There are several other reasons goals can fail, including:
- The goal is too ambitious and so far from being achievable that there is no point working on it as you feel you’ll never achieve it.
- The goal completion target is so far off into the future that you just put it off as there is no urgency.
- The goal isn’t specific enough and so vague and hard to plan for as they may sound great, but you’re not sure how you’ll achieve them.
OKRs can provide the structure and direction you need to achieve your goals, whether you’re a company or an individual.
They create the purpose and direction you need to achieve and work towards, as well as offer strategies for how you’ll measure your progress, success, and then ultimately the initiatives to get you there.
Where OKRs work better than a single goal approach as they link everything together.
At the highest level, you have your company vision; below the vision there is the annual OKRs (3-5); then below these come the quarterly OKRs.
Each one is serving the next and is being achieved by all the initiatives (the work) being delivered by the teams and individuals day to day, week to week, and month to month.
What Is an OKR?
OKR stand for “Objectives and Key Results” and was initially created by Andy Grove in the 1970s while at Intel. Since then, OKRs have been taken on and used by companies like Google and Netflix((Medium: Objectives & Key Results)).
OKRs are a collaborative way to create goals for a company and individuals as they are not only ambitious and inspiring but also achievable.
OKRs were not only created to set objectives for companies but also to improve collaboration, engagement, and transparency between senior management and its employees. Having shared objectives throughout the company brings the whole workforce together to work towards common goals and then celebrate together when they’ve achieved them.
The objective within an OKR is the outcome you’re looking to achieve, and the key result is how you’re going to measure whether the outcome has been achieved.
Key results are what make OKRs measurable; they tell you if you’ve been successful with the objectives set up front as, without them, the success of an objective can be left open to opinion.
How to Create an OKR
An OKR consists of an Objective, which defines what you’re trying to achieve, and up to five key results. The key results are how you measure if you’ve achieved the objective.
Under the key results, you also have a set of initiatives, which are the activities or the work required to achieve the key results.
You create OKRs to set the overall direction for a company and create the alignment needed, so every employee is working with the same shared purpose.
While we will be discussing OKRs mostly at the company level, keep in mind that individuals can also use them for life planning.
A company typically has a single vision or a mission for the company, and this direction you want to move towards could be set for the next decade or even longer. This is the ultimate purpose that aligns your company’s employees and, in some cases, your customers on why you do what you do.
This vision sets your direction, which then allows the creation of the company OKRs, which are set annually. These 3-5 OKRs are the objectives that will move your company closer to that overall vision and are specific to what outcomes you need to achieve in the next 12 months.
Each company OKR has clear key results (up to five) that are measurable, so you can track progress and measure success. These company objectives encompass all parts of the business and can overlap over multiple departments.
The departments within the company then set group OKRs, which are set quarterly using the company OCR’s as the direction. Again, like the company OCR’s, they all have key results defined and agreed on so the departments can measure progress.
What Makes a Good Objective?
Objectives tell you where you need to go and should inspire and set the direction.
When defining the objective for your OCR, it has to be clear, well-written and free of doubt about what the outcome of the objective is.
An objective should always be an outcome that you may not initially know how to achieve, but you understand what the outcome is you’re looking to aim for.
It also needs to be balanced in how achievable it is. If the objective is to achieve 100% market share in your industry, that is not only too ambitious, but it’s very likely to be impossible.
You could also make the opposite mistake and make the outcome of the objective too easy (for example, increase our market share by 1%).
If the objective is too easy, too hard, or impossible, you’re wasting your time creating it as it offers no value, and ultimately the team will pay no attention to it and lose faith in the overall approach.
What Makes a Good Key Result?
If the objective sets the direction you want and defines the outcomes you need to achieve, you can think of the key results as the milestones to get you there.
The key results are how you’ll track progress so you can quantify and measure as you go to make sure you’re on track to achieve your chosen outcome.
If the objectives are well-defined and thought out, the key results are what keeps the team motivated and focused. This is because they’re measurable. Once complete, it can be a tick in the box to show not only progress, but also celebrate the success you’ve achieved.
These small, significant milestones keep the teams and individuals motivated, especially when working with quarterly objectives.
The vital part of creating key results is that they’re measurable. There should be no doubt if you’ve achieved a key result or not. For example, if you have an objective of “Increase revenue this quarter by 5%,” one of your key results could be:
“Sell 100 of our new training courses.”
If you’ve only sold 80 training courses, then you only achieved 80% of that key result.
How to Track OKRs
OKRs must be tracked and reviewed regularly.
The direction of the company, although this is an ongoing activity, is typically reviewed annually, but the company OKRs need to be reviewed quarterly.
A quarterly review would entail looking at the progress of the key results defined at the start of the quarter. These key results tell you if you’re going in the right direction through measurement and progress tracking.
A quarterly review also gives the teams a chance to review the OKRs when it comes to the value they’ll provide the company, the staff, and its end users.
What you created three months ago may not hold the same value today. Discuss the value of the OKR. Is it still pushing you towards the overall company vision, or do you need to change or potentially create a new one?
To review OKRs at the team level and the initiatives in place to deliver them, you need to meet at least every two weeks or even weekly in some cases.
Meeting regularly follows the same principle as the quarterly and yearly review as you look at how are you progressing. What is working and what isn’t?
The Bottom Line
OKRs are a great way to adapt your goals into a more structured and trackable format that will keep your goals on track.
The OKR approach gives you the ability to separate your long term and shorter momentum goals so you can stay focused and interested throughout the year.
Making them measurable by creating key results allows you to track progress through to completion, which is a great way to stay motivated and push to complete more.
Like standard goal-setting, if you don’t invest the time up front to create them correctly, you’ll either lose interest, or they wont deliver the value you had hoped for.
To be successful when implementing the OKR approach within your company, don’t have too many, make them transparent, make sure your teams are aligned, and check progress regularly.
If you do all of this, you’ll give yourself the best chance to reach your goals.