The OKR (Objectives and Key Results) method is a proven method businesses use to set and achieve key business objectives. In simple terms, OKRs help leaders to put structure around a goal so that its achievement can be fast-tracked.
While their structure and what they contain are paramount, the key to their success is buy-in and alignment from every level of your organization.
To create an OKR, executives first set annual, quarterly or even monthly objectives. It is then up to managers to set goals for their teams. At that point employees can define their own individual objectives in relation to the OKR for which they’ll be held accountable.
An OKR can help a business achieve success on multiple levels. Let’s take a look at how you can help your team successfully set up OKRs.
What are OKRs in Business?
Objectives and Key Results are designed to drive teams to specific outcomes. Even so, the objectives themselves are generally non-specific by intention. The objectives should be seen as a direction. The initiatives that are developed by the management team will be more prescriptive in what needs to be done.
OKRs can be focused around:
- Growing revenue
- Increasing customer retention and growth
- Upgrading internal systems
- Improving marketplace positioning
- Increasing market awareness
What are Examples of OKRs?
It’s important to understand that while a company can have a set of OKRs, it’s not uncommon for units within the business to have ones as well although these should be compatible with the company’s OKRs.
Sales teams may want OKRs to shorten the sales cycle, increase the average individual sale or improve the win-to-loss ratio.
Marketing teams may use OKRs to increase customer awareness, position the company as an industry “thought leader” or improve the brand’s public perception.
OKRs aren’t only created for external goals. The IT team can build an OKR that would help them to facilitate a system upgrade, launch an app or automate certain tasks.
How Do You Write an Individual OKR?
OKRs should not be constructed in an executive vacuum if you want them to be successful. Because OKRs are omni-directional tools, there should be input from all team members who might be affected.
Yes, this can create a lot of discussion and “I want to sees…” but the goal will be for you to keep the group focused on the goals that need to be met and then structuring the OKR to get there. Remember the more specific you can be, the better your chances of success.
7 OKR Best Practices
Creating goals that inspire your people and produce results takes real skill. But it can be just as difficult for employees to find objectives that are measurable and align with the bigger picture of what the company is trying to achieve. If employees are new to OKRs, it can be easy to get overwhelmed. That’s why we’ve collected these tips:
- Keep it Simple
Focus on objectives you know you can achieve in the given timeframe. Prioritize your objectives according to what the business needs most. Remember, there’s no magic number for how many objectives you should have—it depends how complex they are, as well as the time and resources available.
- Be Specific
When setting objectives, brainstorm different ways you can reach the end result. Draw out your action plan to be more specific on how to achieve your objective. For each key result, think about how performance can be evaluated. The more specific you are, the clearer expectations will be. Concise objectives mean you’ll know exactly what’s needed to complete your goals.
- Cascade Your Objectives
A common problem for employees setting objectives is struggling to see how their jobs contribute to overall organizational goals and success. How does a payroll clerk help their company reach 10,000 users? The solution is to cascade your objectives: from an organization level, to the department level and finally to an individual level.
- Make it Measurable
Key results need a unit of measurement. It doesn’t matter what: it could be to write 10 blogs per month or to reach $10,000 in revenue. What you’re trying to avoid is a situation where you’re not sure whether a goal has really been reached or not. Managers and employees can meet 1:1 to add metrics to quantifiable goals.
- Don’t Worry About Stretch Goals
Goals should be attainable yet challenging. Sometimes managers worry that easy goals will be demotivating. But are stretch goals a good idea? It all depends how realistic they are. Ambitious goals are great, but don’t set employees up for failure.
- Break Key Results into Smaller Goals
Create mini-goals within your key results. Knowing what you have to do to achieve your key results makes objectives more specific. These mini-goals act as milestones. But when goals are too broad, it can be hard to maintain focus on achieving them—these steps along the way help you stay on track.
- Celebrate and Recognize
Reward and recognize yourself and others when a milestone has been reached no matter how early that happens in the overall process. Positive reinforcement helps sustain best practices. Don’t wait until the very end of an objective to recognize effort—celebrate incremental progress too. Encourage all co-workers to share their OKRs publicly and create a support system within your team.
How Paycor Helps
Paycor understands how OKRs can help a business see success, which is why our Talent Development product is designed to help you develop and drive OKRs within a business unit or across the organization.
With Paycor, you can modernize every aspect of people management, from the way you recruit, onboard and develop your team, to the way you pay and retain them. See how Paycor can help the leaders of your organization solve the problems of today and tomorrow.