Why Medium-Sized Businesses Should Implement OKRs
There’s a vast gap between having a vision and making it real. Many businesses get trapped in this critical space, pursuing aimless ideas instead of identifying achievable outcomes, then making them happen.
Here lies the beauty of Objectives and Key Results, or OKRs. They take the stress out of business planning, setting organisations on a clear, easy-to-follow path to deliver on their goals.
Working within a proven leadership framework, you identify three critical areas – objectives (what you want to achieve), initiatives (how you will achieve it) and key results (the metrics you use to define success).
Once embedded in a planning strategy, your OKRs can guide you towards your overall business goals, stage by stage, measuring development and progress along the way.
Okay, so what are OKRs, really?
OKRs are an awesome way to focus on what’s really important in your business.
Cutting through complexity, they help you define realistic goals, then step you through the optimum way to get there.
On the face of it, it’s simple. You follow the signposts to reach your destination. The real art lies in creating clear signage, manageable journeys, and an accurate way of measuring how far you’ve come.
Objective. This is the description of your high level, long term goal. It should be concise, motivating, memorable and inspirational, something every team member can get behind.
Examples include boosted recurring revenue, enhanced customer/client experience, and improved data accuracy. Objectives should be specifically related to your market, customer and regulatory landscape.
Initiatives. These are the tasks or actions you undertake to help you achieve your objective. If you like, they are the means of getting you there.
This could mean installing new software or technology, setting up training sessions or introducing business coaching for individuals or teams.
Key Results. KRs are value-based performance indicators. They measure the progress made by individuals or teams in achieving the stated objectives.
It’s important to define specific metrics here. This could mean measuring progress by the volume of complaints to your call centre, the amount of online orders filled, the number of new customers, or website errors reported to staff.
Tips for OKR success
There are several things you can do to increase the likelihood of achieving your goals.
Consider a sliding scale of scores, with ‘1’ being a direct hit and ‘0.3’ being quite a miss.
Don’t worry unduly if workers don’t hit the mark. Use it as a motivator to work harder and smarter next time.
If you achieve ‘1’ every time, make your key results targets harder!
Always align OKRs with the vision, mission and values of your organisation.
Review progress frequently, say at quarterly or monthly intervals.
Use a small number of metrics to track the key results.
Objectives can be layered throughout the organisation, with different timelines. Three or four can be identified at CEO level, on an annual basis. Then each sector or department within the enterprise can set their own related objectives, measurable on a quarterly or more frequent basis.
This makes it easier to track how different parts of the organisation are faring, as they work towards the overall company goal.
Benefits for medium-size organisations
There are plenty of reasons to introduce OKRs in your organisation.
OKRs take employees beyond their familiar routines, encouraging them to think bigger and reach further. By setting ambitious goals, you motivate workers to take significant strides, even when goals are not fully met.
Check in, little and often
The days of the annual review are past. By assessing your workers and teams on a monthly or quarterly basis, you get a real, close-up picture of how they are coping. This information allows you to review, update and enhance goals as you go.
Dial up company culture
OKRs are a great way to introduce focus, clarity and transparency into your business. With everyone on the same page, and aligned with business goals, every team member is encouraged to take responsibility for their own actions.
The executive team can also be held accountable in terms of strategy and performance.
Build a clearer picture
OKRs streamline company functioning. Their cascading structure gives a bold visual demonstration of how different teams contribute to key strategic objectives, as well as demonstrating progress towards key results.