Goal setting is standard practice in most businesses, and project managers can be found reviewing and creating new goals on a daily basis. Having clear objectives is incredibly important in the running of a successful project. They help keep the team motivated and on track, make end-goals clear for stakeholders, and provide a benchmark against which to measure progress and outcomes.
Yet, not all methods of goal setting are made equal. Without the proper framework, goals can quickly become ineffective, ambiguous, and meaningless.
OKRs set out to provide teams with a framework for setting measurable goals. Let’s jump in and take a look at how OKRs could work for you.
What are OKRs?
To understand the meaning of OKRs, we have to break down the acronym: OKR stands for Objectives (O) and Key Results (KR). A framework for goal setting that provides teams and businesses with measurable goals and the ability to track their outcomes, OKRs should always fit into this simple formula:
I will (Objective) as measured by (Key Results).
Simplicity is key, and is why OKRs have been favored by some of the most ambitious companies in the world for decades. OKRs were first popularised in the 1980s when John Doerr joined Kleiner Perkins, bringing with him a wealth of experience from his previous role at Intel. One particular learning Doerr swore by was a system of goal setting he’d picked up from Intel CEO Andy Grove. Simple yet powerful, OKRs revolutionized project management by providing an easy framework within which teams could figure out how to achieve their goals.
OKRs have even been credited with helping Google (which Doerr invested in) become the go-to search engine in an overcrowded market.
Are OKRs the Same as KPIs?
If you’re a project manager, you’ll likely be well acquainted with KPIs, or Key Performance Indicators. Even if you don’t know exactly what this acronym stands for, chances are you’ve heard it crop up in meetings or briefs. KPIs are fantastic for quantifying performance within a project but don’t set out to provide a structure for how you’ll achieve your goals. For example, a KPI for an app development project may be to achieve 10,000 downloads within three months of launch.
A common issue project managers face with KPIs is that you can easily miss them if they aren't aligned with your strategy. They also don’t include any framework to help you plan out the steps to achieving these goals.
OKRs are defined by the intrinsic link between objectives and results, focusing on providing a framework for planning and reaching your goals.
What Makes Up an OKR?
OKRs are broken down into two key components:
- Objective: This is the goal that you’re setting out to achieve. Some examples are increasing the engagement of a new newsletter, expanding share of voice, or becoming the preferred brand in your category.
- Key Result: This is the metric you’ll be measuring the progress of your objective against, with 3 or 4 Key Results agreed for each Objective. Examples include signing up 100 new subscribers a week, investing $1m in owned media, or reaching a 60% customer approval rating.
How to Set OKRs
Goals should always be considered and never set on a whim. The same applies to OKRs; OKRs should be measurable and attributable to your team’s daily work — not just your overall strategy.
In businesses, goals are often set by higher-ups, with employees rarely truly understanding how their day-to-day work is supporting the overall goals of the business. This should be taken into account when setting OKRs. Consider how they can be measured, clearly explained to employees at all levels, and how progress can be plotted against them in a way that highlights employees’ contributions.
Define the Rules
Simply, how are you going to use OKRs in your business?
The reason OKRs are so effective is that they are simple. This also means they are incredibly flexible and can be used in pretty much any business and for any purpose.
To get the most out of using this framework, it’s important to avoid thinking too rigidly. It’s a good idea to outline how you’ll be using this methodology within the business.
Here are some important questions to answer:
- How often will you set goals? The answer will depend on the nature of your business. If you work in a slow-moving environment, you may only revisit goals yearly. Comparatively, if you work in a fast-moving industry, such as social media, you may need to review goals more frequently — even as often as monthly.
- What is the process of review? Too often, individuals and businesses set goals, never to look at them again. Schedule regular check-ins to evaluate your progress against your goals. The frequency will depend on how quickly your projects progress, but you should be checking in monthly at a minimum.
- How will you set your goals? There are many methods for creating goals, and the method you choose will depend on many factors. Will the C-suite consider and set goals based on company performance? Will individuals set their own goals, feeding into overall business objectives? Will leaders define the objectives and leave it to individuals to decide on the best key results to help meet these?
