If you’ve ever Googled “What’s an OKR?” you’re not alone. OKRs mean objectives and key results and they’re becoming a very popular way for business leaders to get everyone on the same page. By making your organization’s OKRs visible and transparent, employees get a better sense of how they can contribute. And the more they understand the overall impact they make, the more engaged they’ll be.
But setting organizational objectives isn’t easy. You have to take into consideration internal factors such as financial resources and human capital as well as external factors such as competitors, demand for the products, and the economy. You’ll also want to encourage employees to set their individual objectives by aligning their contributions to the departmental and organizational objectives. It’s easy to understand why many leaders struggle to set their organizational objectives because there are too many variables that can affect the end results.
It IS a lot to align. Here are some of best practices to consider as you develop OKRs for your company, department and employees.
Know Your Strengths and Weaknesses
Many businesses start OKR development with a SWOT analysis (strengths, weaknesses, opportunities, threats). This process helps companies identify what they are best. While some leaders may find this technique simplistic, it’s a great way to figure out what your company’s vision is and your ultimate goal. It provides you with a great framework to start defining your organizational objectives.
Look Ahead 3 Months, 1 Year, 5 Years
The vision that you have for your organization should be reflected in your company’s objectives. Organizational objectives can be a mix of both short- and long-term goals.
Start by determining your five-year goals. Where do you see your company in five years? What do you want to have achieved? Then think about the strategies that will get you there. These strategies are the framework for your one-year objectives. They will outline what you have to do right now and what your three-month or quarterly goals should be in order to support the business strategies that will get you to your five-year goals.
- Follow the SMART Model – Try to make your objectives and key results SMART (specific, measurable, attainable, relevant and timebound). For example, as a new business owner, your long-term goal is to be recognized as the best company in your industry. Instead of setting your organizational objective as “Being recognized as the best company”, you would apply the SMART model to your objectives and ask the following questions:Specific – How do you want to be the best? (ex. “Best Place to Work,” “Best Workplace for Parents,” “Top Business for Women”) On what scale do you want to compete? Do you want to be the best company in your area or in the world?
Measurable – How will you know when you have achieved your objective? What benchmarks are you going to use to measure your success?
Attainable – Is this objective achievable given your resources? What are the obstacles that you are going to encounter, and can you get past the hurdles?
Relevant – How relevant is this objective to the company and its employees? Will it benefit your organization?
Timebound – When do you want to achieve this objective? Give yourself a deadline.
Taking into consideration the SMART model, your objective can be defined as “Getting the Best High-Tech Company award by the Local Business Board by the end of [DATE]”.
- Think About Who is Contributing to the Objectives – Organizational and departmental goals are easy to confuse, especially if you’ve adopted a flatter organizational structure. In any case, ask “who will contribute to the success of that objective?” and “who will have the greatest impact on the objective and its key results?” If anyone in the organization can contribute to the objective, then it is on the organization level.For example, “Bring in $1 million in revenue” affects your PR, marketing, HR, engineering teams and so on. On the other hand, “Expand our team by 50” is more of a departmental or team-based objective as your HR department or recruitment team will have the most impact.
- Don’t Underestimate the Power of Brainstorming – Many companies leave the organizational objectives to their executive team since these objectives are more high level. However, it’s important to ask for employees’ feedback, especially frontline workers who interact with customers. They know things about your business and your customer that the executive team might not.You want to gather as much information as possible about your internal processes and clients’ needs before setting your organizational objectives. Think about adding a 360-degree feedback component to your objectives setting. The more information you have to work with, the better.
How Paycor Helps
Setting organizational objectives is a daunting task. Once you’ve created a framework around your company’s goals, the most important thing for you to do is to communicate them to your employees. Engage your employees by clearly showing them where your company is heading and how you want to achieve your objectives. That’s where Paycor can help.
Paycor Talent Development will move you beyond the once-a-year performance review so you can create a culture of continuous development, anchored in your company’s OKRs. Our solution helps you align your workforce to your company’s top priorities, and it shows employees where they’re making the biggest impact. With automated workflows, prompts, tasks and notifications, we remove the manual burden on Admins, Managers and Employees and allow teams to easily see upcoming activities and ensure all priorities are being met. This low touch highly effective platform gives everyone time back in their days to focus on what really matters.