Have you already assimilated all the basic resources on OKR (Objective and Key Results)? Great! Now, you need practical advice on how to implement the method. I am sure you are here for this. So, I answer without delay to the nagging question that probably comes up in your head: “OKR, how can you increase its success?”.
If you want to do a thorough review before proceeding, you will find the complete guide on how to get started with OKRs useful.
OKR how to find the right mindset?
I know you’ve already stumbled upon the OKR culture concept. The gurus of the subject insist a lot on this aspect. Why? Because once you have ‘set’ the right OKR mindset you will have taken a big step toward the best performance of the Objectives Key Results method.
Proof of this are the sensational success stories of big companies.
Google, Microsoft, and LinkedIn – in addition to having spatial turnover in common – also share the use of the OKR methodology. Do you know why? Because their visions require ambition on the one hand and concrete progress on the other. And the OKR approach meets both needs. The OKR framework, in fact:
- Help organizations find the way to a challenging goal
- It gives teams the tools to walk it
- It keeps track of the path taken and what to do.
But it is the “how it does it”, the real plus of the OKR method. To cope with a rapidly evolving market, you need a mentality change. Managers and teams must be ready to react to changed conditions, adjusting the route, but without ever losing sight of the landing place.
If what works well today may not work tomorrow, we need an agile system that aligns the organization in a progressive and collaborative way. And this is regardless of the reference sector or the size of the company (multinational, non-profit organization, or startup).
John Doerr also says it in “Measure What Matters“, OKR book considered the Bible on the subject:
“OKRs are useful for any eventuality and in various contexts. Just like a Swiss army knife “.
In summary, to implement OKRs successfully, you will need to focus on the culture, even before the process. And this requires a radical change of mentality. In particular, against a word that scares us all: failure.
If during the journey towards a challenging goal, the team raises the bar and travels only a stretch of road, the evaluation will be positive. Under certain conditions:
- If individuals have given 100% of their resources to reach 80%
- If during the process the team produced value in terms of innovation
Failure understood as a learning area thus becomes the other side of the coin with respect to stretch and ambitious goals.
In summary, the three keywords of the OKR mindset, in my opinion, are these:
The focus is part of the OKR culture, but it deserves a speech in itself. It is in fact considered one of the OKRs superpowers. The OKR focus is directly linked to the concept of vision and mission. Once the strategic priorities have been outlined, different objectives are targeted: strategic, tactical, and operational.
What you have to keep in mind can be summed up in one assumption: what we want to achieve tells us what we will have to measure and, together, these two elements tell us who we are and who we want to become.
This is a key step in the development of the OKR method. That’s why I would like to fix a couple of basic concepts:
- Do not constantly change direction: after you have defined the OKRs, it is easier to adjust the milestones than to set a new route (objective).
- Keep the number of goals low – the fewer there are, the higher the focus. One goal and 3 key outcomes that measure it are already enough to get started.
- Learn to say no: By limiting the number of things to focus on, OKRs bring out the really important ones. In this way, the activities that make a difference will benefit from maximum attention and maximum drive. To the others, you can simply say: “No”.
OKR how to implement them in established companies?
Do you have an interesting project that you would like to carry out? Or does your company’s management have an ambitious idea? I would not reject the hypothesis of starting with the OKR methodology to ground the vision and translate it into milestones.
- O (Objective) = What
This entry describes what you want to do to support the higher mission.
- KR (Key Results) = How
They are progress indicators inserted into a time-based roadmap. Each goal has 2 to 5 key outcomes that measure it (usually 3).
In larger organizations, OKR teams align with strategic corporate OKRs and are monitored through regular check-ins on a usually quarterly (Quarter) basis. For widespread organizations, it may be worth evaluating OKR software that can automatically aggregate data. This tool is used to make people understand, in real-time, how they are progressing. Not only! With transparency being a feature of OKRs, each team will know exactly where the others are. No communication silos! This advantage is very useful, for example, when implementing OKRs in Smart Working.
Another factor to keep in mind is time: we don’t have to apply the OKR method right away in all business sectors. In order for the OKR mindset to be accepted as part of the corporate culture, it is good to proceed step by step. Usually, the model adopted is the bottom-down one: the methodology is first tested on the managerial level, and then, after it has been internalized, it is spread to the underlying levels. The aspect that the OKR manager does in this first phase is the awareness that failure (on ambitious goals) has no impact on the evaluation of the team’s performance, nor on remuneration.
