If you can believe it, it’s almost 2020, which means many businesses are already strategizing and setting goals for next year. Setting goals is a proven method for success, but there are multiple ways to go about the process. One practice that has been especially impactful for the team here at Design Manager is OKR Goal Setting. OKRs measure Objectives and Key Results. Popularized by John Doerr, an acclaimed venture capitalist and author of the Measure What Matters, this strategy was used to grow brands like Google, YouTube, and Intuit.
While setting objectives and results is certainly nothing new when it comes to goal setting, how these factors work together is what makes the OKR strategy so beneficial. The Objective is meant to be bold and aspirational, and representative of the thing you most want to accomplish. The Key Results are how you get it done. Key Results are measurable, finite, and always time-bound. Maybe most importantly, OKRs are intended to be collaborative –every person in an organization has an OKR that feeds up to the overall company vision, mission, and ultimate objective. It’s a strategy that works for businesses of all sizes and sectors and can be especially beneficial in stages of rapid growth.
Adopting OKRs to Improve and Grow Your Business
When you adopt OKRs you will almost immediately notice that this method has a profound way of aligning your strategy across your company. Instead of working for siloed or disparate goals, the entire company is pushing toward an ultimate achievement. This not only impacts the measurable way in which your business grows but the way your business operates on a personal level. Here’s how:
1. OKRs Help You Find Your North Star
“Truly transformational teams combine their ambitions to their passion and their purpose,” said Doerr in his 2018 Ted Talk. Setting OKRs starts with forcing you to define your true mission and values, because the company-wide Objective is tied to your vision and mission. It may not tell you what the most important thing is for your business, but it helps define the framework to get you where you want to be.
2. OKRs Require You to Execute Against Your Objectives
A common problem in many businesses is spending time creating strategies but failing to execute on them. With OKRs, strategies are linked to tangible metrics and each member of your team is held accountable. Goals are public and part of the company conversation. Following an OKR strategy demands that you check-in against your goals on a regular basis. Typically the cadence for creating OKRs is quarterly with reporting done weekly. Which means you don't have the option to let them fall off track.
3. OKRs Empower Your Staff
The benefits of OKRs are felt by each person. Often the goals are a stretch, so you are asking people to learn and to grow. This may be uncomfortable for some, but it is a powerful tool for helping your team become more self-directed. When individuals feel that there is a tangible impact as a result of their work, they feel a stronger sense of empowerment and accountability.
4. OKRs Require You to Rethink What ‘Failure’ Means
In the OKR framework, your Key Results should be aggressive to the point where you are likely to see approximately 80% success. In fact, if you achieve 100% then the Key Result is probably too easy. To account for the 20% of ‘failures’ you need to rethink what failure means, which can actually be a positive experience. Because in the land of OKR, failure presents an opportunity to learn and to evaluate what isn't working, and seek to understand why. This single feature of OKRs probably requires the biggest learning curve, but when you start to reframe the concept of failure, it opens up a whole new world of possibilities.
5. OKRs Help Identify Your Strengths
When you hit and achieve initiatives that work, OKRs give you the data to know where you can double down to grow your business. That’s where OKRs really help ensure business success, by measuring what is and isn’t working, and where you can accelerate growth.
Implementing OKRs Into Your Business Strategy
An initial company-wide OKR strategy session should be conducted to define what is referred to in the OKR process as a BHAG (Big Hairy Audacious Goal). A BHAG is a strategic business statement that is similar to a vision statement, and sets a long-term 5 or 10 year goal. After that is complete,you need to set the OKR for the year. This is the company OKR each team will use to define their particular OKR, so the company OKRs should be public. All team OKRs should tie back to the company-wide one, and each individual should have their own OKR. This is a collaborative process that involves active engagement across all levels to determine what OKRs might look like for each business unit.
At the beginning of each quarter (or another semi-regular interval), OKRs are assessed with a process for learning and finding ways to stay on target with the annual OKR. It’s a data-gathering time that can lead to meaningful conversations about where the company is going and how every person is contributing to taking them there. It’s also important in this process to identify what factors may be out of the company’s control (i.e. market shifts, natural disasters, team transitions, etc.). This may help with planning for the next year, or identifying a need to shift gears.
Getting your Team On-board
Adopting an OKR strategy may require a major culture shift for some companies. For businesses that struggle with ‘failure’ or don’t have a strong culture for company-wide endeavors, this can be particularly difficult. To that end, transparency and open conversation from the management level on down is key.
Following the ADKAR Method (Awareness, Desire, Knowledge, Ability, and Reinforce) is one way to bring an effective OKR strategy session to your team. Communicate and raise awareness of what you are doing, and be sure to express why. Provide your teams with the knowledge they need to actively participate and continually reinforce the importance of regular updates and open conversation.
You will also need to establish a company-wide culture that redefines the concept of failure. This is a culture change from the top down, and especially in a small company that is in an early stage of growth, be careful of morale and be very cognizant of your pipeline for that quarter so you are not setting overly hard goals in a time when it could be especially difficult for team members to achieve some level of success.
Adopting an OKR Strategy In 2020
Want to learn more about OKRs and see some great examples that you can use to help build your own OKR Strategy?
- Here is a video on how Google sets up their OKRs
- All about OKRs: How to set them up and track them
- OKR Examples and how to write them
Using a tool like Trello or Weekdone will help keep all goals public within the company so that everyone can stay on track to meet them. Take some time to plan for a great 2020 today!