Every organization that wants to grow should have a tried-and-true method of setting goals. There are a few different frameworks to choose from, but which one is right for your business and goals? Today, we’re here to give you the inside scoop on OKRs so you can decide if they’re the best fit for you.
This article will answer all your questions surrounding OKRs, the framework and some examples of strategic OKRs.
What is an OKR, and what does it stand for?
OKR stands for Objectives and Key Results. It consists of an Objective, which is the goal or thing you want to accomplish. Several Key Results are attached to that objective, which are the results you need to attain to get to your objective.
OKRs are goal-setting frameworks that help businesses implement and accomplish their strategies. OKRs help teams identify key company objectives, set realistic goals, come up with a timeline to achieve those targets and ensure those goals are related to the overarching objectives of the business. Many companies use OKRs as a quarterly goal-setting technique.
Why are OKRs important?
Most organizations set smart goals at the beginning of each year. The team will work on them for about a month, then forget about them. This leads to passive management, making it difficult for team leaders to measure performance and track employees’ progress towards achieving those goals.
Team members may feel disconnected from the overarching company goals, and employee engagement may decline. To combat this, organizations can set tactical OKRs.
Benefits of OKRs
The benefits of OKR goal setting are almost endless, but here are a few key reasons why you should set OKRs. They:
- Allow for a better understanding and a focus on results that matter most
- Provide increased transparency and clear direction to all team members
- Boost efficiency and alignment with corporate goals
- Track progress updates toward team goals
- Inspire teams and help move the company strategy forward
What is the OKR framework?
The OKR framework includes a few rules to help employees prioritize, position and assess the outcome of their efforts. OKRs help close the gap between planning and execution so that employees have more of an outcome-based, rather than output-based, approach to their work.
OKRs consist of two components: the Objectives, and the Key Result(s).
The Objective is the goal you want to achieve sometime in the near future. Typically, it is a high-level objective, and it is not a technical, numerical or quantitative goal. Some broad examples include:
- To increase the number of sales
- To reduce employee turnover
- To improve the time it takes for customers to make a purchase
The Key Result is the part where you get into the nitty-gritty details. It is a quantitative, measurable outcome needed to achieve the objective. For OKRs to be effective, you need to break down the goal into realistic results that you can track.
Let’s say your objective is to increase the number of sales. Some key results might be to close five more deals per week and to grow your customer base by 20%.
To break it down a little bit more, think of the objective as a point on a map. Think about where you want to go and set a clear direction for getting there. You can think about key results as road signs along the way that tell you how far you have to go. They show how well you’re progressing towards achieving the objective.
Examples of OKRs
Here are some real-life examples of OKRs, broken down by category.
Some of the most common team OKRs in different departments include:
Objective: Increase the number of weekly newsletter subscribers by 3x
- Implement more CTAs on the website home and subsequent pages
- Begin a campaign that offers discounts for new subscribers
Objective: Increase brand awareness by the end of the next quarter
- Secure a spot at the annual business conference
- Conduct 10 media meetings
Objective: Personalize the sales approach for new customers
- Reach 80% on the customer satisfaction survey
- Ask customers three personalized questions
Objective: Increase sales in the US
- Hire a salesperson local to the US
- Research 10 US competitors and see what they do differently
Product development OKRs
Objective: Start user-testing the product
- Conduct 30 virtual user-testing sessions
- Get 50 customer feedback responses through surveys
Objective: Expedite delivery speed of a new version of the product
- Hire two more product development team members
- Reduce the number of untested features to 3
Customer service OKRs
Objective: Improve customer retention and reduce the number of customer complaints
- Reduce call wait time to less than 10 minutes
- Implement weekly meetings with the customer success team
Objective: Improve customer experience with support
- Reduce ticket resolution time to 3 business days
- Implement a chatbot to help with less complicated customer queries
Objective: Improve employee engagement by 10%
- Provide more training opportunities each month
- Provide opportunities for employees to give anonymous feedback
Objective: Reduce operating costs by 5%
- Talk to HR about a company restructuring to eliminate late payment fees
- Improve supplier payment process
Personal OKRs are just as beneficial as company OKRs. Employees prioritizing personal development often see higher success in their professional lives, too. Here are some examples of personal development OKRs.
Objective: Increase productivity at work
- Take a short break when feeling distracted
- Set smaller productivity goals
Objective: Become confident at public speaking
- Lead one team meeting per month
- Practice speaking to small groups of people more often
How to track OKRs
OKRs won’t be effective unless progress is reviewed regularly. Tracking OKRs every week will ensure that everyone keeps the top priorities in mind and help adjust the roadmap accordingly.
It’s best to start with a simple spreadsheet for your first cycle of OKRs. There are many new concepts to learn, and it’s best to minimize the disruption for the team. Then, you can switch to a more scalable OKRs software once you’re comfortable with the framework.
All OKRs should align with the company’s direction and focus on long-term improvements and goals that can be accomplished within the next quarter. With an outcome-driven goal-setting process, employees can prioritize their work and clearly understand how they contribute to the bigger picture.