OKRs are not a classic MBO (Management By Objective) method: goals are challenging and long-term, key results are not a to-do list.
I’ll explain. Stretch goals take more than a Quarter (Q) to complete. Their evaluation, on a percentage basis, takes into account the fact that the work team stretches out of the comfort zone to innovate the BUS (Business As Is). This means that a score of 30/50% is undoubtedly low and requires careful review analysis. Conversely, a percentage of 70/80% can mean that significant progress has been made, even without hitting the target.
Do you know how to calculate the OKRs? Calculate the average given by the score of each associated KR: the value obtained will correspond to the score for that specific objective.
OKR method how to use it in Smart Working?
The alignment between teams, and between each team and the higher goal, is what makes the OKR and Smart Working combination a winner. Every KR achieved is always a success for everyone, regardless of the way of working.
The organization has not only a shared direction but a common mentality, sanctioned on the one hand by the objectives and key results and on the other by the commitments made by collaborators in providing their contribution. In this regard, it is essential that each KR has an owner, whether it is an OKR team or an individual OKR: the owner is responsible for tracking progress and finding solutions to advance towards the desired result.
The OKRs environment is collaborative and at the same time guarantees individuals an important autonomy: if you know clearly where you are heading and stay focused on your responsibilities, your performance will benefit.
And what about management struggling with OKRs in Smart Working? The corporate priorities thus described are extremely specific and transparent. This allows managers to exercise less invasive control, but in any case constant and planned. The weekly check-ins are an opportunity to make sure that everything is proceeding: the evaluation in progress is useful to adjust the shot in case something does not go as desired.
Startup and OKR: yes or no?
Do OKRs also work for startups? The answer is yes! The most striking example is Google. Big G has been using the objective and key results method since its inception, thanks to John Doerr. However, it is not the exceptional case that I wish to highlight, but rather why the method can work.
Innovation is the strongest link between startups and OKR. Some must present themselves on the market with disruptive ideas. The others have a mindset oriented towards overcoming the status quo, forcing them to rethink processes in a flexible and evolutionary way. This results in three benefits that impact at different levels of the organization, when it is in the startup phase:
- Business Progress
Returning to Google, Larry Page credits the OKRs for fueling business development. Such as? By giving the young startup, back in 1999, a direction and a method to measure improvements.
- Effectiveness of communication
When you implement OKRs correctly, you can make the most of all the benefits. At that point, you will have at your disposal not only a framework for defining strategic objectives but also an effective communication tool. This allows individuals and teams to always stay on the same frequency, both in relation to the mission and to the commitment.
3. Effort aligned
Not wasting resources is vital for startups. Everyone’s effort must be aimed at progressing towards the greatest goal common to all. Here’s how OKR alignment works. The CEO and management set the strategic objectives, identifying the mission and identifying 2/3 KR in the long term. The core teams, such as the development team, own a KR and transform it into their own medium-term O (Quarter). In doing so, everyone works focused on what matters and on what has value for the organization. I’ll give you a practical example right away.
Startup OKR examples
Our startup is called WeeWild and operates in the luggage sector. This is their mission: “We produce lightweight and 90% recycled travel bags and suitcases with replaceable parts. The only footprints we like are those of those who walk the world “. Let’s see the company OKRs and how they are reduced in the OKR team.
O = increase the business to finance the next investments and grow
KR 1 = Increase revenue up to X Euros by Q4
KR 2 = Launch 2 new products by the end of Q3
KR 3 = Reduce customer churn rate from X to Y by the end of Q3
The marketing team decides to name the KR 3 and make it their target, transforming it in this way:
O = Reduce the customer churn rate from X to Y
KR 1 = Increase ROI per customer by up to 10%
KR 2 = Increase the Customer Lifetime Value (CLV) up to XY years
Final tips on OKR how to do in practice
At this point, we know that OKRs are used to define goals, at an organization, team, and individual level. We also understood that ‘how they do it is what makes them perform in a frantically changing market.
Priority, focus and alignment are the key concepts with which I advise you to familiarize yourself in order to successfully implement the OKRs.
This short checklist will help you move in the right direction:
- Be ambitious with O (Objective)
- Align individual OKRs and OKR teams to superior strategic goals
- Do not confuse KRs, results, with operational tasks
- Assign the Key Results to their respective owners
- If you can’t measure it, it’s not a key result
- If the goal is not traceable, then that goal is useless
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