Some tips for setting your company/Team OKRs (Objective Key Results)

In a 2015 survey conducted by the MIT Sloan School of Management and the London Business School, it was found that only ‘one-third’ of 11,000 senior executives and managers could list their company’s top three priorities. That’s a huge problem. A company can be tugged in too many separate directions overtime as departments and employees make decisions without clearly set priorities.

What Are OKRs and how different are they from other Performance measures?

Objectives and Key Results (OKRs) as John Doerr (who worked at Intel and introduced Google to OKR) defines OKRs as not just What is to be achieved but also How to get there! Executives see OKRs as a Goal-setting mechanism to give everybody ‘visibility’ and ‘transparency’ into what's going on. The biggest problem OKRs solve is ‘prioritization’. Performance measures even if very intricately defined still remain ‘guidelines’, while OKRs are ‘frameworks’! Unlike performance measures which are essential for measuring the health of the organisation, OKRs are flexible, easy to modify and even pivot. Contrary to commonly held belief, OKRs are not the usual top-down command and control based approach. Many of the Objectives are actually bottom’s up, where the origin is the people and functions,  in the front-line of business operations. This very unique design of OKRs makes it naturally engaging to the workforce. 

OKR fundamentals-

·        Well-crafted company-wide OKRs are simple but pack a punch.

·        Each objective is completed and measured by a few KRs. Determining these KRs, forces an organization to articulate what metrics it will use to measure progress on its objectives.

·        OKRs are made publicly available within the organisation.

·        OKRs have cycles for setting, reviewing, re-setting, revising quarterly and yearly.

·        Ideally not more than 5 Objective and not more than 3-4 KRs per objective are recommended

·        Nearly 60% Objective and KRs set by the individual and rest by manager

·        OKRs are not linked to performance reviews and decisions of career advancement or otherwise or bonuses, pay revisions, etc

·        Quarterly reviews are self-graded and self-reviewed by the individual worker, additionally reviewed by the reporting manager.

o  Grades should average 0.6 or 0.7 so there is room for improvement; 0.4 or below is bad, but a learning opportunity, not a failure

·        Consultant to help design format for Masterclass meets and advise on OKRs blogs and talk shows format. We understand, people want to learn from leaders not trainers. 

Does an Organisation need both OKRs and KPIs?

OKRs don’t replace KPIs. In all role-based organisations, KPIs have found unique importance as that defines the roles and it’s impact on outcomes that the role is created to make. KPIs usually are drawn from multiple sources, including business plan, role in the hierarchy that is administratively defined to take role based decisions, etc

OKRs set organisation’s priorities and direction for the company, it’s departments, functions, key executives and all other workers.

KPIs are key to everyday functioning of the departments even when organisation is backed by OKRs. Company-wide OKRs are common for all and they apply equally to all in the organisation, whereas KPIs are role specific and and they hold everyday operations and functions intact. OKRs framework encourages and aligns different roles to create their own goals (encourages creative freedom) within their role to achieve organisational objectives through their own and uniquely aligned Key Results. This is real example of distributed Objectives and Key Results, which drives higher levels of engagement, work satisfaction, provides opportunities and challenges to unleashes untapped talent. OKRs create more situational leaders than traditional KPIs based jobs! 

HOW TO BEGIN ON THE BRASS-TACKS?

KICK-OFF MEETING WITH CHAIRMAN/CEO/Founders/MD AND KEY EXECUTIVES WHO WOULD SET COMPANY-WIDE OKRs-

CREATE:

We recommend to start with a full-scale OKRs principles and frameworks orientation at an exclusive workshop for key executives, and help them discuss and build understanding on Objectives and Key Results examples from across business functions (Committed vs Aspirational). Include standard rule of Andy Grove’s seven rules for basic OKR hygiene is a great place to start your OKR “calibration” exercise.

This will help the executives get ready for setting Objectives and  Key Results for each of the standard rules for OKRs against key business . This will be followed with working sessions with each individual department leaders to think through and list down individually what OKRs they would set company-wide and what business metrics they would use to measure progress, how and when would they review it and what level of their personal vision and resolve they are backed by.

BRAINSTORM TO ARRIVE AT TOP 5 TO 7 OKRs:

The consultants will then help with a Brainstorming session using all OKRs that leaders have brought to the table and they discuss and propose to the Chairman/CEO and seek feedback and mind-share of all heads of business functions present in the meeting. This will help the board select 4-5 OKRs and the at the end of this meeting have well-crafted company-wide OKRs ready.

COMMUNICATE AND EXECUTE:

The immediate next step will be for the CEO to communicate and share OKRs company-wide. He uses power of his leadership, vision to take along people on the new exciting journey and encourages people to join subsequent OKRs workshops that will follow to establish team level OKRs.

A workshop plan and calendar of events will be circulated to all teams and the consultants will conduct workshops for OKRs setting for functional and departmental levels as applies. It may also happen that some objectives may not have cascaded to all levels and may have jumped directly to a lower level for setting their Goals and KRs.

We will also demonstrate on how to use the performance management tool to record and review the OKRs.

OVERSIGHT AND GOVERNANCE:

Board and C level executives must be given overview of the whole OKRs process and progress of cascading of the OKRs. In addition to the work described in the previous sections, the consultant will also help ensure:

·        Individual worker level OKRs are set by trained Functional/Department leaders

·        Consultants will review all input OKRs for departments and teams, review, prepare feedback and set up follow up meetings with leaders to help them fix gaps and make OKRs more quantifiable/qualifiable, etc

·        Consultants will conduct a workshop with Role-plays for all leaders who would conduct weekly WINS review meetings.

·        DASHBOARDS AND REPORTS: All executives based on their roles and levels would have access to customized OKRs dashboards and would have ability to pull reports for real-time assessments and actions. 

WE WILL DISCUSS HOW TO REVIEW OKRs IN THE NEXT ARTICLE.

Please share your thoughts and feedback.

Recommend you to read: MEASURE WHAT MATTERS BY JOHN DOERR

Also, must watch this TED talk by John.