depending how satisfied you are with your definitions)
- Write a synopsis of your book
(which could be measurable by how many words you get done each day, towards the total)
- Make contact with 20 agents or book editors
(hey, look – you do have some numerical considerations, after all…)
While if you DO have volume-based aspirations – for example, an objective to add £50,000 to your business turnover – your key results might be:
- Have 20 meetings with potential clients
- Set up 5 pitch presentations
- Raise your prices by 10%
Want to consider more objectives and results? We found this handy set of examples, categorised by industry.
How effective are OKRs?
The general consensus among businesses large and small seems to be that OKRs are extremely useful for managing and monitoring progress – but this partly depends on how they’re being used; and by whom.
The benefits ofOKRs include:
- Simplicity – The system is logical and easy to implement
- Transparency – All employees are made aware of OKRs, ensuring clarity throughout the organisation
- Motivation – Helping employees to focus on the organisation’s vision and goals; and the part they play
- Data-driven – Making it easier to keep track of general improvements and progress throughout the business
- Encouraging regular reviews – Teams can come together to analyse progress; and consider how to continually improve their approach to OKRs for each new month or quarter
Meanwhile, the drawbacks of OKRs can include:
- Cumbersome to maintain and update independently – Special software is often required, as large spreadsheets can become unwieldy and people may forget to update their individual progress
- Morale – Not achieving fixed results can be seen as ‘failing’, even when circumstances have changed to make them unreachable
- Contrived results – Setting three easier key results and one impossible result could provide a method of ‘cheating’ to reach the golden 75%
- Awkward for non-numerical goals – Some important goals may not be quantifiable by a percentage or amount; or even a particular timescale
OKRs are therefore perhaps best used as a framework to work by, but not the ONLY indication of success or progress within an organisation – or, alternatively, your life.