Once you’ve answered these questions and understand how you’re going to set your OKRs, it’s time to consider your next move.
We recommend giving everyone a chance to provide input and feedback in creating OKRs, as you never know where a fantastic insight may come from. But be mindful of feeling bound to action every item on the table; with more voices comes more ideas. It’s ok to use this stage to consider your options and discard non-optimal OKRs along the way.
Remember that your objectives will guide your strategy for the foreseeable future. Here are some additional examples for different types of businesses:
- Marketing: Improve landing page and resources to generate more qualified leads
- Product: Launch a new customer success team to provide an optimized customer experience
- Sales: Increase sales of Bluetooth-enabled smartwatches
Agree on Key Results
Finally, it’s time to determine your key results (KRs). These will define how you’ll measure your progress against your goals.
While it may seem counterintuitive, it’s recommended that you reach only 70% of your goals in every period. Why not 100%? Because if you are 100% successful every time, it’s clear that you’re not challenging yourself or your team enough. Key results shouldn’t be too easily achievable, though they should be within the realms of reality.
Outline what it will look like when you hit a KR and what only partially reaching or missing a KR completely looks like. This process should also be split across two groups; large-reaching, business-wide KRs and more granular, team-specific KRs.
Business-Wide Key Results
What are the business-wide KRs that feed into your outlined objectives? It’s recommended that business-wide goals are SMART as they will trickle down through each level of your business.
Teams and Individuals
What does each team and individual within the business need to achieve to contribute to the business's overall goals? Project managers will be especially interested in getting clear on their own and their team’s KRs as these will inform the prioritization of projects and your daily tasks.
It’s recommended that teams and individuals are given the opportunity to set their own goals, rather than having them dictated by a more senior member of the team. Autonomy goes a long way to improving understanding and motivation.
Track Your Goals
Goals can be easily forgotten as more pressing matters, such as the daily stressors of managing a business or keeping customers happy, begin to take priority. But it’s imperative that your progress against objectives is routinely reviewed.
When working with OKRs, teams and individuals are responsible for reviewing their smaller goals. Reports, wash-ups, and weekly check-ins can be hugely beneficial. If you work as part of an agile team, OKRs will work perfectly for you.
Optimization and Learnings
Finally, it’s time to review the success of your use of OKRs. Before moving on to your next phase of work, or new year, we recommend you take the time to consider the effectiveness of your OKRs and how they have benefited the individual and the business.
Ask yourself if your KRs were challenging enough. Did you push the envelope or did you play it too safe?
If you are a manager, ask everyone in your team to grade their individual KRs and consider what did and didn’t do well. Gather these all together and review. In the next phase of OKR-setting, use these learnings to inform your planning and decision-making.
The Benefits of OKRs
There are multitudes of benefits to working within the OKR framework. Here are some highlights:
Clear Understanding for Employees
It can be frustrating for employees when they don’t understand how their work contributes to the success of their employer. OKRs clearly map out how their individual key results feed into larger business objectives. This provides clarity and helps keep motivation up by showing employees that their contributions really matter.
One of the critical aspects of OKRs is that they promote transparency. As everyone can see each other’s goals and know that know that they’re towards the same overarching objectives, it places accountability on both the individual and group to do their best to work.
You won’t hit all your KRs — and you’re not meant to. Use this opportunity to push yourself and your team by including a stretch goal in your KRs. Stretch goals are intended to be difficult to reach, making this the perfect time to take a risk.
Connection Between Team and Company Objectives
Individual and company goals are so often disjointed, but OKRs support businesses to connect their employee’s daily work to their wider strategic goals. This also provides clarity throughout the organization.
Tools for OKRs
Are you excited to get started with data-driven, strategic goal-setting? We recently launched our new Advanced Analytics add-on to help you do just that.
Improved data visibility is the first step to improved goal management and business performance. With AvA’s customizable dashboards, you can choose how you want to see your data by selecting from a wide range of widgets. Say goodbye to messy data analysis and get a clear picture of your progress.
OKRs are just the beginning. With Forecast, you can not only meet but exceed your targets. To hit your goals out of the park, sign up for a free 14-day trial of Forecast below.