The most important aspect of running a successful business is setting the right goals and executing them well. With so many opportunities and distractions that face businesses, knowing what goals to set and how to measure them is a challenge facing many businesses.
Poorly done goals are a waste of time, an empty management gesture. However, the right goals can be a motivational management tool that helps provide your team with a clear objective as to what is most important, what to improve, and a compass to better discern what tradeoffs to make in the day-to-day whirlwind.
One goal setting framework that has been adopted by various successful companies like Intel, Google, and Spotify is called Objective Key Results (OKRs).
What are OKRs?
OKRs was developed by Intel and later evangelized by John Doerr when he became an early investor in Google. OKRs is a simple goal setting framework that works for organizations, teams, and individuals.
Let’s break it down:
OBJECTIVE – simply the “WHAT is to be achieved or accomplished.
In other words, what do you hope to accomplish such that at a later time, it’s clear where you have reached. Choosing the right objectives is one of the hardest things to do and requires a great deal of thinking and brainstorming.
KEY RESULTS – HOW we accomplish it.
Effective KRs are specific, time-related, limited in number and most importantly, they are measurable and can be verified. They express measurable milestones, which, if achieved, will directly advance the objective.
As a goal setting framework, OKRs can help organizations with solid fundamentals (sound judgement, strong leadership, creative workplace culture) focus their efforts on the same important issues/challenges/opportunities throughout their organization.
When you identify your company’s strategy, you help your employees see how they are contributing to the big picture.
How does OKRs compare with other goal setting frameworks?
Many organizations and teams are setting goals incorrectly and most companies and teams simply do not have clear goals. Then, as John Doerr highlights, there are also organizations who set objectives and meet them. They ship their sales, they launch a new product or service but they end up lacking a clear sense of purpose to inspire their teams.
So how do you, as a leader of your organization set goals correctly the right way?
It starts with answering “Why?”.
Truly transformational teams combine their ambitions to their passion and to their purpose, and they develop a clear and compelling sense of why. – John Doerr
Why do OKRs work?
In short, OKRs help provide businesses with a clear focus. When done right, they tell your team what you’re doing this quarter and as important, what you are not.
How do you set OKRs and Roll Them Out?
- Pick 1-2 objectives – more OKRs can lead to distraction and may over-extend your team’s efforts
- When expressing your “OBJECTIVE”, use expressions that communicate a clear destination, e.g. “Improve employee engagement”, “double offseason revenue”, “Be ranked as a top place to work”
- When developing your key results, determine 3-5 key results per objective
- Remember, proper and effective Key Results describe outcomes, not activities (different from 4Dx).