OKRs
A good way to tell if you're succeeding is if you plan ahead and decide how to measure it
What are they?
Objectives and Key Results (OKRs) are a way to set and track business goals. It allows a team to quantify ambitious goals and track progress towards them.
A more commonly used way of tracking and measuring business goals is through Key Performance Indicators (KPIs). However, I found that it's more difficult to link broader, more lofty business goals to KPIs as they boil down to specific numbers that have to be reached.
Personally, I feel that OKRs offer more flexibility in terms of what "success" means and whether a team is meeting their goals or not.
How do I use OKRs?
Objectives act as the "North Star" and the Key Results are how you'll be pulled towards this star
Objectives
An objective/business goal needs to be decided on first. Usually, these objectives are decided on at the highest management level, for example, the C-suite and heads of departments. They are ambitious, lofty and more often than not, vague. Usually, there are several business goals for the company that touch many areas of it's operation/product.
An example could be:
Increase the number of customer purchases
This objective/business goal will be cascaded down to the various departments associated with the website such as engineering, product, UI/UX and marketing.
From there, each department will decide on either coming up with their own key results to drive the objectives or splitting the objectives down to smaller ones. This will depend on the size/maturity of the department and whether they have smaller teams that can own smaller objective.
An example of breaking down the above objective into smaller, engineering department objectives could be:
Reduce bugs and defects released to production
Improve website performance
Improve user experience for the website
Each team's objectives within a department should be able to be rolled up to the department level objective.
Key Results
Once cascaded down, each team/department will decide on several key results to achieve the objective. Each key result is then tracked and measured at regular intervals to determine whether the team/department is moving in the right direction.
OKRs are meant to be ambitious and as such, they don't necessarily need to be fully met. It should be clearly explained to the team that they are stretch goals and that failing to achieve them is totally ok.
For example, key results are commonly measured from 0 to 1.0 in 0.1 intervals but can be measured by any standard scoring system. Its most common for teams to attain 0.6 or 0.7 on their key results. If we are hitting 1.0 every time, it means the goals aren't ambitious enough.
Characteristics of OKRs
Specific
Measurable <- Most important
Attainable
Relevant
Timebound
KRs should be assigned to an owner to ensure accountability and ownership.
OKRs should be short, concise statements that are easy to memorise.
OKRs should be ambitious and outside of the team's comfort zone.
Example OKR cycle
Q3 2022 - Company level business goals are decided upon and cascaded down for 2023
Q4 2022 - Each department/team decides on their own objectives and key results that relate to the company level business goals. These OKRs are agreed upon as the north start for 2023.
Start of each quarter in 2023 - Review the OKRs and your current progress towards them. Set a goal of where you'd like to be by the end of the quarter for each OKR.
This aids in planning and prioritisation of initiatives during quarterly planning.
End of each quarter in 2023 - Each department/team that owns OKRs will meet to evaluate their progress towards them.
This allows for a post mortem of the quarter and helps planning for the next quarter.
Benefits of OKRs
Allows for individuals within a team to be aligned towards a shared strategic goal.
When properly planned and communicated, it can boost employee engagement by ensuring everyone understands the purpose of their work.
Allows for a common language/framework to be discussed across the company.
Fosters a greater sense of teamwork and collaboration within a team and across functions as they can share the same objectives.
They allow for vague business goals to be translated into more actionable/measurable action items or initiatives
References
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